We have an employee that is moving to Tennessee from Michigan. We don't have nexus in Tennessee and don't do business in Tennessee. This employee will be working remotely. Tennessee does not have an income
Is there anything we need to be aware of for this type of setup?
Would the employee be better classified as a consultant even if they're doing basically the same job?
Thanks,
Josh
Their classification as employee vs. contractor may be less important than what, exactly, they are doing for you. Sales and
Thanks for the response Mark, and the link.
If your employee has equity compensation awards, such as stock options or restricted stock with vesting requirements, when you speak to your tax advisor about the mobility issues mentioned by Mark, be sure to inquire about any adverse tax consequences that might be triggered around equity compensation awards, too. Sometimes state jurisdictions claim the gain on the awards at vest as taxable income when vested while the award recipient is resident in the state, even if the work is performed outside of the state.
You need to also be aware of unemployment benefits reporting and possible sales tax reporting requirements in a state where you have a remote worker, even if they don't have a state income tax. I agree with Mark that you should check with your tax advisor before guessing at the right result.
