19–006 

112TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 112–386 

MOBILE WORKFORCE STATE INCOME TAX 

SIMPLIFICATION ACT OF 2011 

FEBRUARY 3, 2012.—Committed to the Committee of the Whole House on the State 

of the Union and ordered to be printed 

Mr. SMITH of Texas, from the Committee on the Judiciary, 

submitted the following 

R E P O R T 

together with 

DISSENTING VIEWS 

[To accompany H.R. 1864] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on the Judiciary, to whom was referred the bill 

(H.R. 1864) to limit the authority of States to tax certain income 

of employees for employment duties performed in other States, having considered the same, report favorably thereon with an amendment and recommend that the bill as amended do pass. 

CONTENTS 

Page 

The Amendment ...................................................................................................... 2 

Purpose and Summary ............................................................................................ 3 

Background and Need for the Legislation ............................................................. 3 

Hearings ................................................................................................................... 6 

Committee Consideration ........................................................................................ 6 

Committee Votes ...................................................................................................... 6 

Committee Oversight Findings ............................................................................... 6 

New Budget Authority and Tax Expenditures ...................................................... 7 

Congressional Budget Office Cost Estimate .......................................................... 7 

Performance Goals and Objectives ......................................................................... 8 

Advisory on Earmarks ............................................................................................. 8 

Section-by-Section Analysis .................................................................................... 8 

Dissenting Views ..................................................................................................... 11 


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The Amendment 

The amendment is as follows: 

Strike all after the enacting clause and insert the following: 

SECTION 1. SHORT TITLE. 

This Act may be cited as the ‘‘Mobile Workforce State Income Tax Simplification 

Act of 2011’’. 

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 an employer’s State income 

tax withholding and reporting requirements— 

(1) an employer may rely on an employee’s 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, 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 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) 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 


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1Mobile Workforce State Income Tax Simplification Act of 2011, H.R. 1864, § 2, 112th Cong. 

(2011). 2 U.S. CONST. art. I, § 8, cl. 3; U.S. v. Lopez, 514 U.S. 549, 559 (1995). 3See Gibbons v. Ogden, 22 U.S. (9 Wheat.) 1 (1824) (invalidating state’s grant of monopoly 

to steamship operator that prevented holders of Federal steamship licenses from navigating 

state waterways); ERWIN CHEMERINSKY, CONSTITUTIONAL LAW: PRINCIPLES AND POLICIES § 5.3

(2d ed. 2002). 

4 CHEMERINSKY, supra note 3, at § 5.3.4. 

such person for services provided at a discrete event, in the nature of a speech, 

public appearance, or similar event. 

(6) 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. 

(7) STATE.—The term ‘‘State’’ means any of the several States. 

(8) 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 preformed; and 

(B) the employer uses this data to allocate the employee’s wages for income tax purposes among all States in which the employee performs employment duties for such employer. 

(9) 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 2d 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. 

Purpose and Summary 

The Mobile Workforce State Income Tax Simplification Act of 

2011 establishes uniform rules for the application of states’ income 

tax laws to employees who perform employment duties in a state 

but do not reside there. Under the bill, an employee is not responsible to pay income tax to, nor an employer required to withhold 

and remit income tax on behalf of, a state in which the employee 

has earned wages for 30 days or fewer during a calendar year.1

Background and Need for the Legislation 

The Constitution grants Congress the exclusive power to enact 

legislation concerning matters that have a ‘‘substantial effect’’ on 

interstate commerce.2 The Supreme Court has inferred from this 

grant of power that state and local laws are unconstitutional if 

they place an undue burden on interstate commerce—a principle 

commonly known as the ‘‘dormant’’ commerce clause.3 ‘‘The framers 

were most concerned about stopping protectionist state legislation 

where a state would discriminate against out-of-staters to benefit 

its citizens at the expense of out-of-staters.’’ 4

As sovereign governments, states are generally free to set their 

own income tax policy, but they must do so in a way that does not 

place a substantial burden on interstate commerce. As the American workforce is increasingly mobile, Congress has a constitutional 

duty to ensure that the disparity among states’ income tax policies 

does not stifle interstate economic activity. Forty-one states currently impose a personal income tax on income earned within their 


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5For a compilation of current state income tax rates, see TAX FOUNDATION, STATE INDIVIDUAL

INCOME TAX RATES, 2000–2011, available at http://www.taxfoundation.org/taxdata/show/228.html. 

Note that New Hampshire and Tennessee tax only unearned income, e.g. income from dividends 

and interest, bringing the number of states that tax earned income to 41. 6Mobile Workforce State Income Tax Simplification Act of 2007: Hearing on H.R. 3359 Before 

Subcomm. on Commercial & Admin. Law of the H. Comm. on the Judiciary, 110th Cong. (2007), 

at 16 (statement of Douglas L. Lindholm, President and Executive Director, Council on State 

Taxation) [hereinafter 2007 Hearing]. 

borders regardless of whether the earner is a resident of the state.5

In each of those states, not only must a nonresident employee pay 

tax after performing work for a certain amount of time or earning 

wages in the state, but the employee’s employer must withhold 

that state’s income tax on behalf of the employee and remit it to 

the state at the end of the year. The question, then, is whether 

compliance with 41 different states’ income tax and withholding 

laws places a substantial burden on employees who cross state 

lines to do their job. 

Income tax and employer withholding laws vary significantly 

among jurisdictions. Some states require an employer to withhold 

income tax on the first day of the employee’s travel; others use a 

hybrid time-spent and dollars-earned test to trigger withholding. 

For example, in New York, a non-resident’s income tax liability is 

triggered the moment he or she earns wages in the state, but the 

employer’s withholding requirement is not triggered until the 14th 

day of wage-earning. A non-resident’s income tax liability to Idaho 

is triggered after he makes $1,000 in wages in the state. 

Employees are ultimately responsible to report their own income 

tax liability to a state. Thus in each nonresident income tax state 

where an employee earns wages, he is required to fill out and file 

a tax return. In the current system, each state sets its own de 

minimis threshold. Employees who conduct only transient business 

or earn below a certain amount of wages in the nonresident state 

need not file a return or pay taxes. The variation among state laws, 

however, means that an individual who is required to travel for 

work must track and comply with up to 41 different states’ income 

tax laws, including the preparation of numerous tax returns to 

nonresident states in many of which he may ultimately be entitled 

to a refund. This result may discourage employees who conclude 

that the burden of learning a nonresident state’s income tax laws 

and filing a return there outweighs the opportunity to travel to the 

state for a few days to conduct business. 

Furthermore, the complex patchwork of state income tax withholding laws creates an unnecessary administrative burden on 

small business employers—America’s job creators—who must comply with nonresident states’ withholding laws on account of wages 

their employees earn in the state.6 At a hearing this Congress, an 

accountant from West Virginia described the effect tracking 41 

states’ income tax rules has on small businesses: 

Businesses, including small businesses and family businesses, that operate interstate are subject to significant 

regulatory burden with regard to compliance with nonresident State income tax withholding laws. These administrative burdens take existing resources from operational 

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7Mobile Workforce State Income Tax Simplification Act of 2011: Hearing on H.R. 1864 Before 

Subcomm. on Courts, Commercial & Admin. Law of the H. Comm on the Judiciary, 112th Cong. 

(2011), at 13 (testimony of Jeffrey A. Porter, Owner, Porter & Associates, CPAs, on behalf of 

the American Institute of Certified Public Accountants). 8 2007 Hearing, supra note 6, at 29 (statement of Dee Nelson, Payroll Manager, Alutiiq, LLC 

and Subsidiaries, on behalf of American Payroll Association). 9Sarbanes-Oxley Act of 2002, Pub. L. 107–204, § 404, 116 Stat. 745, 789 (codified at 15 U.S.C. 

§ 7262) (2002). 10 2007 Hearing, supra note 6, at 10 (statement of Rep. Henry ‘‘Hank’’ Johnson). 11 2007 Hearing, supra note 6, at 71 (statement of Walter Hellerstein, Francis Shackelford 

Distinguished Professor of Taxation Law, University of Georgia School of Law). 12 H.R. 1864 § 2(a). 

tional administrative staff or outside experts in order to 

meet the demands of compliance.7

Similarly, in the 110th Congress, a representative of the American 

Payroll Association explained these administrative burdens: 

Even in the case of an employee who resides in one State 

and works throughout the year in another State, State and 

local tax withholding and reporting can be very complicated. The employer has to verify the employee’s State 

of residence, check whether the two States have a reciprocity agreement, analyze the tax laws of both States, 

and likely withhold tax for both States and prepare a form 

W-2 for both States.8

The resources a small business must devote to income tax withholding compliance is generally offset by raising prices on the cost 

of goods and services the business sells to consumers. 

Large businesses that employ thousands of people are also burdened by the cumulative effect of non-uniform state income tax 

laws. The Sarbanes-Oxley Act of 2002 requires management to sign 

off on the internal controls that ensure state tax compliance and 

requires auditors to certify management’s assessment.9 The diversity of state income tax laws means that large public companies 

and their auditors must invest a significant amount of time ensuring that the company has withheld correctly for each employee at 

great expense to the firm.10

The Mobile Workforce State Income Tax Simplification Act would 

substantially simplify state income tax law by imposing a uniform 

de minimis standard for nonresident taxation and employer withholding. It satisfies the advice of reputed tax professor Walter 

Hellerstein, who in 2007 urged Congress: 

I really do wish to make it clear that I believe the States 

have a legitimate interest in assuring that workers who 

earn income in the State pay their fair share of the State 

tax burdens for the benefits and protections that the State 

provides to them. But this legitimate interest has to be 

balanced against the burdens that are imposed on multistate enterprises and on the conduct of interstate commerce by uncertain, inconsistent, and unreasonable withholding obligations imposed by the State.11

The bill provides that an employee shall not be subject to income 

tax in a nonresident state unless he or she has worked for at least 

30 days in that jurisdiction.12 It further provides that an employer 


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13 Id. § 2(b). 

is not responsible for withholding on behalf of any employee who 

is not subject to tax under the Act.13

The Mobile Workforce State Income Tax Simplification Act is designed to simplify tax liability and withholding rules, not enable 

taxpayers to escape their duty to pay state governments their fair 

share. Consider an example. In 2010, Albert was a resident of Virginia and earned $50,000 total. Of that $50,000, $10,000 was 

earned when Albert traveled to New York for work and spent 13 

days there. Under current law, Albert owes income tax to New 

York but his employer did not withhold because New York’s 14-day 

withholding trigger was not met. Assume Albert pays $800 to New 

York in taxes. When Albert files his Virginia tax return, he will report that he receive a tax credit in the amount of $800 against his 

Virginia returns. If the bill were enacted, however, Albert would 

owe no tax to New York because he did not earn wages there for 

more than 30 days. So although Albert would not pay $800 to New 

York, neither would he receive an $800 credit on his Virginia taxes 

for taxes paid to other governments. In this way, the bill does not 

theoretically reduce any one state’s tax revenues—after all, for 

every Albert in Virginia who works temporarily in New York, there 

is an Albert in New York who works temporarily in Virginia—but 

simply provides clear rules for nonresident income taxation and reduces unnecessary paperwork for taxpayers and small businesses. 

Hearings 

The Committee on the Judiciary’s Subcommittee on Courts, Commercial and Administrative Law held a legislative hearing on H.R. 

1864 on May 24, 2011. Testimony was received from: Jeffrey A. 

Porter (Owner, Porter & Associates, CPAs); Patrick T. Carter (Director, Delaware Division of Revenue) on behalf of the Federation 

of Tax Administrators; and Joseph R. Crosby (Chief Operating Officer and Senior Director of Policy, Council on State Taxation). 

Committee Consideration 

On November 17, 2011, the Judiciary Committee met in open 

session and ordered the bill H.R. 1864 reported favorably to the 

House, with an amendment, by voice vote, a quorum being present. 

Committee Votes 

In compliance with clause 3(b) of rule XIII of the Rules of the 

House of Representatives, the Committee advises that there were 

no recorded votes during the Committee’s consideration of H.R. 

1864. 

Committee Oversight Findings 

In compliance with clause 3(c)(1) of rule XIII of the Rules of the 

House of Representatives, the Committee advises that the findings 

and recommendations of the Committee, based on oversight activities under clause 2(b)(1) of rule X of the Rules of the House of Representatives, are incorporated in the descriptive portions of this report. 


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New Budget Authority and Tax Expenditures 

Clause 3(c)(2) of rule XIII of the Rules of the House of Representatives is inapplicable because this legislation does not provide new 

budgetary authority or increased tax expenditures. 

Congressional Budget Office Cost Estimate 

In compliance with clause 3(c)(3) of rule XIII of the Rules of the 

House of Representatives, the Committee sets forth, with respect to 

the bill, H.R. 1864, the following estimate and comparison prepared 

by the Director of the Congressional Budget Office under section 

402 of the Congressional Budget Act of 1974: 

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, January 25, 2012. 

Hon. LAMAR SMITH, CHAIRMAN, 

Committee on the Judiciary, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 1864, the ‘‘Mobile Workforce State Income Tax Simplification Act of 2011.’’ 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Mark Grabowicz, who 

can be reached at 226-2860. 

Sincerely, 

DOUGLAS W. ELMENDORF, 

DIRECTOR. 

Enclosure 

cc: Honorable John Conyers, Jr. 

Ranking Member 

H.R. 1864—Mobile Workforce State Income Tax Simplification Act 

of 2011. 

As ordered reported by the House Committee on the Judiciary on 

November 17, 2011 

H.R. 1864 would limit the authority of States to tax the income 

of certain residents. CBO estimates that implementing the legislation would have no impact on the Federal budget. Enacting the bill 

would not affect direct spending or revenues, so pay-as-you-go procedures do not apply. 

H.R. 1864 would impose an intergovernmental mandate as defined in the Unfunded Mandates Reform Act (UMRA) by prohibiting States from taxing the income of employees who work in the 

State for fewer than 31 days. The prohibition would not apply to 

the income of professional athletes, entertainers, or public figures. 

UMRA includes in its definition of mandate costs any amounts that 

State governments would be prohibited from raising in revenues as 

a result of the mandate. The mandate costs of H.R. 1864 would include any taxes that State governments would be precluded from 

collecting under the bill. 


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Most States that levy a personal income tax allow residents to 

take a credit for income taxes that the residents pay to another 

State. The cost of the mandate would equal, for all States collectively, the difference between the amount of revenue that States receive from nonresidents who work in the State for fewer than 31 

days and the amount they would receive from residents whose 

credits would be lower under the bill. Generally, States that have 

large employment centers close to a State border would lose the 

most revenue; States from which employees tend to commute would 

gain revenue. For example, New York would likely lose the largest 

amount of revenue-from $50 million to $100 million according to 

State and industry estimates-and Illinois, Massachusetts, and California would face smaller losses. New Jersey and Connecticut 

would likely gain revenue. 

Because of uncertainty about the amount of revenue that States 

collect from nonresidents, and the amount they would receive from 

residents whose credits would be lower under the bill, CBO cannot 

estimate the net cost of the mandate. Consequently, CBO cannot 

determine whether the net cost of the intergovernmental mandate 

in the bill would exceed the annual threshold established in UMRA 

($73 million in 2012, adjusted annually for inflation). 

H.R. 1864 contains no private-sector mandates as defined in 

UMRA. 

The CBO staff contacts for this estimate are Mark Grabowicz (for 

Federal costs) and Elizabeth Cove Delisle (for intergovernmental 

impacts). The estimate was approved by Theresa Gullo, Deputy Assistant Director for Budget Analysis. 

Performance Goals and Objectives 

The Committee states that pursuant to clause 3(c)(4) of rule XIII 

of the Rules of the House of Representatives, H.R. 1864 will facilitate interstate commerce by increasing uniformity among states’ income tax policies. 

Advisory on Earmarks 

In accordance with clause 9 of rule XXI of the Rules of the House 

of Representatives, H.R. 1864 does not contain any congressional 

earmarks, limited tax benefits, or limited tariff benefits as defined 

in clause 9(e), 9(f), or 9(g) of Rule XXI. 

Section-by-Section Analysis 

Section 1. Short Title. 

States that the Act may be referred to as the ‘‘Mobile Workforce 

State Income Tax Simplification Act of 2011’’. 

Section 2. Limitations on State Withholding and Taxation of Employee Income. 

Provides that an employee is not subject to income tax except in 

the state in which he or she resides and a nonresident state in 

which he or she has performed work for at least 30 days. 

Provides that an employer is not responsible for withholding on 

behalf of an employee that is not subject to income tax under the 

Act. 


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Sets certain operating rules for determining where and for how 

long an employee performs work in a jurisdiction for purposes of 

the Act. 

Defines terms used in the Act. 

Section 3. Effective Date. 

Provides that the Act shall be effective on January 1 of the second year that begins after the date of the enactment of the Act. 


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1Mobile Workforce State Income Tax Simplification Act of 2011: Hearing on H.R. 1864 before 

the Subcomm. on Courts, Commercial and Admin. Law of the H. Comm. on the Judiciary, 112th 

Cong. 66 (2011) (written statement of Robert Melendres, Chief Legal Officer and Corporate Secretary for International Game Technology); id. at 70 (written statement of Nancy L. Miller, Assistant Treasurer of Unisys Corporation). 2 Id. at 2 (statement of Ranking Member Coble); id. at 60 (written statement of William Dunn, 

Senior Manager of Government Relations for the American Payroll Association). 3 Id. at 17 (written statement of Jeffrey A. Porter, speaking on behalf of the American Institute of Certified Public Accountants). 4State of New York—Department of Taxation and Finance, Income/Franchise Tax—District 

Office Audit Manual, Withholding Tax Field Audit Guidelines, at 24 (Sept. 17, 2004), available 

at http://www.bcnys.org/inside/tax/withholding.pdf. 

5Wis. Stat. § 71.64(6)(b) (2011). 

6Shaffer v. Carter, 252 U.S. 37, 52 (1920) (‘‘[J]ust as a State may impose general income taxes 

upon its own citizens and residents whose persons are subject to its control, it may, as a necessary consequence, levy a duty of like character, and not more onerous in its effect, upon incomes accruing to non-residents from their property or business within the State, or their occupations carried on therein.’’). 

Dissenting Views 

H.R. 1864, the ‘‘Mobile Workforce State Income Tax Simplification Act of 2011,’’ attempts to address a valid concern, but in so 

doing would lead to severe state revenue losses. Supporters of the 

legislation contend that a uniform threshold for when an employer 

must withhold state income tax will provide simplicity and be more 

administrable than the current varied state standards.1 While a 

uniform threshold would indeed provide more simplicity, the 30- 

day threshold in the reported bill is excessive. Without a simple fix 

to establish a more reasonable threshold we cannot support the reported bill. For this reason and others set forth below, we must respectfully dissent. 

H.R. 1864, the ‘‘Mobile Workforce State Income Tax Simplification Act of 2011,’’ seeks to address the differing standards that 

states use to impose income taxes on a non-resident. A total of 41 

states currently collect state income taxes 2 and each has established a threshold for when an earner must pay such taxes and 

when the employer must withhold. The thresholds generally fall 

into two categories at which employers must begin to withhold income for state tax purposes: a days threshold and an incomeearned threshold.3 For example, New York requires withholding 

after an individual has worked 14 days within the state 4 while 

Wisconsin requires withholding once the employee has earned at 

least $1,500 within the state.5

In an ever-increasing mobile U.S. workforce, employees may 

work in several states throughout the year. As a result, these employees may incur state income tax obligations in more than just 

their resident state. An employee is obligated to pay state income 

taxes to the state where income is earned or where the services 

giving rise to the income are performed.6 Although an employee’s 

resident state may tax all income regardless of where the income 


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7See New York ex rel. Cohn v. Graves, 300 U.S. 308 (1937); Lawrence v. State Tax Comm’n, 

286 U.S. 276 (1932) (holding that the state has unrestricted power to tax citizens’ net income 

even if activities are carried on outside of the state). An employee’s state of residence provides 

a credit for any income taxes paid to other states. See State Tax Guide (CCH) at 15–110 (chart) 

(1997) (illustrating that nearly all states with a broad-based personal income tax have enacted 

tax credits for income taxes paid to other states). 8 Hearing on H.R. 1864 at 16–18. 9 Id. at 2 (statement of Ranking Member Coble); id. at 35 (written statement of Joseph R. 

Crosby, COO and Senior Policy Director for the Council on State Taxation). 10 H.R. 1864, § 2(a)(2). 11 H.R. 1864, § 2(d)(2) (high-income individuals are excluded from the definition of ‘‘employee’’ 

and therefore the 30-day threshold would not apply to them). 12Mobile Workforce State Income Tax Simplification Act of 2011: Markup of H.R. 1864 before 

the H. Comm. on the Judiciary, 112th Cong. 94 (November 17, 2011) (statement of Representative Jerrold Nadler). 13 Elizabeth McNichol, et al., Center on Budget and Policy Priorities, States Continue to Feel 

Recession’s Impact, Jan. 9, 2012, available at http://www.cbpp.org/files/9-8-08sfp.pdf. 14 Congressional Budget Office Cost Estimate, H.R. 1864: Mobile Workforce State Income Tax 

Simplification Act of 2011 (Jan. 25, 2012). 15Letter from Thomas H. Mattox, Commissioner of Department of Taxation and Finance, 

State of New York, to Representative Lamar Smith, Chairman of the House Committee on the 

Judiciary, and Representative John Conyers, Ranking Member of the House Committee on the 

Judiciary (Feb. 2, 2012) (on file with the House of Representative’s Committee on the Judiciary, 

Democratic Staff). In his letter, Commissioner Mattox details how his office calculated that figure: 

Our estimate is constructed through a simulation of actual New York State nonresident 

tax returns from tax year 2009. Nonresident wages, the base of the estimate, are grown 

to tax year 2013 using the most recent forecast from the New York State Division of 

the Budget. We also build in a behavioral assumption regarding the actions likely to 

be taken by some nonresidents to stay below the 30-day threshold. Finally, the estimate 

is earned, the resident state typically provides a credit for any income taxes paid to other states.7

Supporters of H.R. 1864 contend that these differing thresholds 

have caused burdensome compliance and paperwork requirements.8

Others assert that the differing thresholds challenge many employees who must travel for work.9 An employee who has met a threshold in another state but was not aware of that threshold is still liable for the taxes owed. Accordingly, H.R. 1864 would prevent a 

state from imposing income taxes on non-residents who work 30 

days or less within a calendar year in the state.10 The 30-day 

threshold would not apply, however, to certain high-income individuals (e.g., professional athletes, entertainers, and certain public figures), although they would still be subject to current state thresholds.11

The solution that H.R. 1864 proffers unfortunately goes too far 

and will consequently lead to severe state revenue losses. Specifically, the 30-day threshold would allow a non-resident employee to 

work six complete business weeks (or more than ten percent of the 

year) in another state and avoid an obligation to pay income taxes 

to that state.12 The loss of state income tax revenue will further 

exacerbate budget shortfalls in many states. Indeed, 29 states have 

already projected or addressed budget shortfalls totaling $44 billion 

for fiscal year 2013.13 States could be forced to address their increased shortfalls by shifting the tax burden onto local taxpayers 

through increased property, income, and sales taxes, or by cutting 

governmental services. 

The Congressional Budget Office (CBO) estimates that the 30- 

day threshold imposed by H.R. 1864 will lead to revenue losses for 

California, Illinois, and Massachusetts, and a significant revenue 

loss for New York,14 which itself estimates that its actual revenue 

loss would be between $95 million and $115 million starting in 

2013.15 Of note, ‘‘[t]his revenue loss is greater than the revenue imVerDate Mar 15 2010 01:43 Feb 04, 2012 Jkt 019006 PO 00000 Frm 00012 Fmt 6601 Sfmt 5602 E:\HR\OC\HR386.XXX HR386

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includes an offset for the reduction in the resident credit New York provides to its residents who work out-of-state. 16 Id. 17 According to statistics from the National Education Association, $115 million would support 

the annual salaries of 1,605 teachers paid at the average annual salary of $71,633 in New York. 

National Education Association, Rankings of the States 2010 and Estimates of School Statistics 

2011, at 19, available at http://www.nea.org/assets/docs/HE/NEAlRankingslandl 

Estimates010711.pdf. 18This amount would support the annual salaries of 1,915 fire fighters paid at the average 

annual salary of $60,040 in New York. Bureau of Labor Statistics, Occupational Employment 

Statistics, Occupational Employment and Wages, 2010, available at http://www.bls.gov/oes/current/oes332011.htm. 19General Letter from the American Federation of State, County and Municipal Employees 

(AFSCME), American Federation of Teachers (AFT), Department of Professional Employees, 

AFL–CIO, International Association of Fire Fighters (IAFF), International Federation of Professional and Technical Engineers (IFPTE), National Education Association (NEA), Service Employees International Union (SEIU) (November 29, 2011); Letter from Patrick T. Carter, President of the Federation of Tax Administrators, to Member of the Committee on the Judiciary (November 16, 2011); Letter from Joe Huddleston, Executive Director of the Multistate Tax Commission, to Representative Howard Coble, Chairman of the Subcommittee on Courts, Commercial and Administrative Law of the House Committee on the Judiciary, and Representative 

Steve Cohen, Ranking Member of the Subcommittee on Courts, Commercial and Administrative 

Law of the House Committee on the Judiciary (Nov. 15, 2011) (on file with the House of Representatives Committee on the Judiciary, Democratic Staff). 20Multistate Tax Commission Model Mobile Workforce Statute, available at http:// 

www.mtc.gov/uploadedFiles/MultistatelTaxlCommission/Uniformity/IncomelFranchise/MWF 

%20Ex%20Com%20Memo%202-28-11.pdf. 

pact on all other states combined.’’ 16 For perspective, $115 million 

would pay the salaries for more than 1,600 teachers 17 or more 

than 1,900 fire fighters in New York.18

Several prominent organizations oppose H.R. 1864 for these and 

other reasons. These organizations include the American Federation of State, County and Municipal Employees, the American Federation of Teachers, the Department of Professional Employees, 

AFL–CIO, the International Association of Fire Fighters, the International Federation of Professional and Technical Engineers, the 

National Education Association, the Service Employees International Union, the Federation of Tax Administrators, and the 

Multistate Tax Commission.19

We cannot support legislation that will cause states to incur severe revenue losses, particularly in these difficult economic times 

and especially when a simple change to the legislation would lessen 

the impact on state revenues. H.R. 1864 could be substantially improved if a more reasonable threshold was established such as 14 

days. Alternatively, the legislation could be made to conform with 

the Multistate Tax Commission’s model statute, which would establish a 20-day threshold.20 A lower threshold would ensure uniformity without severely impacting state revenues. 

While H.R. 1864 is a step toward addressing a valid concern, we 

cannot support this legislation unless the bill’s threshold period is 

modified to lessen its revenue impact on the states. 

JOHN CONYERS, JR. 

JERROLD NADLER. 

Æ 


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