New Hampshire Sues Massachusetts Over Income Tax Collection Battle

Taxation News

December 28, 2020

In response to the Commonwealth of Massachusetts’ effort to tax commuting New Hampshire residents who normally work in state but reside in New Hampshire, the Granite State has filed a lawsuit in the United States Supreme Court over what Governor Sununu’s office is calling a “Massachusetts unconstitutional tax grab.” The Governor and Attorney General Gordon MacDonald are asking the U.S. Supreme Court to intervene. The Bay State’s tax grab, implemented this past summer due to the COVID pandemic and the work-from-home business model, has become a major issue for New Hampshire residents working in Massachusetts.

According to the official website of the New Hampshire governor, "New Hampshire has no choice but to seek relief in our Nation’s highest court," said Governor Chris Sununu. "Massachusetts cannot balance its budget on the backs of our citizens and punish our workers for working from home to keep themselves, their families, and those around them safe. We are going to fight this unconstitutional attempt to tax our citizens every step of the way, and we are going to win."

Apparently, New Hampshire’s attempts to resolve this without the court system has fallen on deaf ears in Massachusetts, in the words of the Governor.

The complete lawsuit, as filed, may be read here.

New Hampshire views this action by Massachusetts as an unconstitutional overreach and a threat on the sovereignty of the Granite State. The lawsuit asks for certain relief as well as immediate refunds with interest for taxes collected from New Hampshire residents who are physically working in New Hampshire by the Commonwealth of Massachusetts.

The Governor’s press conference, which outlines the state’s can be heard here. This 13-minute video will be of interest to New Hampshire residents affected by this tax battle.

The Boston Herald reports “Under the policy, employees who live outside Massachusetts are only taxed for the number of days during week they would have physically commuted into the Bay State for work, which the state Department of Revenue said aligns with pre-pandemic taxation rules. Nearly 100,000 Granite Staters normally commute to work in Massachusetts, according to a 2017 study.”

Fourteen states have joined the New Hampshire lawsuit in an effort to convince the U.S. Supreme Court to hear the case.


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