A bill relating to withholding by the United States of certain taxes imposed by States, and political subdivisions thereof, in the case of Federal employees.

Provides that when a statute or ordinance of a State or any political subdivision thereof: (1) provides for the collection of a tax by imposing on employers generally the duty of withholding sums from the pay of employees and making returns of the sums to the State or political subdivision; and (2) imposes the duty to withhold generally with respect to the pay of employees who are residents of the State or political subdivision; the Secretary of the Treasury, under regulations prescribed by the President, shall enter into an agreement with the State or political subdivision within one hundred and twenty days of a request for agreement from the proper official of the State or political subdivision. Requires that the agreement shall provide that the head of each agency of the United States shall comply with the requirements of the withholding statute in the case of employees of the agency who are subject to the tax and whose regular place of Federal employment is within the State or political subdivision with which the agreement is made. Requires that the agreement may not apply to pay for service as a member of the Armed Forces.

States that this Act does not give the consent of the United States to the application of a statute which imposes more burdensome requirements on the United States than on other employers, or which subjects the United Sates or its employees to a penalty or liability because of this Act. Prohibits an agency of the United States from accepting pay from a State or political subdivision for services performed in withholding income taxes from the pay of the employees of the agency.