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Some friends of mine who live in NYC are actually considering "renting" their addresses for remote employees who get shafted like this.

From my perspective, it's the same as registering your business address in Delaware to take advantage of their low tax rates.



No one registers a business address in Delaware to take advantage of their low taxes. Companies, like people, must pay state and local taxes based on their physical location.


Right. Delaware is attractive for their business-friendly legal environment.


Watch as companies start lobbying to make this illegal.


For tax purposes, that is already illegal. I.e. most (all?) states determine your residency based on where you actually sleep a majority of the year. My guess is that FB will base it on where you claim residency for tax purposes, so if you lie about it you're committing tax fraud.


What stops one from paying the difference at the tax returns filing?


.


No.

So many people seem to think they've come up with clever workarounds to tax laws. It's almost never true.


In a round about way, is this not already illegal? If I live in Ohio but I represent myself to my employer that I live in NYC, am I not committing state income tax fraud against Ohio? NYC would probably love this since people who don't live in NYC and don't use its services pay NYC taxes, but Ohio would hate this because the person lives in Ohio and pays no state taxes.

EDITED: Also, you could not get a driver's license in Ohio since you have to live there to get one. Forget about registering cars, owning property and paying for anything with a credit card in your own name.


You have a lot of arbitrage to play with just inside California.


Oh yeah just go online and search for houses under $250k. A bunch are out in the boondocks with bad internet, but not all of them.


It probably is illegal due to issues with taxes. If I put my address in Seattle,wa but i am residing in Astoria, Oregon. I owe Oregon income tax


Just route all your work through your home in Seattle!


It's already illegal to lie in a contract. It's called fraud.


One hopes lawmakers would let it continue for irony's sake


NYC in particular might not be a good location for this, since if your W2 lists NYC you are subject to three income taxes (fed, state, city).

Seattle would probably be a better choice, as a high-wage, relative low-tax city.


It seems pretty unwise to defraud your employer like that.


Why is it defrauding though? They want to lower your salary despite you having proven that you're worth that salary.


Proven that you are worth that salary in a given city. As tech companies realize they are no longer tied to SV they will also no longer have to pay the same high salaries to attract the large but overall still limited talent pool in this geographic area.

For every SF developer there is probably a just as good developer in Boise or Belarus willing to do the job for much less. Why should a SF developer who moves there make more?

People are worth a lot, but they become worth less monetarily as the talent pool grows in size.


Because by doing this you have misrepresented the truth in order to extract more money from your employer than you agreed (presumably, in your employment contract).

(As I commented elsewhere, whether you think paying by local cost of living is the right policy is valid to debate but isn't the point here.)


Come on, this is just ridiculous. "Why can't I lie to my employer in a contractual agreement if they did something I don't like?"

I mean, the vast, vast majority of FB employees can easily get jobs with other companies. If you don't like it, leave.


Did you prove you’re worth the salary or do they just have massively inflated salaries for everyone in a certain west coast US city because A bunch of huge technology companies failed to realise computers and the internet exist outside of said city and remote working is a very workable thing.

I’m not saying they should drop your salary if you move, but I also don’t think a lot of people hired at typical SV rates are actually worth that much, so much as they can’t afford to live there if paid less.


despite you having proven that you're worth that salary

An employer never pays you what you're worth, they pay you the lowest possible salary they can get away with.


Because it's lying. That's what fraud is. "But I had a good reason for lying!" is not a defense.


It's weird that you have to explain that lying is wrong to full grown adults


Yuuuup.


It'll be tricky for employers to enforce too - surely you'll have people who "live" in SF but travel 60-70% of the time to Colorado.

Flying back to the bay for 2 days a week is probably a reasonable CoL arbitrage if you only need housing for 2 days.


> From my perspective, it's the same as registering your business address in Delaware to take advantage of their low tax rates.

State tax authorities do not share this perspective.


Ignoring any potential ethical questions, I wonder how that works for state tax purposes?


You pay state taxes based on where you actually lived, not on where you say you lived, not on where you identify as having lived, not on what you perceive to be your main residence, and not on where you own a PO box. You pay state taxes based on where you actually lived, as in where your physical body was in space and time. And your employer obviously has this information for tax withholding.


I’m pretty sure you pay taxes to the state you physically are in while doing the work.

So if you leave NY temporarily and work remotely from FL you will no longer have income tax while you are in FL.


But then you have to prove to NY that you were in FL. States like NY and CA will claw every dollar they can from you and if they see you're getting paid to an in-state address, good luck proving you weren't actually in-state. You likely won't be able to get back the money your company automatically deducted from your paycheck.


Not tax advice, so consult your own professional preparer:

NY state has first dollar claim if your employer says your job is in NY regardless of your physical address. If, for example, you live in NJ but commute into NY, you’re paying NY state tax with no opt-out. NJ credits residents for NY taxes but then gets their money via property taxes.

NYC is even crazier, with part time residents going so far as to take daily pictures of themselves with local papers to prove that they reside outside the city more than half the year to avoid NYC income tax.


They end up having to pay NY state taxes since that's what your employer is reporting.




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