You don’t have to be rich and famous to pay taxes across borders. All are equal in the eyes of the IRS. This has always been the case. However, it is only of late that States have made a concerted effort to include John and Jane Doe; not just the rich and famous. This trend has become noticeable to tax lawyers and accountants. They say it’s because States need revenue. It has been particularly evident in Connecticut and New York. However, a commissioner for the Connecticut Department of Revenue, Richard D. Nicholson says States are not being driven by need, but by improved paperless technology.
A number of professionals noted even with new technology the process of finding ordinary citizens who worked across borders is going to take a great deal of time. It is also going to be confusing for employers and employees as this tax regulation differs from State to State. Most citizens don’t know the regulation exists. Larger employees quietly acknowledged they never took steps to ensure employees paid across border taxes. One way for employers to work with State Revenue Departments is to withhold employees’ additional taxes on payday. This means the corporate payroll ensures across border taxes get paid and State Auditors won’t have to seek out those individuals.
While most employers and employees are still ignorant of cross border tax regulations the most insistent States are going to gain the most. The men and women in the street should know that State Tax Departments are using recently digitalized computer systems containing information such as tenders for government building projects, traffic fines and commercial license plates. This information is used to find individuals.
All it takes is a day across a border for many States to demand a filing. For many such as consultants or salesmen it is going to be a major admin process. The bottom line is if you spend time across any border regarding work or business you pay tax to that State.