Mobile Workforce State Income Tax Simplification Act of 2019
This bill prohibits the wages or other remuneration earned by an employee who performs employment duties in more than one state from being subject to income tax in any state other than (1) the state of the employee's residence, and (2) the state within which the employee is present and performing employment duties for more than 30 days during the calendar year.
The bill exempts employers from state income tax withholding and information reporting requirements for employees not subject to income tax in the state under this bill. For the purposes of determining penalties related to an employer's state income tax withholding or reporting requirements, an employer may rely on an employee's annual determination of the time expected to be spent working in a state in the absence of fraud or collusion by such employee.
For the purposes of this bill, the term "employee" excludes professional athletes; professional entertainers; production employees who perform services in connection with certain film, television, or other commercial video productions; and public figures who are persons of prominence who perform services for wages or other remuneration on a per-event basis.
[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 604 Introduced in Senate (IS)]
<DOC>
116th CONGRESS
1st Session
S. 604
To limit the authority of States to tax certain income of employees for
employment duties performed in other States.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
February 28, 2019
Mr. Thune (for himself, Mr. Brown, Ms. Baldwin, Mr. Barrasso, Mr.
Blumenthal, Mr. Booker, Ms. Cantwell, Ms. Collins, Ms. Cortez Masto,
Mr. Crapo, Mr. Cruz, Ms. Ernst, Ms. Hassan, Mr. Hoeven, Mr. Isakson,
Mr. King, Ms. Klobuchar, Mr. Leahy, Mrs. Murray, Mr. Portman, Mr. Reed,
Mr. Schatz, Mrs. Shaheen, Mr. Tillis, Mr. Toomey, Mr. Van Hollen, Mr.
Whitehouse, Mr. Wicker, Mrs. Hyde-Smith, Mr. Murphy, Mr. Peters, Mr.
Risch, and Mr. Lee) introduced the following bill; which was read twice
and referred to the Committee on Finance
_______________________________________________________________________
A BILL
To limit the authority of States to tax certain income of employees for
employment duties performed in other States.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Mobile Workforce State Income Tax
Simplification Act of 2019''.
SEC. 2. LIMITATIONS ON STATE WITHHOLDING AND TAXATION OF EMPLOYEE
INCOME.
(a) In General.--No part of the wages or other remuneration earned
by an employee who performs employment duties in more than one State
shall be subject to income tax in any State other than--
(1) the State of the employee's residence; and
(2) the State within which the employee is present and
performing employment duties for more than 30 days during the
calendar year in which the wages or other remuneration is
earned.
(b) Wages or Other Remuneration.--Wages or other remuneration
earned in any calendar year shall not be subject to State income tax
withholding and reporting requirements unless the employee is subject
to income tax in such State under subsection (a). Income tax
withholding and reporting requirements under subsection (a)(2) shall
apply to wages or other remuneration earned as of the commencement date
of employment duties in the State during the calendar year.
(c) Operating Rules.--For purposes of determining penalties related
to an employer's State income tax withholding and reporting
requirements--
(1) an employer may rely on an employee's annual
determination of the time expected to be spent by such employee
in the States in which the employee will perform duties
absent--
(A) the employer's actual knowledge of fraud by the
employee in making the determination; or
(B) collusion between the employer and the employee
to evade tax;
(2) except as provided in paragraph (3), if records are
maintained by an employer in the regular course of business
that record the location of an employee, such records shall not
preclude an employer's ability to rely on an employee's
determination under paragraph (1); and
(3) notwithstanding paragraph (2), if an employer, at its
sole discretion, maintains a time and attendance system that
tracks where the employee performs duties on a daily basis,
data from the time and attendance system shall be used instead
of the employee's determination under paragraph (1).
(d) Definitions and Special Rules.--For purposes of this Act:
(1) Day.--
(A) Except as provided in subparagraph (B), an
employee is considered present and performing
employment duties within a State for a day if the
employee performs more of the employee's employment
duties within such State than in any other State during
a day.
(B) If an employee performs employment duties in a
resident State and in only one nonresident State during
one day, such employee shall be considered to have
performed more of the employee's employment duties in
the nonresident State than in the resident State for
such day.
(C) For purposes of this paragraph, the portion of
the day during which the employee is in transit shall
not be considered in determining the location of an
employee's performance of employment duties.
(2) Employee.--The term ``employee'' has the same meaning
given to it by the State in which the employment duties are
performed, except that the term ``employee'' shall not include
a professional athlete, professional entertainer, qualified
production employee, or certain public figures.
(3) Professional athlete.--The term ``professional
athlete'' means a person who performs services in a
professional athletic event, provided that the wages or other
remuneration are paid to such person for performing services in
his or her capacity as a professional athlete.
(4) Professional entertainer.--The term ``professional
entertainer'' means a person of prominence who performs
services in the professional performing arts for wages or other
remuneration on a per-event basis, provided that the wages or
other remuneration are paid to such person for performing
services in his or her capacity as a professional entertainer.
(5) Qualified production employee.--The term ``qualified
production employee'' means a person who performs production
services of any nature directly in connection with a State
qualified, certified or approved film, television or other
commercial video production for wages or other remuneration,
provided that the wages or other remuneration paid to such
person are qualified production costs or expenditures under
such State's qualified, certified or approved film incentive
program, and that such wages or other remuneration must be
subject to withholding under such film incentive program as a
condition to treating such wages or other remuneration as a
qualified production cost or expenditure.
(6) Certain public figures.--The term ``certain public
figures'' means persons of prominence who perform services for
wages or other remuneration on a per-event basis, provided that
the wages or other remuneration are paid to such person for
services provided at a discrete event, in the nature of a
speech, public appearance, or similar event.
(7) Employer.--The term ``employer'' has the meaning given
such term in section 3401(d) of the Internal Revenue Code of
1986 (26 U.S.C. 3401(d)), unless such term is defined by the
State in which the employee's employment duties are performed,
in which case the State's definition shall prevail.
(8) State.--The term ``State'' means any of the several
States.
(9) Time and attendance system.--The term ``time and
attendance system'' means a system in which--
(A) the employee is required on a contemporaneous
basis to record his work location for every day worked
outside of the State in which the employee's employment
duties are primarily performed; and
(B) the system is designed to allow the employer to
allocate the employee's wages for income tax purposes
among all States in which the employee performs
employment duties for such employer.
(10) Wages or other remuneration.--The term ``wages or
other remuneration'' may be limited by the State in which the
employment duties are performed.
SEC. 3. EFFECTIVE DATE; APPLICABILITY.
(a) Effective Date.--This Act shall take effect on January 1 of the
second calendar year that begins after the date of the enactment of
this Act.
(b) Applicability.--This Act shall not apply to any tax obligation
that accrues before the effective date of this Act.
<all>
Introduced in Senate
Read twice and referred to the Committee on Finance.
Llama 3.2 · runs locally in your browser
Ask anything about this bill. The AI reads the full text to answer.
Enter to send · Shift+Enter for new line