I 

109TH CONGRESS 

1ST SESSION H. R. 2558

To amend title 4 of the United States Code to prohibit the double taxation 

of telecommuters and others who work at home. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 23, 2005

Mr. SHAYS (for himself, Ms. DELAURO, and Mr. TOM DAVIS of Virginia) introduced the following bill; which was referred to the Committee on the 

Judiciary 

A BILL

To amend title 4 of the United States Code to prohibit 

the double taxation of telecommuters and others who 

work at home.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Telecommuter Tax 

5 Fairness Act of 2005’’. 
2

•HR 2558 IH 

1 SEC. 2. PROHIBITION ON DOUBLE TAXATION OF TELECOM2 MUTERS. 

3 (a) IN GENERAL.—Chapter 4 of title 4, United 

4 States Code, is amended by adding at the end the fol5 lowing new section: 

6 ‘‘§ 127. Prohibition on double taxation of telecom7 muters and others who work at home 

8 ‘‘(a) PHYSICAL PRESENCE REQUIRED.—

9 ‘‘(1) IN GENERAL.—In applying its income tax 

10 laws to the salary of a nonresident individual, a 

11 State may only deem such nonresident individual to 

12 be present in or working in such State for any pe13 riod of time if such nonresident individual is phys14 ically present in such State for such period and such 

15 State may not impose nonresident income taxes on 

16 such salary with respect to any period of time when 

17 such nonresident individual is physically present in 

18 another State. 

19 ‘‘(2) DETERMINATION OF PHYSICAL PRES20 ENCE.—For purposes of determining physical pres21 ence, no State may deem a nonresident individual to 

22 be present in or working in such State on the 

23 grounds that such nonresident individual is present 

24 at or working at home for the nonresident individ25 ual’s convenience. 

26 ‘‘(b) DEFINITIONS.—As used in this section—
3

•HR 2558 IH 

1 ‘‘(1) STATE.—The term ‘State’ includes any po2 litical subdivision of a State, the District of Colum3 bia, and the possessions of the United States. 

4 ‘‘(2) INCOME TAX.—The term ‘income tax’ has 

5 the meaning given such term by section 110(c). 

6 ‘‘(3) INCOME TAX LAWS.—The term ‘income 

7 tax laws’ includes any statutes, regulations, adminis8 trative practices, administrative interpretations, and 

9 judicial decisions. 

10 ‘‘(4) NONRESIDENT INDIVIDUAL.—The term 

11 ‘nonresident individual’ means an individual who is 

12 not a resident of the State applying its income tax 

13 laws to such individual. 

14 ‘‘(5) SALARY.—The term ‘salary’ means the 

15 compensation, wages, or other remuneration earned 

16 by an individual for personal services performed as 

17 an employee or as an independent contractor. 

18 ‘‘(c) NO INFERENCE.—Nothing in this section shall 

19 be construed as bearing on—

20 ‘‘(1) any tax laws other than income tax laws, 

21 ‘‘(2) the taxation of corporations, partnerships, 

22 trusts, estates, limited liability companies, or other 

23 entities, organizations, or persons other than non24 resident individuals in their capacities as employees 

25 or independent contractors, 
4

•HR 2558 IH 

1 ‘‘(3) the taxation of individuals in their capac2 ities as shareholders, partners, trust and estate 

3 beneficiaries, members or managers of limited liabil4 ity companies, or in any similar capacities, and 

5 ‘‘(4) the income taxation of dividends, interest, 

6 annuities, rents, royalties, or other forms of un7 earned income.’’. 

8 (b) CLERICAL AMENDMENT.—The table of sections 

9 of such chapter 4 is amended by adding at the end the 

10 following new item:

‘‘127. Prohibition on double taxation of telecommuters and others who work at 

home.’’.

11 (c) EFFECTIVE DATE.—The amendments made by 

12 this section shall take effect on the date of enactment of 

13 this Act.

Æ