New York courts have ruled that the state of New York can collect income taxes from people who don't actually work in New York.

The Court of Appeals ruled 4 to 3 that a computer programmer for a group of trade unions in Queens who works mostly out of his home in Nashville must pay New York State tax on all his income, not just on part.

The programmer, Thomas L. Huckaby, had argued that since he worked only a quarter of the time in Queens, he should pay New York tax on only a quarter of his income. But the court ruled that because the source of Huckaby's income was in New York--and because he was in Tennessee as a matter of personal convenience, and not because his employer needed him to work there--he must pay tax on his full income.

The decision, by Judge Susan Phillips Read, stated that he "is the one who chose to accept employment from a New York employer (with the advantages of a New York salary and fringe benefits) while maintaining his residence in Tennessee, some 900 miles and a two-hour plane trip distant from his New York employer's office."

Now keep in mind that this guy lives in Tennessee, which has no state income tax. Therefore the state of Tennessee doesn't have any vested interest in Huckaby's suit.

Where it will really get interesting is when they go after telecommuters in states that do have state income taxes. Will Connecticut let New York take away thousands of dollars in income taxes, because a telecommuter travels to the New York home office every other month?

When states try reaching across the border to make a money grab, it could get really ugly. (Civil war kind of ugly.)