Bloomberg Tax
April 5, 2022, 8:45 AM

How Remote Work Can Help Boost Rural Communities

Jody Padar
Jody Padar

Over the past few years, our understanding of life and work has gone through seismic shifts. Not too long ago, most of us had to live near our jobs, with certain towns, states, and regions attracting specific clusters of industries and professions.

But the explosion of remote work has changed everything; the shift has decentralized industries and helped often-overlooked markets become viable locales for new kinds of workers. A software developer, for example, theoretically should no longer need to live in a $3,000 studio apartment in San Francisco or New York. A 30-something biotech sales rep no longer needs to have roommates in Boston.

Studies suggest that this trend is here to stay. A “future of work” report by 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 in the grocery store? A sea of MacBooks washing over the local coffee shop? Maybe. But there are also some serious economic benefits to consider.

New Local Earnings

Tulsa, Okla., established a remote worker program before it was cool to do so. Long before the pandemic, in late 2018, a program called Tulsa Remote was launched as a way to attract remote workers to relocate to a city, and area of the country, that most had never considered. The program was willing to offer them $10,000, along with an impressive suite of community benefits, to those who would move there for a year.

It was a bold, creative experiment that wound up paying off—literally. Propelled by office closures and the rise of remote work, the program has now attracted more than 1,600 people.

According to a recent report by the Economic Innovation Group, the program delivered $62 million in new local earnings in 2021. That’s $62 million in new income being infused into Tulsa’s local economy—buying coffee, meals, cars, furniture, houses—and paying local taxes, too.

Beyond just a local infusion of cash, the analysis also found that on average, approximately one new job was created in Tulsa for every two remote workers who relocated. The report predicts that at its current growth rate, the program could drive $500 million in new local earnings and support up to 5,000 high-impact jobs by 2025, including thousands of relocated remote workers and at least 1,500 newly created full-time equivalent local jobs.

A Remote Opportunity for CPAs, Professional Services

CPAs, lawyers, 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 haven’t quite caught up with the many nuances that could come along with living and working far away from a company headquarters. Tax filing will be a mess for some remote workers, and they’ll likely be looking for insightful, trustworthy local professionals to help them wade through the complicated process and who could become long-term financial-planning partners. Here are just a few examples.

Creating a compliance burden: Remote work affects taxes on both the individual and corporate level. Remote workers have created a compliance burden to their corporation when they move. Compliance in this area can be a heavy lift, 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 ex-state might be calling: If remote workers think they’ll be able to avoid their tax obligation by moving to a state like Texas with no income taxes, they may be in for a surprise. States don’t tend to let their tax base go away lightly and have been known to put their revenue departments on the case to verify that someone did actually move.

Multistate taxes causing a multilevel headache: Paying multiple state taxes is probably the biggest part about pandemic-related taxes that remote-working taxpayers fail to fully grasp. Previously, multistate taxes were only an issue for professions like artists or professional athletes, who owe taxes to the varying states they play or perform in. Now it could be commonplace for nearly any profession, as remote workers are freely moving and working around the country, sometimes spending significant time in more than one location.

Reversing the Brain Drain

For the last few decades, rural communities have suffered from a “brain drain” in favor of metropolitan areas. It’s a challenge, especially in rural areas in the U.S. Local taxpayers fund public infrastructure such as K-12 schools and local universities, which train local minds, only to find young adults leaving for other areas of the country where they can find jobs—and then lay down roots and, yes, pay taxes.

The subject of remote work is a personal one for me. During the pandemic, my husband and I, both empty-nesters, moved from the Chicago metro area to Brussels, Wis.—a town with a population of 1,105, along with a bar, a small grocery store, and one restaurant. Although there was some chatter on a local Facebook group about how remote workers might change the town’s culture, the overwhelming majority of locals have been welcoming. Known mostly as a vacation area, the town’s local real estate market has taken off with new interest in permanent residences, and through our new connectivity to Starlink, this small town is just as good a place to work remotely.

An influx of remote workers could certainly be a cultural change for a rural community, but there are serious reasons to be optimistic. Whether you’re a CPA, lawyer, 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 opinion of The Bureau of National Affairs, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Jody Padar, CPA, is head of tax at April, an intelligent tax platform. She is the author of “From Success to Significance: The Radical CPA Guide,” “The Radical CPA: New Rules for the Future-Ready Firm,” and “Botkeeper for Dummies.”

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