13 April 2020 District of Columbia will not assert nexus for employees temporarily working from home in the District due to COVID-19 The District of Columbia Office of Tax and Revenue (OTR) announced that it will not assert nexus for purposes of corporation franchise tax or unincorporated business franchise tax solely because employees are working temporarily from home within the District during the period of the Mayor's COVID-19 emergency declaration. The assertion of nexus will also not be made solely because of property (computers, computer equipment or similar) used by employees to work from home under these circumstances. On March 11, 2020, the District's Mayor declared a public emergency and a public health emergency caused by COVID-19. The Mayor extended that emergency declaration through April 24, 2020. (Mayor's Order 2020-050.) For additional information, please contact OTR's Customer Service Center at e-services.otr@dc.gov or +1 202 759 1946. This OTR's notice does not mention the applicability of District of Columbia unemployment insurance pursuant to workers temporarily working within the District due to COVID-19. However, unemployment insurance typically applies in only one jurisdiction based the federal four-prong test. For more information see our EY Tax Alert 2020-0531. This guidance does not change the requirement that employers with business operations in the District of Columbia are required to withhold District of Columbia income tax on the wages of resident employees, regardless of where those wages were earned. This announcement, does, however, bring much needed relief to District of Columbia employers that otherwise could have been forced to pay corporation franchise tax or unincorporated business franchise tax merely because employees are temporarily working from home within the District due to the COVID- 19 emergency.
Document ID: 2020-0966 | |||||||||||
