The U.S. Supreme Court today kept alive federal litigation that could cost New York a big chunk of the billions of dollars in taxes it collects from nonresidents working for New York-based employers.

The state of New Hampshire had asked the Supreme Court to review a policy under which the neighboring state of Massachusetts has collected income tax from New Hampshire residents who formerly commuted to jobs in Massachusetts, but who have been required to work from home during the pandemic.

As a legal matter, the Court was being asked to take the highly unusual step of asserting “original jurisdiction” in a dispute between two states, skipping all of the usual intermediate steps in federal litigation. New Hampshire cited its “fundamental sovereign interests” in asking the court for leave to file a complaint against its neighboring state.

The case has huge implications for New York, which has long asserted the right to tax the earnings of nonresidents working for New York-based employers in other states. Since the pandemic began in March, this cohort has expanded to include hundreds of thousands of New Jersey and Connecticut residents who had been regular commuters to New York City.

After discussing the New Hampshire filing in their conference on Friday, the nine justices might have simply refused to hear the case. On the other extreme, they might have agreed to take the case right away. Instead, the justices chose a third route, summed up in a single sentence in today’s order list:

The Acting Solicitor General is invited to file a brief in this case expressing the views of the United States.

The Solicitor General of the United States works for the President—so, in effect, the justices want to know if Joe Biden thinks they should take up this case.

As a legal matter, this is a significant step, encouraging to backers of New Hampshire’s case—including the 14 states that filed two different amicus briefs supporting the motion. One of those amicus briefs—arguing that the New Hampshire motion presented an issue of “nationwide and pressing importance”—was filed by four states, including New Jersey and Connecticut, whose residents paid more than $5 billion of New York State personal incomes taxes in 2018.

As a political matter, the case creates an interesting conflict of interest for President Biden. New Hampshire is a political swing state that Biden carried in last November’s election. Massachusetts has long been one of the nation’s most thoroughly Democratic states, although it has a Republican governor. If New Hampshire wins, other beneficiaries would include low-tax red states such as Texas, which signed on to a brief supporting New Hampshire that was also supported by the states of Ohio, Arkansas, Indiana, Kentucky, Louisiana, Missouri, Nebraska, Oklahoma, and Utah.

Other than Massachusetts itself, the state with the greatest interest in squashing the New Hampshire motion is New York.  So far, however, the Cuomo administration has not (yet) bothered to submit a brief in the New Hampshire case.


About the Author

E.J. McMahon

Edmund J. McMahon is Empire Center's founder and a senior fellow.

Read more by E.J. McMahon

You may also like

NY’s pre-Covid tax base drain confirmed in new comptroller’s report

New York was a net loser of income tax filers to other states even in the five years leading up to the pandemic disruption of 2020 Read More

Upstate Economy at Risk Under NYC Renewable Energy Plan

While the power from these new projects will go directly into the City, all New York utility users will help pay for them through their utilities’ purchases of renewable energy credits.   Read More

The State of the State Spending Spree

The State of the State is the prelude to Hochul’s state budget reveal. It’s a budget that represents a generational opportunity. Read More

NY was leaking income millionaires in pandemic run-up

New York's share of the nation's income millionaire households continued to fall in 2019 Read More

SALT’s on the Table 

A bill passed this morning in the U.S. House of Representatives would lift the cap on state and local income tax (SALT) deductions from $10,000 to $80,000. Read More

Albany’s soak-the-rich push ignores the large grain of SALT

Tax proposals embraced by Democrats represent a sizable increase in a top rate that already stands at an all-time record high. Read More

The Pandemic Could Take Away Some NY Cash Cows

The Empire State has long asserted the right to tax nonresidents commuting to work in New York—even when their work is done at home. The payoff for Albany is huge: as of 2018, newly released state data show, nonresidents generated $7.4 billion in New York State personal income taxes, 15 percent of the total. Most of that came from people who were regular commuters before COVID-19 hit. Read More

As a Supreme Court Ruling Loomed, Cuomo Bent His Own Rules on COVID ‘Clusters’

In the midst of the constitutional showdown over his pandemic policies, Governor Cuomo made changes to a disputed Brooklyn 'cluster zone' that seemed to contradict his own declared guidelines. Read More


Sign up to receive updates about Empire Center research, news and events in your email.


Empire Center for Public Policy
30 South Pearl St.
Suite 1210
Albany, NY 12207

Phone: 518-434-3100

General Inquiries:

Press Inquiries:


The Empire Center is an independent, non-partisan, non-profit think tank located in Albany, New York. Our mission is to make New York a better place to live and work by promoting public policy reforms grounded in free-market principles, personal responsibility, and the ideals of effective and accountable government.

Empire Center Logo Enjoying our work? Sign up for email alerts on our latest news and research.
Together, we can make New York a better place to live and work!