Unlike many of its neighbours, New York applies the 'convenience of the employer' test when deciding how to tax telecommuters, rather than basing their assessment on the residence status of the worker in question.

In the Matter of Huckaby v New York State Division of Tax Appeals, this means that although computer programmer Thomas L. Huckaby lives and works in Tennessee, and spent just 25% of his working days during the period in question physically present in New York, the state tax authorities believe that he is liable to pay tax there on 100% of the income that he earned.

This decision was disputed by Mr Huckaby, although he acknowledged liability for New York income taxes for the portion of his working life spent in New York between 1994 and 1995.

According to the New York Law Journal, Mr Huckaby's attorney, Peter Faber has argued that determining the taxation of telecommuters on the basis of whether their status is necessary, or merely convenient, for their employer violates the equal protection and due process clauses of the US Constitution.

However, Assistant Solicitor General, Julie Mereson reportedly argued that the test allows the authorities to protect New York's tax base from erosion.

The state, according to Ms Mereson, "provides Huckaby's employer with benefits and protections 365 days a year, enabling it to offer Huckaby employment."

She continued:

"New York provides Huckaby the opportunity to earn his income and the protections and benefits that flow from an organized and civilized society capable of supporting the business that employed him."