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Gar, quick question for you. I have approximately 2,000 employees working on various engagements throughout the country. These employees perform engagements both in their states of residency, as well as in other states. Ignoring reciprocity arrangements, what are my withholding requirements for pay earned when performing services in a non-resident state. I know every state is different, but I am trying to determine if there is a common "bright line" test that I can apply across the board.
Last week I attended a seminar in DC, and the person who was running it was an old Andersen person who said that it is a "control" issue. I.e., if the services are being controlled from within the non-resident state, then that state can tax the payroll. She claimed that is the position Andersen took after they were sued by the Attorney General in Colorado.
However, after digging into the various state statutes, I don't think it is that simple.
Thoughts?
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