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Employees moved again. This time, some chose to relocate to a state where the business no longer had any physical footprint. They kept the same roles, worked remotely, and continued to be paid as usual. No decision was made to re‑enter that state commercially, and no one internally saw this as a tax trigger. Over time, a portion of the workforce was living and working there on a sustained basis. By the time the position was reviewed, the facts had shifted. The earlier de‑registration was not revisited, and wages that needed to be considered in that state had not been reported. No new office was opened. No expansion took place. The workforce moved, and the payroll tax position moved with it. That is how these exposures tend to build. Quietly, and over time. Where the Complexity Builds The state nexus question is where the issue begins. It is not where it ends. For employers operating across more than one jurisdiction, thresholds do not apply independently to each state in the way they often expect. In New South Wales, for example, the
I have seen situations in practice where a business genuinely believed it had no ongoing exposure in a state because it no longer had an office there. The original position was reasonable at the time.
where the employer is based, and, in some cases, where wages are paid. The outcome is that each employee’s wages sit in one jurisdiction for payroll tax purposes in any given month, even where their role spans multiple locations. That distinction matters in a remote and mobile workforce. I have seen situations in practice where a business genuinely believed it had no ongoing exposure in a state because it no longer had an office there. The original position was reasonable at the time. Offices had closed. Employees had relocated. Registrations were cancelled. What changed later was not driven by the business. It was driven by the workforce.
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GLOBAL PAYROLL MAGAZINE ISSUE 25
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