Given the potential savings, hedge funds, private equity firms and other investment companies have been inundating accountants and lawyers for advice on lowering their UBT bills.
“The asset managers are very savvy. They’re all over this,” said Nishant Mittal, senior vice president and general manager of business travel at San Francisco-based Topia.
The first hurdle for companies: proving employees are truly working outside the city.
Finance Department officials may add other obstacles. They may try to dissuade firms from deploying the strategy by issuing a regulation clarifying how the UBT should be calculated by firms whose employees are working from home.
For example, officials could argue that employees are still relying on technology, including computer servers and networks, that operate from their New York City offices, said Maury Cartine, a lawyer and certified public accountant who is a partner at accounting and tax advisory firm Marcum.
Absent that, the city could hold off taking a position and audit firms down the road. Ultimately, disputes could be settled in court, he said.
“You can bet your last dollar that New York City is not going to be rolling over on these issues, because of the amount of money involved,” Cartine said.
This article was provided by Bloomberg News.