the Jock Tax

[Ed_Formerly_of_Roch]

I recall this was discussed awhile back, there was skeptisim as to whether this was correct or not, apparently it is:

 

The 'Jock Tax'

 

This tax, levied by 22 individual states on high-earning traveling workers, is called the jock tax because its most high-profile targets are famous athletes like basketball and football players. Technically, it is the most common form of what’s called “nexus,” which taxes income earned out-of-state. So, for example, Seahawks and Broncos players who traveled to New Jersey to play the Super Bowl will owe the state taxes on a percentage of their income when they file their 2014 tax return -- because New Jersey is where they earned it.

Who may be subject: Athletes are targeted by this tax because both their salaries and schedules are made public, but states have also tried to target traveling musicians, lawyers and bankers by looking up their travel records. Even if you aren’t a famous athlete or musician, if you travel for work, you should be on the lookout for this tax.

What you should know: ”The minute you spend one hour in a state on business, you could have, depending on the state rule, nexus there,” explains Rosen. “Every state has a different law.” And even if you don’t report your out-of-state income, you might not skirt this tax—other people could be reporting for you. “If you work for someone, they could write on your W-2 that you are in different states, that you go to different offices. If you’re self-employed, you might get a 1099 that is filed in that state office,” he says. “Or at a trade show, state officials may come up to you and say, ‘Are you registered to do business in this state?’ If you don’t report, your accountant is going to have to do a lot more work.” If you cross state borders in your work, inform your accountant of all earnings in other states—or at the very least, where you’ve traveled for business and what you were doing there. And yes, if this tax applies to you … you’ll want an accountant.