NEW YORK, NY March 30, 2005 —New York's highest court ruled that telecommuters who live out of state but work for a New York company, must pay state income taxes. The Court of Appeals decision could have wider implications as more people work at home for a company located far away.

The International Telework Association found that more than 12 million people used computers and telephones to work from home last year that's up 200 percent from the last census in 2000.

In its 4 to 3 ruling, the court said New York has the right to tax 100 percent of a non-resident's income derived from New York sources. Yet, the dissenting opinion says the ruling gives too much authority to the tax commissioner and the employer.

The case involving a computer programmer, living in Tennessee and working for a New York company may be brought to the US Supreme Court.