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I'm confused- wouldn't a fully-remote org just move their HQ (on paper) to Delaware and get greater tax breaks? I'm also not seeing why a company would care for

I'm confused- wouldn't a fully-remote org just move their HQ (on paper) to Delaware and get greater tax breaks? I'm also not seeing why a company would care for the health of the commercial real estate sector. The orgs I'm familiar with that went fully remote just sublet their office leases through the end of their term.

gkoberger 3y ago
FWIW, most companies area already incorporated in Delaware, even if their physical location is elsewhere.
jonny_eh 3y ago
There are cities that offer breaks on payroll taxes. I don't know how the payroll taxes are calculated for a remote work force though, so I remain confused as well. Maybe they're calculated by the home address for each employee?
- RankingMember 3y ago
  Payroll taxes are indeed calculated (at least in the US) by worker location, so you need to withhold according to their location.
- cj 3y ago
  Payroll tax is always where an employee is physically working. If they're WFH, then taxes are calculated based on your home address.
  - WirelessGigabit 3y ago
    Not 100% true. https://www.vox.com/recode/22356628/working-remotely-state-taxes-pandemic https://www.vox.com/recode/22356628/working-remotely-state-t... > Taxes are, of course, more complicated than that, especially if your job happens to be based in one of seven convenience of the employer, or “convenience rule,” states — Arkansas, Connecticut, Delaware, Nebraska, New York, Pennsylvania and, since the pandemic, Massachusetts — while you’re living and working elsewhere. 7 / 50, so technically your statement is only 86% true.
cj 3y ago
For Sales Tax and certain state taxes, the company needs to charge sales tax -only- in states where they have a "nexus". Companies typically have "nexus" in whatever states they physically operate in (which could include where WFH employees are living). In other words, the IRS doesn't really care what a company's HQ address is on paper. They care a lot more about where the company is actually operating, even if there's not a physical office.
rhaway84773 3y ago
Don’t waste your time. The conspiracy theorists will never be convinced that businesses do not want to voluntarily give their money away to office landlords, a group they’ve always hated.
briffle 3y ago
> I'm also not seeing why a company would care for the health of the commercial real estate sector. insurance companies typically invest the premiums, to hedge against claims. 2 very popular ways of hedging is owning commercial real-estate that brings in monthly income, or investing in commercial REIT that own many, many large buildings, hotels, etc.
- refurb 3y ago
  Sure, but why would corporations care about insurance companies? A conspiracy about commercial real estate doesn’t make much sense from the perspective of a company like Google. They might care about the “waste” of their own property, but why would they care otherwise? My guess is that leadership truly believes something is lost with WFH.
dehrmann 3y ago
> I'm also not seeing why a company would care for the health of the commercial real estate sector. (aside from commercial real estate companies, obviously) Some companies own a lot of their offices, but I don't know how many. I'm guessing it's mostly random mom-and-pops and corporate giants. I don't buy the argument that it's all about real estate because real estate should have already been marked down on the books, so you're trading potentially higher property value for an increase in opex for utilities, janitorial, etc. Investors prefer the opex win. They didn't buy FooCorp as a commercial real estate play.
- 6510 3y ago
  You want to be the head of a 100 m department and turn it into 110. If you change it into 70 m you don't sound like promotion material.

gkoberger 3y ago

FWIW, most companies area already incorporated in Delaware, even if their physical location is elsewhere.

jonny_eh 3y ago

There are cities that offer breaks on payroll taxes. I don't know how the payroll taxes are calculated for a remote work force though, so I remain confused as well. Maybe they're calculated by the home address for each employee?

RankingMember 3y ago
Payroll taxes are indeed calculated (at least in the US) by worker location, so you need to withhold according to their location.
cj 3y ago
Payroll tax is always where an employee is physically working. If they're WFH, then taxes are calculated based on your home address.
- WirelessGigabit 3y ago
  Not 100% true. https://www.vox.com/recode/22356628/working-remotely-state-taxes-pandemic https://www.vox.com/recode/22356628/working-remotely-state-t... > Taxes are, of course, more complicated than that, especially if your job happens to be based in one of seven convenience of the employer, or “convenience rule,” states — Arkansas, Connecticut, Delaware, Nebraska, New York, Pennsylvania and, since the pandemic, Massachusetts — while you’re living and working elsewhere. 7 / 50, so technically your statement is only 86% true.

cj 3y ago

For Sales Tax and certain state taxes, the company needs to charge sales tax -only- in states where they have a "nexus". Companies typically have "nexus" in whatever states they physically operate in (which could include where WFH employees are living). In other words, the IRS doesn't really care what a company's HQ address is on paper. They care a lot more about where the company is actually operating, even if there's not a physical office.

rhaway84773 3y ago

Don’t waste your time. The conspiracy theorists will never be convinced that businesses do not want to voluntarily give their money away to office landlords, a group they’ve always hated.

briffle 3y ago

> I'm also not seeing why a company would care for the health of the commercial real estate sector. insurance companies typically invest the premiums, to hedge against claims. 2 very popular ways of hedging is owning commercial real-estate that brings in monthly income, or investing in commercial REIT that own many, many large buildings, hotels, etc.

refurb 3y ago
Sure, but why would corporations care about insurance companies? A conspiracy about commercial real estate doesn’t make much sense from the perspective of a company like Google. They might care about the “waste” of their own property, but why would they care otherwise? My guess is that leadership truly believes something is lost with WFH.

dehrmann 3y ago

> I'm also not seeing why a company would care for the health of the commercial real estate sector. (aside from commercial real estate companies, obviously) Some companies own a lot of their offices, but I don't know how many. I'm guessing it's mostly random mom-and-pops and corporate giants. I don't buy the argument that it's all about real estate because real estate should have already been marked down on the books, so you're trading potentially higher property value for an increase in opex for utilities, janitorial, etc. Investors prefer the opex win. They didn't buy FooCorp as a commercial real estate play.

6510 3y ago
You want to be the head of a 100 m department and turn it into 110. If you change it into 70 m you don't sound like promotion material.