The Risky Business of Navigating Cross-Border and Multi-State Payroll Tax Requirements

Doing business in multiple states and countries is a good thing — a sign of growth and expanding business opportunities. For multi state payroll departments, meeting the payroll tax requirements of the 50 US states and other territories can add risk, and an administrative burden. Audits and government enforcement is also on the rise, with states like Connecticut and New York using electronic audit methods to analyze transactional data in order to identify short-term business travelers who fail to pay their nonresident income tax.

Additionally, taxes for employees who are residents of one state and work in another is another potential compliance nightmare, requiring payroll teams to potentially navigate 54 different sets of filing rules. Failing to comply with multi-state payroll taxes are significant. It’s no wonder Bloomberg ranked this issue as among the top problems facing payroll professionals today.