Before the coronavirus pandemic, thousands of Granite Staters commuted to Massachusetts for work every day. Workers who lived in New Hampshire paid the Massachusetts income tax for days worked in-state, but were exempt when working from home in New Hampshire.
For those utilizing public transportation, publicly maintained roads and parking, this was a system that made at least some sense. When crossing the border into Massachusetts was discouraged in order to promote public safety and social distancing, New Hampshire workers did the right thing and continued their work from home. Now, they are being penalized.
Earlier this year the Massachusetts Department of Revenue issued an emergency order which gave Massachusetts the right to collect taxes on income earned outside the state. For New Hampshire residents who traditionally commute to Massachusetts for work, but who have been working from home due to the COVID-19 pandemic, this means that they are now paying an income tax to support services they are no longer utilizing.
New Hampshire is proud to have never put forward a broad-based income tax. Over 80,000 workers accepted employment in Massachusetts under one set of tax rules, understanding that they would not be charged an income tax for days worked outside of the state. They should not be forced to accept such a significant change to their paychecks – a 5.05% tax – particularly now, as families struggle to make ends meet in a time of mass uncertainty from the coronavirus pandemic. This rule change is more than unfair, it is anti-worker and anti-public health.
On Aug. 5, as chairs of the Senate Finance and Ways and Means committees, we sent a letter to the Massachusetts Department of Revenue encouraging the withdrawal of the tax rule change. While Massachusetts is within its right to charge workers living and working in state an income tax, that right should not extend to those living out of state who are no longer commuting in for work. Last week at a public hearing held by the DOR, both Democratic and Republican lawmakers and workers testified in opposition to the change in tax rule.
On the federal level, Congressman Chris Pappas has introduced the Multi-State Worker Tax Fairness Act to protect New Hampshire workers and clarify that taxes are only to be paid to the state where employees physically work. Hopefully, by eliminating multi-state tax rules, both New Hampshire workers, and commuters across the country, will not fall subject to unfair taxation.
New Hampshire workers are acting in everyone’s best interest when it comes to public health and safety by working from home; they should not be penalized for their actions. We have formally requested that the Massachusetts Department of Revenue withdraw this rule change on multiple occasions and will continue to strongly advocate for its withdrawal until New Hampshire workers are no longer forced to contribute their hard-earned income to a tax they have no reason to pay.
(Sen. Lou D’Allesandro of Manchester represents District 20 in the N.H Senate. Sen. Dan Feltes of Concord is Senate majority leader and a candidate for governor.)