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Got a telecommuter in New Jersey? You still have a tax problem

Jessica Stillman — Tue, 20 Mar 2012 13:01:38 +0000

Technology moves quickly. Congress, not so much. So as we’ve reported here on GigaOM before, while telecommuting is growing in popularity, the laws regarding the tax obligations of companies that employ remote workers remain murky. Despite stalled efforts by lawmakers to reform the situation, organizations with workers in other states can be on the hook for state taxes in their remote workers’ home states.

The problem was illustrated last year by a case in which a Maryland-based company, TeleBright Software Corp, was ruled to be doing business in New Jersey and liable for state taxes there because the firm employed a single telecommuter in the state. The company appealed the decision and now that ruling is in as well. The result offers no cheer for fans of remote work, as CFO magazine reports:

In the latest ruling of a state court on the issue of nexus — taxation based on location — a New Jersey appeals court held on March 2 that employing a telecommuter in another state subjected Telebright Corp., a Maryland-based software developer, to the N.J. Corporation Business Tax (CBT).

The employee in question in the case developed and wrote software code from a laptop computer in New Jersey… The employee began working for Telebright in Maryland in 2001. But in 2004, she moved to New Jersey. To retain her services, the company allowed her to telecommute full-time from New Jersey. In Telebright Corp., Inc. v. Director of Taxation, a New Jersey Superior Court found that the company was liable for N.J. CBT because of the activities of its lone employee in the state. This month the appeals court upheld that ruling.

Check out the complete article in CFO for more details of the court’s legal reasoning. While it’s clear that cash-strapped states can certainly use all the revenue they can get. It also seems like they could use all the jobs they can get. The clear takeaway here for those not directly responsible for sorting our their organizations’ tax and legal position is clear – it’s past time that congress makes it easier for workers and firms to take advantage of the flexibility technology offers by clarifying their tax obligations. Any day now, guys.

Has your firm run into any tax worries due to telecommuting?

Image courtesy of Flickr user MPD01605.

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Freelancers Union to expand health insurance offerings

Jessica Stillman — Fri, 24 Feb 2012 14:02:05 +0000

The number of independent workers is on the rise. That’s good news for professionals who want to control their own varied and interesting careers, but if you’re based in the U.S. being independent also comes with some significant benefits headaches, with how to obtain affordable health insurance primary among them.

But if independent workers live in New York, New Jersey or Oregon, they will soon have a new option when it comes to obtaining coverage thanks to the Affordable Care Act (aka Obamacare to its detractors) and the Freelancers Union. The organization, which currently has 170,000 members, was recently awarded $340 in low or no-interest federal loans through the Centers for Medicare and Medicaid Services to launch “consumer operated and oriented plans,” or Co-Ops that are open to everyone, including independent workers who typically struggle to find affordable coverage. The new plans will be non-profit and will be run by a local CEO and board of directors in each state.

The Co-Ops are set to begin enrolling members in the fall of next year and to begin offering benefits in January 2014. The Freelancers Union already covers around 23,000 workers and their family members in New York States through its existing insurance offerings, but anticipates covering an additional 200,000 workers across the three states within five years.

By cutting out the for-profit health insurance industry out of the equation, Co-Ops are intended to return insurance to its roots, in which workers pooled risk and supported each other. And by competing with private plans, the Co-Ops should also drive down costs for patients. “Co-Ops will promote competition in the insurance market and respond well to the health care needs of Americans,” according to Marilyn Tavenner, acting administrator of the Centers for Medicare and Medicaid Services.

“It’s like venture capital for healthcare,” said Sara Horowitz, executive director of the Freelancers Union. “By empowering nonprofit social entrepreneurs to compete with private insurers, Co-Ops provide a powerful new tool to bring more affordable options to the most people.”

Do you think the Obama administration’s healthcare reforms are the solution to independent workers’ health insurance woes?

Image courtesy of Flickr user Images_of_Money.

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Now live: Verizon’s smart energy home products

Katie Fehrenbacher — Mon, 16 Jan 2012 05:13:43 +0000

Phone company Verizon quietly launched its smart home products nationwide about three months ago, which enable customers to lock and unlock doors and windows, watch home video cameras remotely, and manage thermostats and lighting. This is the service Verizon launched in trials in New Jersey about a year ago.

Verizon discovered a few things about the service in the months it has been widely available, as well as via the months it was been available as a pilot service. First, Verizon Director of Product Development, Home Monitoring and Control Ann Shaub said Verizon’s standalone energy products haven’t been as attractive as the whole smart home package that includes cameras, door sensors, and door locks.

That’s not so surprising, as security and media management are clearly a lot more attractive to customers across the board compared to products used for reducing home energy consumption. Verizon also says it doesn’t make claims about saving energy for its home energy products, so it’s not actively marketing them as energy efficiency tools.

Verizon is currently working with Ingersoll Rand for its security products, and Aeon Labs for its thermostats and energy reader, which attaches to a circuit breaker and appliance switches. Shaub also told me Verizon is actively looking to add more smart home tools over the coming months.

Verizon says it has seen 95 percent of its smart home customers install their own devices. That could be a good sign for Nest, the smart learning thermostat startup, which is selling thermostats straight to consumers.

Verizon wouldn’t give me any information about the numbers it’s getting for its smart home tools at this point. Shaub would only say the division is here to stay, and it’s seeing significant growth.

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Why States Are Struggling With Cap-and-Trade Programs

Ucilia Wang — Tue, 31 May 2011 21:10:35 +0000

New Jersey has built a reputation for being clean-power friendly. Thanks to state incentives, it was the second largest market for solar panel installations in 2010. Yet New Jersey recently withdrew from the only green house gas emissions cap-and-trade program, undercutting nationwide efforts to promote renewable energy, and highlighting the difficulties states are facing when it comes to mandating carbon emissions reductions.

New Jersey republican Governor Chris Christie announced last week that the state will withdrawal from the Regional Greenhouse Gas Initiative (RGGI), which began in 2008 and was an initiative by 10 northeastern states to require power plant operators to gradually cut carbon dioxide emissions. The states sell emission permits through auctions and are supposed to use the revenues to fund clean power programs in order to further cut emissions.

Christie, who promised to become the state’s “No. 1 clean energy advocate” during his gubernatorial campaign in 2009, contended last week that the RGGI was ineffective in cutting emissions. In his statement to pull New Jersey out of the RGGI by the end of the year, Christie said the pricing for carbon allowances has been too low to create an economic incentive for power companies to curb emission. In fact, he said the use of natural gas instead of coal has made the most impact on reducing the state’s emissions because natural gas has become cheaper, and it emits fewer emissions than coal.

The timing of New Jersey’s move illustrates just how tough it is to use federal and state regulatory power to cut greenhouse gas emissions. Owners of power plants, oil refiners and other industrial operations often don’t want cap-and-trade programs largely because of the extra costs involved to implement programs, and have fought efforts to create a national program in recent years. Republicans also have derided cap-and-trade as a tax in disguise. Christie, too, called it a tax that will keep businesses away from New Jersey.

On the other hand, cleantech companies, which are building technologies to reduce carbon emissions, often favor cap-and-trade programs because they provide clarity — and extra revenues — for the markets they are trying to sell into. The heavy polluters buy the cleantech firms’ technologies to meet emission caps. Putting a price on carbon can make clean power and energy efficiency technologies, which are not yet at a large enough scale to benefit from the economies of scale, more economically viable. Christie says he still remains committed to boosting renewable energy installations in the state and cited the more than a dozen laws that promote clean energy generation.

But Christie’s decision sends a bad message. If more states follow New Jersey’s lead and withdraw from the cap-and-trade program, it will add more uncertainty to the cleantech market. There is no federal cap-and-trade program in the U.S., which is why states have taken up the charge. An energy bill with a cap-and-trade component passed the House in 2009 but never gained support in the Senate. But with some states participating in these programs, and some states opting not to participate, the state cap-and-trade programs aren’t as powerful or comprehensive as federal mandates would be.

Other states beyond New Jersey have had trouble, too. California had hoped to become the first state to implement a more comprehensive cap-and-trade program in 2012, but has had tough times implementing it. The problem came out of a lawsuit from environmental groups that believe the legislation will lead to more pollution in poorer neighborhoods, where heavy industries are more readily found, because polluters can buy credits to offset their emissions. The cap-and-trade program is itself part of a climate change law that was signed into law in 2006 but faced challenges at the polls last year.

With the current political climate – Republicans took control of the House this year and a presidential election will take place in 2012 – passing a national cap-and-trade program is now a fantasy. States have so far led the way, but with New Jersey’s move and problems in California, state cap-and-trade initiatives seem vulnerable as well.

Photo courtesy of Libelul via Flickr

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Can A New Jersey Utility Succeed Where Duke's Struggling?

David Ehrlich — Tue, 10 Feb 2009 16:18:23 +0000

Newark, N.J.’s Public Service Electric and Gas announced today that it wants to put solar panels pretty much everywhere — on utility poles and streetlights, on the roofs of schools and municipal buildings, on public housing, as well as in some ground-mounted systems — all part of a $773 million proposal to feed 120 megawatts into the grid.

But last month, Charlotte, N.C.-based Duke Energy said it may not go forward with~~wanted out~~ a similar solar project, unless ~~claiming that~~ the regulator removed restrictions for how it could pay for the plan (We updated this post to clarify the issue). The $50 million project to generate 10 MW of power from rooftop solar installations had already been cut down from $100 million and 20 MW after critics called the utility-owned plan anticompetitive.

Duke planned to recoup its costs entirely through rate hikes, drawing the ire of the North Carolina Utilities Commission, which ruled that Duke could get the solar power at a lower cost from third-party providers.

So how does PSE&G, part of the Public Service Enterprise Group, plan to pay for its much larger proposal? Well, customers will end up taking a hit on their monthly bills, but the bulk of the cash will come from new bonds and equity from the Public Service Enterprise Group. The global credit crunch could make that difficult, but Ralph Izzo, CEO of the group, told the New York Times that he doesn’t expect his firm to have a problem issuing the bonds.

The project, called Solar 4 All, will only account for about 1 percent of the power used in the Garden State, but PSE&G said it will satisfy almost 7 percent of the state’s renewable portfolio standards requirements through 2020.

We may have to wait a while to find out if the plan passes muster — the New Jersey Board of Public Utilities has 180 days to take action on the proposal — but PSE&G said it hopes to start installations this year, with the entire program rolling out over the next five years.

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Deepwater Utility Group Wins New Jersey Offshore Wind Bid

Craig Rubens — Fri, 03 Oct 2008 17:11:34 +0000

New Jersey is one step closer to bringing an offshore wind farm to the coasts of the U.S. Garden State Offshore Energy (GSOE), a joint venture between utility Public Service Enterprise Group (PSEG) Renewable Generation and Deepwater Wind, was selected by the New Jersey Board of Public Utilities today to build an offshore wind farm far off the Jersey coastline. The proposed 350-megawatt wind farm would consist of 96 turbines nearly 20 miles offshore. GSOE will receive a $4 million state grant to help cover permitting costs and spur project financing though the final project, to be completed by 2012, will likely cost well over $1 billion, according to the state.

This is the second large offshore wind contract Deepwater Wind has won. Just last week Deepwater was chosen by the Rhode Island Governor for a $2 billion offshore wind project. The New Jersey-based firm is backed by First Wind, DE Shaw & Co. and Ospraie Management.

GSOE was competing against four other contractors: Fishermen’s Energy, Bluewater Wind, Occidental Development & Equities and Environmental Technologies. Bluewater Wind, a subsidiary of wind giant Babcock & Brown, is already developing an offshore wind farm farther south. In June the company signed a 200-megawatt power purchase agreement with Delaware utility Delmarva for offshore wind energy to be built at the mouth of the Delaware Bay.

GSOE’s farm is to be part of new Jersey’s nefariously named “Energy Master Plan.” Similar to other states’ Renewable Portfolio Standards, the so-called master plan calls for 20 percent of the state’s energy to come from renewable sources by 2020. According to the 100-page cost-benefit analysis of offshore wind the Board of Public Utilities published, this wind farm could produce 1 percent of the state’s energy.

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