No free lunch
From the Tax Policy Center
Income tax is generally imposed by the state in which the income is earned. However, various states have entered into reciprocity agreements with one or more other states that allow income earned in another state to be taxed in the state of residence. For example, Maryland’s reciprocity agreement with the District of Columbia allows Maryland to tax income earned in the District by a Maryland resident. As of 2004, sixteen states had adopted reciprocity agreements; typically these are states with employment centers close to a state border and large flows in both directions.
I think Massachusetts would be foolish to enter such a reciprocity agreement with New Hampshire due to the lopsided balance of Mass earners to NH earners who cross the boarder each day. A simple view of the traffic in the morning says it all.
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