Many, many Sun employees are now working from their homes in every corner of the USA world. Many have chosen to live in low-tax states. How is this New York ruling (reported in Slashdot) going to affect this? Will Alaskan telecommuters wind up paying California income taxes if their VPN connections terminate in Menlo Park? Once again, technology meets tax policy, and the result is going to be a mess….

“hal9000(jr) writes ‘The Boston Globe is running this story on an out-of-state programmer working for a New York company who had to pay state taxes. ”New York has the right to tax 100% of a nonresident employee’s income derived from New York sources,’ according to the 4-3 decision by Court of Appeals. The court relied on a fairness rule called the ‘convenience of the employer’ under law that says a worker’s income is taxable if he chooses to live outside the state, as opposed to if he or she was transferred there.’ “