Work From Home State and Local Taxation

Has any one started researching how to tax employees from their home locations without having to set up thousands of new location codes?  I read one community article on teleworkers and a solution for setting up location codes for each state.  We would also have to do this for local tax in the states that have local taxation, etc.  We are also trying to manage the best way to change an employees location since people can work from just about anywhere and some state laws state that if a person works one day in example; Colorado, we need to take