Supreme Court declines to hear New Hampshire’s lawsuit against Massachusetts' remote work 'tax grab'
Two of the justices said they would have heard the suit
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The Supreme Court on Monday declined to hear a case brought by the state of New Hampshire against Massachusetts over how it treated remote workers’ income for tax purposes during the pandemic.
It was not clear why the justices denied the case, but Justices Clarence Thomas and Samuel Alito would have granted the motions, according to the filing.
As previously reported by FOX Business, New Hampshire launched a legal challenge against Massachusetts in October over what it called an "an unconstitutional tax grab."
At issue is an intra-pandemic measure imposed by Massachusetts that essentially maintains the income tax status quo – meaning if a New Hampshire resident would otherwise be in a Massachusetts office if not for the virus outbreak, that individual would have taxes withheld as though he or she were earning income in the state.
The case could have had widespread implications for other states that have similar, permanent, tax policies.
NO-TAX NEW HAMPSHIRE LAUNCHES LEGAL BATTLE AGAINST MASSACHUSETTS' REMOTE WORK 'TAX GRAB'
Unlike Massachusetts, New Hampshire does not levy an income tax on wages, which officials say helps boost its economy by attracting businesses and residents, creating jobs and generating higher per capita income.
Those economic benefits, the lawsuit argued, were jeopardized by Massachusetts' decision to impose an income tax "within New Hampshire."
Massachusetts, which taxes earned income at 5.05%, issued the guidance in April, but the policy was retroactive to March. The policy was scheduled to expire 90 days after Massachusetts lifted its state of emergency, which happened on June 15.
More than 100,000 New Hampshire residents were said to be affected by the policy.
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A spokesperson for the Massachusetts Executive Office for Administration and Finance did not return FOX Business’ request for comment.
"By siding with the Biden administration and allowing inappropriate taxation of NH citizens, the Supreme Court is setting a costly precedent," New Hampshire Gov. Chris Sununu said in a statement on Monday. "This decision will have lasting ramifications for thousands of Granite State residents."
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Some workers have been faced with a tax headache depending on how their work situation changed during the pandemic.
There is a complex patchwork of state laws governing income taxation, some of which were temporarily changed during the national emergency.