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July 2, 2021

US Supreme Court declines to hear New Hampshire case against Massachusetts temporary teleworker income tax rules for COVID-19

On June 28, 2021, the US Supreme Court denied motions to file bills of complaint in a case brought by New Hampshire in October 2020 challenging temporary income tax rules imposed by Massachusetts on the wages of New Hampshire teleworkers during the COVID-19 emergency. Justices Clarence Thomas and Samuel Alito would have granted the motions.

In May 2021, the US Acting Solicitor General submitted an amicus brief for the United States, asserting that the Supreme Court should exercise original jurisdiction only "sparingly" and, because the case brought by New Hampshire could be litigated by New Hampshire residents subject to the Massachusetts income tax, litigating the case at the US Supreme Court level was not warranted.

On June 15, 2021, Massachusetts filed a supplemental brief stating that its temporary regulations resulting in the imposition of its income tax on New Hampshire teleworkers will sunset on September 13, 2021, underscoring its argument that the US Supreme Court should reject the case. (See EY Tax Alert 2021-1273.)

Ernst & Young LLP insights

In consideration of the Massachusetts COVID-19 state of emergency, and effective March 10, 2020, temporary regulations under 830 CMR 62.5A.3 provide that Massachusetts income tax applies to the wages of remote workers performing services outside the state if they performed those services within Massachusetts immediately prior to the COVID-19 emergency.

The result of 830 CMR 62.5A.3 is the imposition of Massachusetts income tax on out-of-state teleworkers who are otherwise not subject to a personal income tax in New Hampshire. Effectively, the Massachusetts temporary regulations create a "convenience of the employer rule" like that imposed by New York (and several other states) on out-of-state teleworkers.

This is the second time the US Supreme Court has declined to hear a constitutional challenge to the convenience-of-the-employer rule. After losing his challenge of New York's convenience-of-the-employer rule in the New York Court of Appeals, Thomas Huckaby, a Tennessee teleworker for an employer out of Queens, New York, appealed to the US Supreme Court. (Thomas J. Huckaby v. Division of Tax Appeals et al., 4 N.Y.3d 427 (2005).) In October 2005, the US Supreme Court declined to hear the case, letting stand the lower court's opinion that New York can impose its income tax on employees providing services outside the state.


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For additional information concerning this Alert, please contact:
Workforce Tax Services - Employment Tax Advisory Services
   • Kristie Lowery (
   • Kenneth Hausser (
   • Debera Salam (


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