Traveling and State Taxes Question

[samiwas]

I know a few on here are tax law type people, so maybe you can help...I don't have a CPA or anything to ask.

I've looked this up all over the place and can't get a straightforward answer. I know that when I travel to another state, and work within that state, which I do often, I owe non-resident state taxes to that state. No problem.

My question refers to just traveling to meetings. Before I ever go to do the work at a venue, I have to travel to that venue to do a site survey. Basically all I do is a attend a few meetings, walk around taking pictures and measurements, and inspecting the space. I don't actually perform any work. However, my employer counts that day as working in that state, meaning that I get taxed to that state rather than my home state. In a normal year, it doesn't bother me, because I end up working in the state, so filing the extra return is going to happen anyway.

But, this year, I am doing the site survey in a separate tax year than when I will be doing the work. That means I would have to file a separate state, and possibly city, tax return...for a meeting.

I'm just wondering if that's even necessary. Is it required for my employer to allocate that day to that state even if I'm not actually performing work there? This has gone on for a couple of years, and I'm hoping I can squash it.

 

[Macky-Mac]

My question refers to just traveling to meetings. Before I ever go to do the work at a venue, I have to travel to that venue to do a site survey. Basically all I do is a attend a few meetings, walk around taking pictures and measurements, and inspecting the space. I don't actually perform any work.

oh yes you did......you went to meetings, did a site survey, took photos, measurements, etc.......and you got paid for it........so you definitely worked.

Each state sets its own rules about how much you have to earn before you're required to file a tax return. It may be that you don't have to file if you only earned a small amount, but you'll have to check the requirements for whatever state it was.

Of course if your employer has withheld taxes for that amount, then you'll have to file a return to get it refunded, assuming you want to make the effort to do that.

 

[zhenya]

Wouldn't this only apply if your employer were based in that state and/or you took up residence for some period of time or something to that effect? If your employer still pays you in state A, then why would you owe taxes also to state B, C or D? I've been working across state lines and internationally for years, and I've never heard of anything like this, and I'm doubtful my employer would be negligent of the tax law. Do you think everyone who crosses state lines every year to attend a conference or convention files multiple state income tax returns?

 

[Tomorrow]

This sounds fishy to me (on your employer's part).

I've worked for Texas-based companies for years, while living in Texas, and done plenty of work in other states without ever having taxes withheld or paying taxes in those states, because my employment base is here in Texas.

I even worked (from my home in Texas) for a company in Massachusetts, visiting jobsites in California. I wasn't responsible for taxes to Massachusetts or California, and Texas has no income tax. The reason being even though the company was headquartered in MA, my base of operations was here.

 

[eternlgladiator]

I agree with the other posters. I don't think your liable for any out of state taxes for brief periods of work conducted in other states as long as its still for your home company in your primary state. I worked for a week in China last week and I'm not paying them any taxes for working there. It sounds like somebody is confused at your company.

 

[samiwas]

oh yes you did......you went to meetings, did a site survey, took photos, measurements, etc.......and you got paid for it........so you definitely worked.

I guess if you wanted to be quite literal, then yes...I "worked". But is it "services performed in/for that state", as most paperwork declares? I have yet to find anything that specifically refers to just attending meetings and looking around a room.

I tend to see it from the position of the other posters.

When I go on site to actually perform the install work (usually for a week to four weeks), I do have applicable local and state taxes taken out, as expected, and file non-resident tax returns on those (which for some states are absolutely ridiculous). That's normal. But I can't imagine that business people who travel constantly to other states to go to meetings and site inspections are expected to pay each and every state. That just doesn't seem to make sense. I don't even stay there overnight, I'm in at 10am, and out by 6pm, back at home for dinner.

The part that makes this even stranger, is that I don't actually work for a company in my home state. I am a freelancer (permlancer, really), who works from my home in GA, for a company office in Denver, controlled by a main office in CA, with supervisors in Canada! And we're actually a really small company. Not that any of that really matters, as GA is my residence.

I guess my best bet is to actually call a tax person. The person who files my pay documentation isn't even from the US, so she has no idea what it's all about.

 

[eternlgladiator]

I guess if you wanted to be quite literal, then yes...I "worked". But is it "services performed in/for that state", as most paperwork declares? I have yet to find anything that specifically refers to just attending meetings and looking around a room.

I tend to see it from the position of the other posters.

When I go on site to actually perform the install work (usually for a week to four weeks), I do have applicable local and state taxes taken out, as expected, and file non-resident tax returns on those (which for some states are absolutely ridiculous). That's normal. But I can't imagine that business people who travel constantly to other states to go to meetings and site inspections are expected to pay each and every state. That just doesn't seem to make sense. I don't even stay there overnight, I'm in at 10am, and out by 6pm, back at home for dinner.

The part that makes this even stranger, is that I don't actually work for a company in my home state. I am a freelancer (permlancer, really), who works from my home in GA, for a company office in Denver, controlled by a main office in CA, with supervisors in Canada! And we're actually a really small company. Not that any of that really matters, as GA is my residence.

I guess my best bet is to actually call a tax person. The person who files my pay documentation isn't even from the US, so she has no idea what it's all about.

I'm not going to claim to know that the average joe about tax law but its interesting you brought up that you work from home yet don't have a home office. This could be an interesting twist. I'd just call a local CPA and talk to them. I'm sure they'd be happy to answer some questions and help you figure it out for free.

 

[Tomorrow]

I guess if you wanted to be quite literal, then yes...I "worked". But is it "services performed in/for that state", as most paperwork declares?

It sounds like the difference between "working" in that state and "being employed in" that state.

I've never paid taxes to another state where I've gone for site surveys, meetings, etc. because I wasn't employed there.

I did pay taxes to another state when I WAS employed there (lived in Oklahoma and worked at a factory in Arkansas).

 

[CalBoy]

I've never heard of such a thing.

People go on business trips, consulting meetings, etc, all the time. I can't imagine that some small companies are filling out tax info for 51 jurisdictions (at the minimum).

I mean do traveling salesmen pay different income taxes for their commissions that are in different states? That seems like a ridiculously complicated way to do things.

Were you ever issued a check in one of those other states? I think that would be taxable on a local basis because it is actually income earned in that state. If all of your paychecks were still sent to the same address/made available at the same place/deposited in the same account, I don't think you have to worry about it because traditionally personal income is measured by the receipts taken in that jurisdiction. You shouldn't be taking any receipts in these other states unless your employer is issuing checks in those states to you.

Would your 1 day of work even be significant enough to warrant filing?

 

[samiwas]

Would your 1 day of work even be significant enough to warrant filing?

That would depend on the state. Some have minimums for filing, which can be as little as just a couple of hundred dollars. Last year, I did have to file in Ohio and the city of Cincinnati for one day of survey (I don't want to get caught in this situation again!).

The most ridiculous thing is that some states don't just have a "I made this much, so I owe this much" form for non-residents. You actually have to compute your Federal AGI, divide that by some number of total working days in the year, multiply that by the number of days you worked in their state, adjust for this and that...it's just dumb. The worst is when two states need the info from each others' return, so they are based on each other!

 

[Gregg2]

Yeah, you pay taxes to the state where you're employer is located, period. If your employer maintains offices in several states, you pay to the state that the office you work out of on a "permanent" basis is located. (No, I'm not a CPA.)

I currently work for such a company. I can ask the out of state guys who often come to my location if they file in two states. I'll be shocked if they say yes. Often they are here for 2 or 3 days.