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Comment by devoutsalsa | Hacker News Reader

Because it’s untenable.

In what way are laws for employing someone in a state indefensible?

You don’t get to set up shop in a state with low taxes and minimum wage then pay your employees in another state using whichever state’s laws you prefer.

Except in this case the 'shop' is in Illinois. A California resident commutes his bits to Illinois and somehow in all it's wisdom California wants to exercise itself outside of its jurisdiction into the shop in Illinois.

No, in this case the shop is in California, where the California resident is performing his work, which is then transmitted to the office in Illinois.

CA gets to regulate the company with respect to its CA operations, i.e., that employee in CA. The CA regulations don't apply to any of the company's non-CA employees.

This has always been the rule with respect to employees working in other jurisdictions.

I recall that Kansas and Missouri had a tax arrangement as lots of people lived on one side and worked on the other (there are two Kansas City’s). This meant that only the excess was paid to whichever had the higher tax rates although both forms were filed.

I find it comical to see you assert, in 3 words, that states shouldn't have the ability to exercise their regulatory powers to protect their citizens on the singular basis that the entity subject to regulations is outside their border.

The real "untenable" thing is proposing that corporations can neuter state laws entirely by the simple act of incorporating in not that state. I'm sure that wouldn't lead to a race to the bottom or anything, the US definitely doesn't already have issues with corporate-owned states or anything

I see you didn't bother to read the article.

I have no problem with California exercising its sovereignty over its own citizens. The employee in question should have been protected by California laws, being a resident of California.

What the article's author relates is California asserting sovereignty over an entity that has no nexus or revenue derived from California. This is the overreach and should be outright banned at the Federal level, otherwise there's nothing stopping a state from passing a law that requires companies to pay $30,000 tax for the next five years for every employee that vacations in that state. Do we really want to stomp small businesses with having to know the business tax codes for all fifty states in this age of remote work? I think not.

It's about as stupid as the five states in the US that decide they can impose income tax on non-citizens of those states if the employer resides in that state.

They have nexus in California the moment they engage in business with an entity in California. When they hired an employee in California the employee was the entity and hiring them to do work while in California was engaging in business in California.

The idea that the employees and the work they do aren’t part of the business is some new idea that I hope doesn’t gain traction.

Say the federal government did allow for this line of reasoning and prevented states from treating remote employees as having nexus in the state they live and work in. How does that not end up with every company incorporating in one state and hiring all their employees in other states so they can avoid all state level regulation?

> an entity that has no nexus or revenue derived from California

The revenue any business derives is the sum of its employee efforts. A physical presence vis a vis an employee is surely a nexus.

> otherwise there's nothing stopping a state from passing a law that requires companies to pay $30,000 tax for the next five years for every employee that vacations in that state

You know, I'm not surprised you would make such a hilarious non-sequitur given your position makes no sense in the first place, but to argue "an employee going on vacation in a state" is even in the same universe as "employing a resident of a state" is actually pathetic.

> Do we really want to stomp small businesses with having to know the business tax codes for all fifty states in this age of remote work? I think not.

Do we really want to simply take away all regulations so corporations can take advantage of interconnectivity and globalization to be even more exploitative of workers and increase wealth inequality further? I think not.

> It's about as stupid as the five states in the US that decide they can impose income tax on non-citizens of those states if the employer resides in that state.

What is a "non-citizen of a state"? I have never heard of citizenship in a state, that is a country-level concept. If you perhaps mean non-residents, I would also agree this seems like overreach, except funny enough the US government does the same thing to all its citizens unless they pay a big fee to renounce their citizenship, so it is a distinctly American brand of overreach!

What if those citizens move to a different state or country? I think we can agree the new state's laws shoud apply exclusively. Why or how is that different from commuting into work across borders? And why is that different from working remotely?

Maybe there is a reasonable explanation for treating these differently, I just don't see it right now.

> What if those citizens move to a different state or country? I think we can agree the new state's laws shoud apply exclusively.

Yes, because if the person moves to a new state, their entity has established a nexus in one state, and therefore that state exclusively governs them.

The business entity who has employees in other states is, by the exact same logic, subjected to the laws of each state they have nexus in, and an employee that is a resident of a state is transparently a nexus in that state, as you agreed upon in your "moving" example.

Hopefully it's clear!

What is untenable exactly? That a state is provided the ability to enforce their laws?

National governments are allowed to enforce laws outside their own borders, such as intellectual property and copyright. While challenging to enforce, it is possible.

"National governments are allowed to enforce laws outside their own borders, such as intellectual property and copyright."

I believe those are done through treaties.

I'm not sure how the federal government weighs in on this since they have the authority on interstate commerce, which this falls under.

The states also signed laws, akin to treaties at the time, agreeing to allow other states to enforce certain domains of law within their jurisdiction. This is part of how the federation of the United States of America came into being.

Are these general or specific? I know some laws have been passed like a treaty between states, especially ones that border each other. The ones I know are very specific.

Not really, or not always. An example: The IRS taxes every US citizen on all income, regardless of where they live. They didn't go setup tax treaties with every country. If I'm a US citizen living in North Korea, I still have to file US taxes every year, despite the 2 countries essentially hating on each other for decades.

Sure, but that's devoid of the international enforcement mentioned. If your assets are in North Korea or a Swiss bank, then they can't force you to pay it. If your assets are in US accounts, then they could easily do so. I imagine there are other countries that we do have treaties with (or even if the bank has branches/business in the US so that the government doesn't make their life difficult) that would cooperate in freezing your international assets held in those countries too.

I agree, enforcement matters. My opinion: In the last 50+ years, it's been a very bad bet to be against the USA. They generally get whatever they want.

If that's right or not, is certainly debatable.

The way things are going these days, I would never move to a place that doesn’t have a current agreement with the United States and assume it’d stay that way.

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