Suppose you’re an employee of a business in New York, and you reside in New York. You come to California on business for a convention and stay for ten days. Later, you visit relatives in California for a week. Did you realize that you owe California taxes?
Yes, that’s the law. If you’re not paying, you’re not alone. Most employers ignore out-of-state tax issues, and it’s very difficult for the Franchise Tax Board to go after employers in Nebraska (for example).
California’s rule is 14 days. Other states have different rules. There’s a bill in Congress to make the rule uniform throughout the United States and only allow states to tax out-of-state employees at 60 days. The AICPA has endorsed the bill; I like it, too. Unfortunately, the bill has only three co-sponsors and is unlikely to emerge from Congress quickly.
Hat tip: Tick Marks and Roth Tax Update