Remote Work, Office Amenities and SALT: How Multi‑Amenity Developments Affect State and Local Taxation

Hook: The overlooked tax danger inside amenity‑rich developments

Employers, developers and high‑net‑worth residents love amenity‑rich developments—gyms, indoor dog parks, salons, concierge coworking floors. But those same features are quietly creating new SALT, payroll and residency exposures as remote work becomes permanent. If your company or portfolio has people working regularly from a building with employer‑run facilities, you may already owe multistate withholding, face audit risk, or have unintentionally created nexus. This article explains how and what to do now.

Executive summary — what matters now (most important first)

In 2026, several trends collided: states increased SALT enforcement after expanded remote work, developers added more employer‑oriented on‑site services, and tax authorities sharpened scrutiny of where work actually occurs. The practical consequences:

• Employee location drives withholding and payroll exposure. If employees perform services in a state—even occasionally—states expect withholding and payroll tax compliance.
• Employer‑provided facilities can create worksite nexus. Employer‑operated salons, retail concessions or co‑working floors may establish a taxable presence for state income, sales or gross receipts taxes.
• Amenity value raises compensation questions. How a state treats a free gym membership or on‑site salon affects payroll taxes and SALT allocation.
• Residency risk for individuals increases. Living habitually in a different state floor or amenity cluster—using corporate lodging or a concierge apartment—can create statutory residency or domicile disputes.

Immediate action: map where employees physically work (not just addresses), inventory employer‑run services, and adopt withholding and benefits documentation policies now.

The 2026 landscape: why states care more than ever

Late 2024 through 2026 saw sustained enforcement activity by state tax departments focused on remote work and multistate withholding. Several states issued updated guidance clarifying when employee presence creates withholding obligations and when employer facilities constitute a business presence. At the same time, commercial developers doubled down on amenity investment to attract tenants and residents—embedding services historically provided off‑site into the building footprint.

Why this matters: state tax law still generally looks to where services are performed (the situs of labor) to allocate income and require withholding. When an employer furnishes an on‑site salon or runs a staffed co‑working floor with assigned desks, that facility becomes an obvious place of performance and a potential nexus generator.

How amenities create real SALT and payroll problems — examples

1. On‑site coworking floors and conference centers

Scenario: A technology firm leases a branded coworking floor inside a downtown mixed‑use tower. Employees from multiple states use assigned desks and client meeting rooms several days a month. The state where the building sits audits and asserts that the firm has a business situs for payroll and corporate income tax. The state also demands payroll withholding for any days employees worked in the state.

Why: Regular use of a company‑controlled worksite is classic nexus and payroll exposure. Remote work that occurs in employer‑operated spaces is as taxable as work in a traditional office.

2. Employer‑operated retail (salons, convenience stores)

Scenario: A developer partners with a large employer to run a staffed salon for residents and tenant‑employees. The salon charges fees and is billed through the employer. State auditors treat the salon as taxable retail activity of the employer, requiring sales tax collection and potentially expanding the employer’s business tax footprint.

Why: Retail operations inside a building are often separate taxable activities. When the employer bills and operates the service, the employer—not the building HOA—may carry the tax obligations. Consider routing operations to third‑party operators where possible to clarify tax lines.

3. On‑premises childcare or dog‑care services

Scenario: An employer funds a staffed indoor dog park and daycare center for tenant‑employees. Some employees use the service daily and bring in paying clients. The state claims payroll tax on the value of the services provided and examines whether the facility creates nexus for employer state taxes.

Why: Employer‑provided goods and services can be taxable compensation if not structured correctly and can create nexus when services generate revenue or public access. For pet‑care models, see operational parallels in pet‑focused apartment and salon programs.

4. Temporary corporate housing in another state

Scenario: Employees are offered temporary corporate lodging in a flagship tower while working on a project. Several high‑income employees spend months living there, retaining ties to their home state. Both the employee and employer face exposure: the state with the lodging asserts statutory residency and payroll withholding, while the home state contests domiciliary status.

Why: Statutory residency thresholds—often 183 days or a broader “regularly present” standard—can be triggered by prolonged stays in another state. Employer‑provided housing is a common audit trigger. For guidance on managing cross‑border workforce documentation and related process automation, consider resources on automating work‑permit and residency processes.

“Providing services where your people live and play can look a lot like doing business in that state.”

Key legal concepts to track (and how they interact)

• Worksite nexus — States assert nexus when an employer has a physical presence that produces revenue or where services are provided.
• Payroll tax and withholding — Withholding obligations generally follow the state where services are performed, not where payroll is processed.
• Residency vs domicile — Domicile is intent‑based; statutory residency is day‑count based. Amenity use and employer lodging can affect both. Consider adding identity and presence verification when disputing domiciliary claims; see verification layer thinking for practical controls.
• Amenity tax treatment — Employer‑provided benefits may be taxable compensation or a nontaxable fringe depending on federal rules and state conformity.
• Sales and excise exposure — On‑site retail, salons or paid services likely trigger sales tax collection obligations.

Practical, actionable steps for employers and developers (checklist)

Begin with a low‑cost, high‑impact compliance triage. Below are prioritized steps to reduce SALT and payroll risk:

1. Map physical presence: Inventory every employer‑controlled amenity, its operator, billing flow and physical footprint. Include common areas used for work (lounges, conference rooms, desks).
2. Track days worked by location: Institute simple digital check‑ins for employees who use building workspaces. Use badge swipes, desk reservations or app logs to create an auditable record.
3. Segregate amenity operations: Where feasible, run amenity services through independent contractors or separate legal entities, with arms‑length billing and contracts. See operational playbooks on outsourcing amenity operations.
4. Update payroll and withholding: Withhold based on actual work location; if you cannot track days robustly, consider voluntary withholding in higher‑risk states and maintain escrow reserves for audits.
5. Document benefits and valuations: For employer‑provided services, document policies, eligibility and valuation methods. Treat frequent amenity use as potential taxable compensation if not clearly excludable.
6. Limit employer “residency” exposure: For corporate housing, limit stays, require employee attestations, and maintain evidence of continued domicile elsewhere for employees you do not wish to shift to the host state.
7. Consult state guidance: Regularly review updates from states where your employees or amenities are located; many states issued new remote‑work guidance through 2025 and early 2026.

Draft policy language — quick templates to implement today

Use these short policy snippets as starting points. Modify them with legal counsel to match your facts.

• Location attestation: “Employees must record each day they perform work at a company‑operated worksite. Failure to record may result in withholding adjustments.”
• Amenity use valuation: “Employer‑provided services (e.g., salon, dog care, gym) may be treated as taxable compensation where required by law. Employer will provide annual statements valuing provided services.”
• Temporary housing limit: “Corporate lodging provided for business projects is limited to X days per employee per calendar year unless preauthorized by HR and tax.”

Advanced structural strategies for developers and employers

For high‑risk situations—large coworking footprints, revenue‑generating amenities, or high concentrations of multistate employees—consider:

• Third‑party operators: Outsource salons, retail and food services to independent vendors and ensure contracts allocate sales tax collection to the operator. Operational playbooks like Advanced Ops Playbook 2026 provide useful vendor models.
• Separate legal entities: Place amenity operations in standalone entities (LLCs) with distinct tax registrations, leases and bank accounts to limit cross‑exposure.
• Usage fees: Charge market rent or usage fees to employer tenants for coworking floors rather than providing free access—creates clearer transactional lines and helps allocate tax responsibility.
• Accord tax gross‑ups carefully: If you compensate employees for amenity taxes, do so with gross‑up calculations and withhold appropriately.

Case studies — practical lessons from 2024–2026 audits

Case study A: The branded coworking floor

Fact pattern: A software firm with 120 remote staff operated a branded coworking floor in a Manhattan tower. Employees logged in and took client calls there two to three days per month. A state audit in late 2025 assessed withholding and corporate income tax, arguing the floor was a fixed place of business.

Outcome: The firm negotiated a settlement after documenting limited revenue attribution, but paid significant back withholding and interest. Lessons: timely desk reservation records and arms‑length leases would have reduced exposure.

Case study B: Salon operated by employer

Fact pattern: A developer contracted with a payroll employer to offer discounted salon services to its tenant‑employees. The employer billed the salon through payroll and provided subsidies.

Outcome: State auditors treated the salon as employer‑operated retail, asserting sales tax and expanding employer nexus. The employer remedied the issue by transferring operations to a third‑party vendor and restructuring billing. Lessons: who bills and who operates matters. See practical salon operations notes in the Salon Pop‑Ups playbook.

How states are responding — 2025–2026 trends you need to know

Across 2025 and early 2026, states intensified enforcement in three ways:

• Increased focus on multistate withholding audits — Auditors are asking for desk‑level evidence of where services are performed and comparing it to withholding records.
• Scrutiny of employer‑operated amenities — States are examining whether amenities generate revenue or public access and thus create nexus for sales and business taxes.
• Data sharing and analytics — Revenue departments use building access logs, cellphone data, and payroll feeds to identify likely noncompliance. Consider secure data patterns and cost management when storing audit evidence; see storage strategies in Storage Cost Optimization.

Expectation for 2026 and beyond: states will increasingly issue formal guidance on the tax treatment of employer‑provided amenities and co‑working spaces; however, rules will remain fact‑specific and vary significantly by state.

What advisors should recommend to clients now

• Perform a rapid risk assessment focused on the top 10 amenity locations with the highest employee use.
• Implement location tracking for worksite days and integrate that data with payroll. A micro‑app approach to quick deployment can help—see a starter kit for rapid apps here.
• Move revenue‑generating amenities to third‑party operators where possible.
• Adopt transparent valuation and reporting for employer‑provided services so employees receive accurate Form W‑2 reporting when required.
• Create a tax reserve policy to manage potential retroactive liabilities from audits.

Red flags that trigger audits

• Employer pays for amenities and bills them through payroll without clear valuation.
• Employees routinely work from building common spaces or reserved desks across state lines with no recorded day counts.
• A building highlights employer “pop‑ups” or branded services in marketing materials that suggest a fixed place of business.
• Corporate housing or long‑term lodging without documented business purpose and time limits.

Final checklist — 10 things to implement in the next 90 days

1. Inventory all employer‑run amenities and who operates them.
2. Start desk‑level location tracking (badge or reservation system) for employees using on‑site workspaces.
3. Review payroll withholding practices and update for states where days are recorded.
4. Amend vendor and lease agreements to allocate tax liabilities clearly.
5. Document valuation methods for any in‑kind benefits and communicate them to employees.
6. Limit corporate lodging duration and collect domicile attestations where necessary.
7. Implement contracts with third‑party operators for retail, salon and food services.
8. Create a tax reserve and disclosure process for potential state assessments.
9. Train HR and real estate teams on SALT implications of amenity operations.
10. Engage multistate tax counsel to review high‑risk locations and draft policy language.

Looking ahead: predictions for how SALT will treat amenities in 2027+

We expect the following developments:

• More state guidance: States will publish specific rules addressing employer‑operated amenity spaces and co‑working arrangements.
• Safe‑harbors: Some states may create safe‑harbors for incidental amenity use that does not produce revenue or exceed minimal desk days.
• Technology integration: Employers will increasingly deploy integrated workspace management systems that feed directly into payroll and tax engines. For architecture ideas on edge registries and cloud filing relevant to distributed amenity data, see Beyond CDN.
• Increased structuring: Developers and employers will more frequently adopt entity and contractual structures to ring‑fence amenity tax exposure.

Closing — what to do next

Amenity‑rich developments create enormous business value but also new tax complexity. The combination of permanent remote work and on‑site services means that the old assumption—“we only withhold where payroll is processed”—no longer holds. Take these three immediate steps: map your physical presence, begin tracking worksite days, and consult multistate tax counsel to assess whether your amenity operations should be restructured or reclassified.

Call to action: If you manage employees or assets in amenity‑rich properties, schedule a compliance review now. Our SALT specialists help employers and developers implement location tracking, restructure amenity operations, and negotiate with state revenue departments to reduce exposure. Contact us for a tailored risk assessment and practical remediation plan.

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