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Yet another tax headache – U.S. interstate business travel


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duty of care

Duty of Care – Keeping Employees Safe in High Risk Locations

19 April 2018 / By Nick Royle / Business  / Business Travel Tracking  / export  / Global Mobility Management  / Global Talent Mobility  / HR  / International Assignment  / Relocation  / 

Duty of Care – Keeping their global business travelers and assignees safe has become much harder for companies than it…

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Should Companies Include Restrictions in Assignee Contracts?

9 April 2018 / By Nick Royle / Business  / Global Mobility Management  / Global Talent Mobility  / HR  / 

Anytime a company sends an employee on assignment, there are multiple issues to consider, although some tend to be overlooked.…

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Baker's Dozen

MSI wins 1st place for Quality of Service in HRO Today Magazine’s 2018 Baker’s Dozen: Relocation Ranking

March 25th 2018 – MSI Global Talent Solutions, a human capital advisory firm that enables companies to improve, grow, and…

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Move for Hunger

MSI Global Talent Solutions and Move for Hunger Announce Collaborative Effort to Help Feed Families in Need

Hampton, NH February 12th 2018 – MSI Global Talent Solutions, a professional services organization dedicated to helping companies create human…

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Not yet GDPR compliant? Here’s how to minimize your organization’s risk

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Keeping Employees Safe in High Risk Locations

Keeping their global business travelers and assignees safe when visiting high-risk travel locations has become much harder for companies than…

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Summary: What is the GDPR?  Who needs to comply? In this session we reviewed the highlights of the new General…

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Global Talent Strategy: Modernization to Facilitate Success

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Yet another tax headache – U.S. interstate business travel

30 March 2018 / By Nick Royle / Business  / Business Travel Tracking  / HR  / Tax  / 

Interstate Tax – Not that long ago, interstate business travel in the United States wasn’t yet the tax headache it’s become today. In fact, many who traveled beyond their home states for business didn’t realize they could be taxed by other states on the income they earned while there. Many employers, who would have been required to withhold and report on this income, were also largely unaware.

Now though, awareness has increased exponentially, due to a greater likelihood of financial consequences for noncompliance with interstate tax rules. As the result of new technologies that have made it faster and easier to identify tax violations, states with income taxes are now generating substantial additional revenue by penalizing those not in compliance.

In some instances, penalties can be significant. One company, for example, recently received a $10 million assessment for withholding and reporting violations in New York.

As might be imagined, this has created numerous challenges for companies with many U.S. interstate business travelers. Because there’s considerable variation from state to state around withholding thresholds and requirements (or a lack of them), staying compliant can be an enormous and highly complex task.

To manage this, many have found it helpful to bring in compliance specialists, who can help determine the size of the issue, identify risks and objectives, define mitigation processes, and promote collaboration among all applicable departments (e.g., mobility, HR, payroll, finance, and tax). Third party consultants can also facilitate senior leadership buy in, which will further promote compliance efforts and clarify the benefits to the company.

In addition, companies wishing to successfully mitigate their risk are implementing rigorous data management processes. Components include maintaining accurate employee location data and amounts and types of compensation. In addition to base salary, the latter includes long-term bonuses and awards and equity awards/stock options.

In order to streamline this task, many are using travel tracking technology. This not only saves time and money, but mitigates risk even further: should there be an audit, it attests to the fact that a company is making a good faith effort to be compliant.

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