Perspectives

The new normal of remote work and the impact on state filing obligations

Inside Deloitte

In this installment of Inside Deloitte, the authors examine the state and local tax issues related to remote employment and technology solutions to assist companies with managing tax compliance concerns.

Introduction

Over the last two years, the landscape of remote work has evolved at an unprecedented pace. The COVID-19 pandemic has accelerated this evolution, triggering a desire by employees and employers alike to better understand the long-term prospects for working remotely. The potential impacts for both companies and the workforce are numerous. Companies may be able to decrease costs associated with real estate, while employees may experience greater productivity and reduced costs such as those associated with commuting.1 Aside from these benefits, companies competing for scarce talent should not ignore the desire of many employees to be able to work remotely.2 Organizations either transitioning to or already using some remote workforce should consider, among other items, the state and local tax issues related to their remote employees and technology solutions to assist with managing tax compliance concerns.

The new normal of remote work and the impact on state filing obligations

If you have questions regarding this edition of Inside Deloitte, please contact:

Lorraine E. Cohen, partner, Deloitte Tax LLP
Simon Davies, managing director, Deloitte Tax LLP
John Paek, principal, Deloitte Tax LLP
Amber Rutherford, senior manager, Deloitte Tax LLP
Noel Ryan, senior manager, Deloitte Tax LLP
Grace Taylor, senior manager, Deloitte Tax LLP

Endnotes

1 See “How Remote Options Will Help Firms Recruit After Pandemic,” Law 360, Apr. 27, 2021 (“Many firms have reported that despite concerns productivity and revenue would decline as a result of the changes, they managed to be profitable and to get their tasks done…. Research has demonstrated that telecommuting has a very real potential to make employees’ lives easier, free from the stress of daily commutes, and keep them productive when they cannot come to the office…. Employers that have shifted to telecommuting programs in recent years have also reported savings from increased productivity, increased retention of workers, and reduced absenteeism from employees, according to the report.”).

2 See Association of Legal Administrators, “Remote Working as an
Effective Recruitment and Retention Tool for Law Firms Post-COVID-19,” Apr. 2021 (stating younger employees increasingly say they value a work-life balance above all other considerations and are attracted to employers that offer the flexibility to work remotely).

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