To amend the Internal Revenue Code of 1986 to provide that no deduction shall be allowed for personal income taxes paid to a State (or political subdivision thereof) which taxes nonresidents on income derived from certain Federal areas.

Amends the Internal Revenue Code to deny a deduction for personal income taxes paid to a State (or political subdivision thereof) which taxes nonresidents on income derived from a Federal area used for Federal military defense purposes which includes portions of Kentucky and Tennessee.

[Congressional Bills 104th Congress]
[From the U.S. Government Printing Office]
[H.R. 1792 Introduced in House (IH)]







104th CONGRESS
  1st Session
                                H. R. 1792

To amend the Internal Revenue Code of 1986 to provide that no deduction 
    shall be allowed for personal income taxes paid to a State (or 
   political subdivision thereof) which taxes nonresidents on income 
                  derived from certain Federal areas.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              June 8, 1995

   Mr. Bryant of Tennessee introduced the following bill; which was 
              referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to provide that no deduction 
    shall be allowed for personal income taxes paid to a State (or 
   political subdivision thereof) which taxes nonresidents on income 
                  derived from certain Federal areas.
    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. DENIAL OF DEDUCTION FOR INCOME TAXES PAID TO STATES WHICH 
              TAX NONRESIDENTS ON INCOME EARNED IN CERTAIN FEDERAL 
              AREAS.

    (a) In General.--Section 164 of the Internal Revenue Code of 1986 
(relating to deduction for taxes) is amended by redesignating 
subsection (g) as subsection (h) and by inserting after subsection (f) 
the following new subsection:
    ``(g) Denial of Deduction for Taxes Paid to States Which Tax 
Nonresidents on Income Earned in Certain Federal Areas.--
            ``(1) In general.--No deduction shall be allowed under this 
        section for personal income taxes imposed by any State (or 
        political subdivision thereof) which imposes a tax on income--
                    ``(A) from transactions occurring or services 
                performed in a specified Federal area located within 
                such State, and
                    ``(B) of any individual--
                            ``(i) who is not a resident or domiciliary 
                        of such State, and
                            ``(ii) who is a resident or domiciliary of 
                        an adjacent State.
            ``(2) Personal income taxes.--For purposes of this 
        subsection, the term `personal income taxes' means income taxes 
        which are not paid or incurred in carrying on a trade or 
        business or an activity described in section 212.
            ``(3) Specified federal area.--For purposes of this 
        subsection, the term `specified Federal area' means any Federal 
        area which is used in whole or in part for Federal military 
        defense purposes and which includes portions of Kentucky and 
        Tennessee.''
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1994.
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