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While the story itself is amusing, I actually focused on the thread where they've discussed tax implications that the company may bourne due to working in anoth

While the story itself is amusing, I actually focused on the thread where they've discussed tax implications that the company may bourne due to working in another city/state. I'm not familiar with US tax law, is this really true that income taxes can vary even between cities? I understand that it varies between states, but surely it doesn't extend that there are differences between two cities in the same state?

daveslash 4y ago
American/Californian checking in here. IANAL and not an accountant. That said: I find it a highly dubious claim that there are differences in individual income taxes between cities. I've lived across the US and I've never even heard of that. Different sales tax, sure, but not income tax. Employer taxes on the other hand.... who knows?! There very well might be local ordinances that cities levy on employers based of the number of employees or some such thing. Maybe, I have no idea - but the point is: income taxes no, employer taxes, maybe. Would be interested if anyone else knows more? Edit: City taxes are the reason that "The Strip" in Las Vegas is technically not in Las Vegas. What we think of as Vegas is really in "unincorporated Clark county". I'm sure employees all pay the same State and Federal income tax, but the business don't pay city taxes. I don't know how much that's based off their business location vs. their employees location.
- hollywood_court 4y ago
  There are certainly differences. Most cities have no income tax at all. Some do. I personally had never lived in a city or county with an income tax until I moved to my present location ~12 years ago.
- ElevenLathe 4y ago
  There are City income taxes in lots places around the US: https://www.stlouis-mo.gov/government/departments/comptroller/initiatives/us-cities-that-levy-earnings-taxes.cfm https://www.stlouis-mo.gov/government/departments/comptrolle... It's really not that uncommon. There are also special districts for things like sewer or water service which can also levy income tax.
  - ajhurliman 4y ago
    Special assessments show up on your property tax bill, not income.
    - ElevenLathe 4y ago
      Not everywhere. For example, most (maybe all? not sure.) school districts in Ohio can levy different income taxes. Here is a 5 page PDF listing the different rates: https://tax.ohio.gov/static/tax_analysis/tax_data_series/school_district_data/sdit_list.pdf https://tax.ohio.gov/static/tax_analysis/tax_data_series/sch...
      - ajhurliman 4y ago
        Interesting, I didn't know that. Best way to learn is to say something false on the internet I guess!
- ahazred8ta 4y ago
  There are about 170 cities in the US where individual residents pay federal income tax, AND state income tax, AND ALSO local municipal income tax. Usually they use the 'taxable income' line item from your federal 1040, and charge you a percentage of that. Baltimore and NYC charge about 3% of your 1040. https://taxfoundation.org/city-income-taxes/ https://taxfoundation.org/city-income-taxes/ You may be referring to city business profits tax, sales, or property tax, but that's unrelated.
dpifke 4y ago
Yes. California requires non-residents to file & pay income tax for any days worked in the state, regardless of where you live or typically work: https://law.justia.com/cases/california/court-of-appeal/3d/208/972.html https://law.justia.com/cases/california/court-of-appeal/3d/2... Sometimes the tax is fine-grained enough to be certain blocks, not just within state or city limits. For example, Portland, Oregon has an income tax (with mandatory employer withholding) for employees working in the downtown district, to fund public transit: https://www.portland.gov/revenue/withholding https://www.portland.gov/revenue/withholding
- zinekeller 4y ago
  > Sometimes the tax is fine-grained enough to be certain blocks, not just within state or city limits. For example, Portland, Oregon has an income tax (with mandatory employer withholding) for employees working in the downtown district, to fund public transit And now it's much more clearer why there is a tax software cartel in the US. If an accountant can barely remember that, an ordinary people would definitely not get this.
JauntTrooper 4y ago
Yes, some US cities have additional income taxes beyond what you pay to the state. New York City, for example, has a city income tax, as does Yonkers, NY. At one of my prior firms, pre-pandemic, they fired a remote worker because she moved from one state to another. We thought this was insane because she was one of our best employees and the workflow wouldn't change since she was already remote. The company's logic was that they didn't have any employees in her new state, and they didn't want to take on the additional tax, legal and administrative burden and risks of expanding into that new state.

daveslash 4y ago

American/Californian checking in here. IANAL and not an accountant. That said: I find it a highly dubious claim that there are differences in individual income taxes between cities. I've lived across the US and I've never even heard of that. Different sales tax, sure, but not income tax. Employer taxes on the other hand.... who knows?! There very well might be local ordinances that cities levy on employers based of the number of employees or some such thing. Maybe, I have no idea - but the point is: income taxes no, employer taxes, maybe. Would be interested if anyone else knows more? Edit: City taxes are the reason that "The Strip" in Las Vegas is technically not in Las Vegas. What we think of as Vegas is really in "unincorporated Clark county". I'm sure employees all pay the same State and Federal income tax, but the business don't pay city taxes. I don't know how much that's based off their business location vs. their employees location.

hollywood_court 4y ago
There are certainly differences. Most cities have no income tax at all. Some do. I personally had never lived in a city or county with an income tax until I moved to my present location ~12 years ago.
ElevenLathe 4y ago
There are City income taxes in lots places around the US: https://www.stlouis-mo.gov/government/departments/comptroller/initiatives/us-cities-that-levy-earnings-taxes.cfm https://www.stlouis-mo.gov/government/departments/comptrolle... It's really not that uncommon. There are also special districts for things like sewer or water service which can also levy income tax.
- ajhurliman 4y ago
  Special assessments show up on your property tax bill, not income.
  - ElevenLathe 4y ago
    Not everywhere. For example, most (maybe all? not sure.) school districts in Ohio can levy different income taxes. Here is a 5 page PDF listing the different rates: https://tax.ohio.gov/static/tax_analysis/tax_data_series/school_district_data/sdit_list.pdf https://tax.ohio.gov/static/tax_analysis/tax_data_series/sch...
    - ajhurliman 4y ago
      Interesting, I didn't know that. Best way to learn is to say something false on the internet I guess!
ahazred8ta 4y ago
There are about 170 cities in the US where individual residents pay federal income tax, AND state income tax, AND ALSO local municipal income tax. Usually they use the 'taxable income' line item from your federal 1040, and charge you a percentage of that. Baltimore and NYC charge about 3% of your 1040. https://taxfoundation.org/city-income-taxes/ https://taxfoundation.org/city-income-taxes/ You may be referring to city business profits tax, sales, or property tax, but that's unrelated.

dpifke 4y ago

Yes. California requires non-residents to file & pay income tax for any days worked in the state, regardless of where you live or typically work: https://law.justia.com/cases/california/court-of-appeal/3d/208/972.html https://law.justia.com/cases/california/court-of-appeal/3d/2... Sometimes the tax is fine-grained enough to be certain blocks, not just within state or city limits. For example, Portland, Oregon has an income tax (with mandatory employer withholding) for employees working in the downtown district, to fund public transit: https://www.portland.gov/revenue/withholding https://www.portland.gov/revenue/withholding

zinekeller 4y ago
> Sometimes the tax is fine-grained enough to be certain blocks, not just within state or city limits. For example, Portland, Oregon has an income tax (with mandatory employer withholding) for employees working in the downtown district, to fund public transit And now it's much more clearer why there is a tax software cartel in the US. If an accountant can barely remember that, an ordinary people would definitely not get this.

JauntTrooper 4y ago

Yes, some US cities have additional income taxes beyond what you pay to the state. New York City, for example, has a city income tax, as does Yonkers, NY. At one of my prior firms, pre-pandemic, they fired a remote worker because she moved from one state to another. We thought this was insane because she was one of our best employees and the workflow wouldn't change since she was already remote. The company's logic was that they didn't have any employees in her new state, and they didn't want to take on the additional tax, legal and administrative burden and risks of expanding into that new state.