Massachusetts Fiscal Alliance made the following statement today regarding the Massachusetts Department of Revenue (DOR) Rulings and Regulations Bureau’s proposed regulation that would change the way in which out-of-state workers owe income taxes when their employer is based in Massachusetts.

Social distancing policies associated with COVID-19 have led to a record number of people working from home, many of whom live in neighboring New England states. The DOR proposal will require them to pay Massachusetts income taxes despite no longer working in Massachusetts, simply because their workspace was located in Massachusetts.

“State bureaucrats’ confidences are completely misplaced if they think this proposal will not directly lead to businesses leaving our state,” stated Paul D. Craney, spokesman for the Massachusetts Fiscal Alliance.

“This is an HR nightmare for businesses and an unfair burden on employees. Workers will complain to their companies and companies will need to decide if they want to stay. The meteoric rise of telecommuting over the last several months means there are fewer factors than ever before forcing employers to remain in cities and states that are unfriendly to businesses,” stated Craney. “DOR bureaucrats may have forgotten that in January the very harmful Paid Family Leave Act will go into effect, forcing many small businesses to close their doors for good.”

“DOR bureaucrats need to understand that there are a lot of demands on businesses right now. They best thing they can do is not make it harder for workers and employers,” concluded Craney.