Mark LaVoie lives in Newton, N.H., in an old farmhouse that he’s slowly restoring. Pre-pandemic, he commuted into Boston three or four days a week for a job at a public relations firm.
He was diligent about keeping track of the days he worked from home because Massachusetts allows commuters like him to deduct those days from their income tax obligations.
Or, at least it used to.
LaVoie got word from his accountant during the shutdown that the Bay State would not allow him to deduct all the additional time he was now working from home.
“He sent me the guidance from Massachusetts that was issued in March that I was really disappointed to see, and kind of angry,” says LaVoie.
To him and the tens of thousands of former commuters now working from home, this is an issue of fairness. Lavoie estimates the change in tax policy costs him around $300 every paycheck, while getting nothing in return.
“Beforehand, when I was commuting into the city, taking advantage of public transportation, benefitting from what I saw as sort of an investment in just being able to get to and from work,” says LaVoie. “But now that that dynamic doesn’t really exist any more, that I’m solely in New Hampshire, and haven’t set foot in Massachusetts for business since before COVID, I don’t see that benefit at all.
“Instead, I see it more as taxation without representation,” he adds.
The rule change by Massachusetts is set to expire on Oct. 21, but the state is considering extending it through the end of the calendar year. Like every state, it’s scrambling to fill a sudden budget hole.
On Thursday, the Massachusetts Department of Revenue held a virtual public hearing on the proposed extension. More than 140 New Hampshire commuters submitted public testimony in opposition, and a bi-partisan line up of lawmakers testified.
“This rule in my view is anti-worker and anti-public health,” said state Senator Dan Feltes, a Democrat from Concord who is also running for governor.
“These are unprecedented times, and I want to see my constituents be able to keep their money while they’re working in the Live Free or Die State,” said Kim Rice, a Republican state representative from the border town of Hudson.
Earlier this month, Gov. Chris Sununu ordered the New Hampshire Attorney General to review the constitutionality of the move by Massachusetts. It isn’t clear yet if the issue will wind up in court.
It is making its way to Congress, however.
Congressman Chris Pappas is co-sponsoring a bill that would prevent states from levying an income tax on non-resident telecommuters. Pappas sees it as a public health issue as much as it is a question of state sovereignty.
“We don’t want any disincentive for folks to not stay home, and I think the decision by Massachusetts to go after New Hampshire remote workers is something that is not helpful in that overall effort to keep people safe,” says Pappas.
It isn’t clear when Massachusetts officials will issue a decision on whether to extend the tax rule.