State taxation of a nonresident employee’s equity award, such as nonqualified stock options (NQSOs) or restricted stock units (RSUs), has long been a thorn in the side of many tax practitioners, payroll departments, and – of course – employees. In Appeal of Prince, California’s Office of Tax Appeals (OTA) recently addressed the state’s taxation of nonresident income.
In this SALT@Work column for the Journal of Multistate Taxation and Incentives, Eversheds Sutherland attorneys Charlie Kearns and Chelsea Marmor discuss the Appeal of Prince decision and rationale, and its potential application in other states.