Duplicative Taxation Among the States A Problem Not Worth Solving?

Abstract

Recent legal and economic changes—not to mention the rise in telecommuting caused by COVID—have raised the salience of a long-simmering fact about the operation of state and local income tax systems: some multistate employers and employees pay a combined income tax liability that is higher than the tax they would have borne had they operated in just one jurisdiction. Seemingly beyond the reach of the courts to correct, there have been persistent calls for congressional action to eliminate or reduce this “duplicative” taxation. This Article suggests that the alleged problem may be both less of a problem, and more resistant to a solution, than is commonly understood.