To be clear, the company is still trying to figure things out, but mentioned that switching the role from full-time to contract may be the only option. What is it about Virginia's (or New York's) tax laws that would make it so financially burdensome for a NYC-based company to hire a remote FTE in Virginia?
you'll have to ask them. but it may have to do with being required to file a Virginia business income tax return as a FTE based there. But I would think they would have to file a DC business income tax return if you were based there. perhaps, as you stated, DC tax laws may be more favorable then Virginia's it could simply be a matter of tax rates,