“Remote work creates a spectrum of state and local tax issues”

Article by Jennifer Karpchuk on “Remote work creates a spectrum of state and local tax issues”

In an article published on December 1, 2021, in The Tax Adviser, Philadelphia-based Shareholder Jennifer Karpchuk and Managing Director Drew VandenBrul’s, State and Local Tax at Grant Thornton in Philadelphia discuss items tax professionals should consider when evaluating the state and local tax ramifications of a remote work environment.

“While employees focus on employment taxes, employers need to consider not only employment taxes but also a broad array of other state and local tax issues, including nexus, apportionment, compliance, and financial statement reporting,” explain Karpchuk and VandenBrul. “All of these present a rapidly changing range of impacts on effective rates and financial statement reporting, registrations, tax compliance, data gathering, and documentation.”

Karpchuk and VandenBrul further outline that many jurisdictions are moving from temporary relief and guidance, driven by the pandemic, to enacting new legislative, regulatory, and administrative guidance to adapt to the expansion of more permanent remote-work arrangements. It is important to have a clear picture of the issues of importance to each organization and obtain reliable data on the remote-work arrangements, including documentation of employer policies, plans for future modifications and detailed information on where employees are working and what job functions they are performing.

“The evolution and expansion of remote working provides tax professionals with an opportunity to put these skills to work and drive value for their businesses and clients,” said Karpchuk and VandenBrul.

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