How remote work can help boost rural communities
In recent years, our understanding of life and work has undergone seismic changes. Not so long ago, most of us had to live close to our jobs, with certain cities, states, and regions attracting specific groups of industries and occupations.
But the explosion of remote work has changed everything; this change has decentralized industries and helped often overlooked markets become viable places for new types of workers. A software developer, for example, should theoretically no longer need to live in a $3,000 studio in San Francisco or New York. A 30-something biotech salesman doesn’t have to have roommates in Boston anymore.
Studies suggest that this trend is here to stay. A “future of work” report from UpWork, for example, predicts that 22% of Americans will become remote workers by 2025, an 87% increase from pre-pandemic levels.
What will an influx of remote workers mean for more rural areas? More oat milk options at the grocery store? A sea of MacBooks breaking over the corner café? May be. But there are also serious economic benefits to consider.
New local revenues
Tulsa, Okla., implemented a remote work program before it was cool to do so. Long before the pandemic, in late 2018, a program called Tulsa Remote was launched to entice remote workers to relocate to a city and part of the country that most had never considered. The program was prepared to offer them $10,000, plus an impressive suite of community benefits, for those who moved there for a year.
It was a bold and creative experiment that ended up paying off, literally. Propelled by office closures and the rise of remote working, the program has now attracted more than 1,600 people.
According to a recent report by the Economic Innovation Group, the program generated $62 million in new local revenue in 2021. cars, furniture, houses – and paying local taxes too.
Beyond just a local cash injection, the analysis also found that on average, about one new job was created in Tulsa for every two remote workers who moved. The report projects that at its current growth rate, the program could generate $500 million in new local revenue and support up to 5,000 high-impact jobs by 2025, including thousands of relocated teleworkers and at least 1,500 new local full-time equivalent jobs. .
A remote opportunity for CPAs, professional services
CPAs, attorneys and other service providers in rural communities also have something to gain from an influx of remote work. The rise of remote work has been rapid, but our financial and regulatory infrastructure hasn’t quite caught up with the many nuances that might come with living and working away from a corporate headquarters. Filing taxes will be a mess for some remote workers, and they’ll likely be looking for insightful and trustworthy local professionals to help them through the complicated process and who could become long-term financial planning partners. Here are some examples.
Creation of a compliance burden: Remote work affects taxes both at the individual level and at the company level. Remote workers have created a compliance burden for their business when they move. Compliance in this area can be a heavy burden, especially if a remote worker’s employer is a small business. While most of the compliance burden inevitably falls on the employer, there will likely be an opportunity to educate.
Their former state might call: If remote workers think they can avoid their tax liability by moving to a state like Texas with no income tax, they might be surprised. States don’t tend to let their tax base go lightly and have been known to put their revenue departments on the case to verify that someone has indeed moved.
Multi-state taxes causing a headache on several levels: Paying multiple state taxes is probably the biggest chunk of pandemic-related taxes that taxpayers working remotely are failing to fully grasp. Previously, multi-state taxes were only an issue for professions like entertainers or professional athletes, who owe taxes to the different states in which they play or perform. Now, this could be common for almost any profession, as remote workers roam and work freely across the country. , sometimes spending a lot of time in several places.
Reverse the brain drain
For several decades, rural municipalities have been suffering from a “brain drain” to the benefit of metropolitan areas. This is a challenge, especially in rural areas of the United States. Local taxpayers fund public infrastructure such as K-12 schools and local universities, which train local minds, to find young adults leaving for other parts of the country where they can find jobs – and then put down roots. and, yes, pay taxes.
The subject of remote work is for me a personal subject. During the pandemic, my husband and I, both empty nests, moved from the Chicago metro area to Brussels, Wisconsin, a town of 1,105, with a bar, a small grocery store, and a restaurant. Although there have been discussions on a local Facebook group about how remote workers could change the city’s culture, the overwhelming majority of residents have been welcoming. Known primarily as a vacation spot, the city’s local real estate market has taken off with new interest in permanent residences, and thanks to our new connectivity to Starlink, this small town is just as good for working remotely.
An influx of remote workers could certainly be a cultural shift for a rural community, but there are serious reasons for optimism. Whether you’re a CPA, a lawyer, a bartender, or an engaged member of a rural community, this trend will likely bring new opportunities and positive impact directly to you.
This article does not necessarily reflect the views of the Bureau of National Affairs, Inc., publisher of Bloomberg Law and Bloomberg Tax, or its owners.
Jody Padar, CPA, is a tax manager at April, a smart tax platform. She is the author of “From Success to Matter: The Guide to the Radical CPA,” “The Radical CPA: New Rules for the Future-Ready Business,” and “Botkeeper for Dummies.”
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