Working From Home Stirs New Fight Between States Over Cross-Border Taxation

New Hampshire Gov. Christopher Sununu delivers remarks during the ribbon cutting ceremony for the grand opening of DraftKings Sportsbook Manchester in Manchester, N.H., on Sept. 2, 2020. Scott Eisen/Getty Images for DraftKings

WASHINGTON—Remote work during the COVID-19 pandemic has become a standard practice for many companies, although it has prompted a new interstate conflict over taxing Americans who work from home in a different state.

A legal battle between New Hampshire and Massachusetts has erupted that could have broader implications for shaping state tax policies throughout the country.