II 

115TH CONGRESS 

1ST SESSION S. 540 

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 

MARCH 7, 2017 

Mr. THUNE (for himself, Mr. BROWN, Mr. ROBERTS, Mr. BLUNT, Mr. 

BLUMENTHAL, Mr. TILLIS, Mr. BOOKER, Mr. PERDUE, Mr. REED, Mr. 

HOEVEN, Ms. STABENOW, Mr. BARRASSO, Mrs. MURRAY, Mr. HELLER, 

Mrs. ERNST, Mr. DONNELLY, Mr. ISAKSON, Ms. HASSAN, and Mr. BOOZMAN) 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. 

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 ‘‘Mobile Workforce 

5 State Income Tax Simplification Act of 2017’’. 


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1 SEC. 2. LIMITATIONS ON STATE WITHHOLDING AND TAX2 ATION OF EMPLOYEE INCOME. 

3 (a) IN GENERAL.—No part of the wages or other re4 muneration earned by an employee who performs employ5 ment duties in more than one State shall be subject to 

6 income tax in any State other than— 

7 (1) the State of the employee’s residence; and 

8 (2) the State within which the employee is 

9 present and performing employment duties for more 

10 than 30 days during the calendar year in which the 

11 wages or other remuneration is earned. 

12 (b) WAGES OR OTHER REMUNERATION.—Wages or 

13 other remuneration earned in any calendar year shall not 

14 be subject to State income tax withholding and reporting 

15 requirements unless the employee is subject to income tax 

16 in such State under subsection (a). Income tax with17 holding and reporting requirements under subsection 

18 (a)(2) shall apply to wages or other remuneration earned 

19 as of the commencement date of employment duties in the 

20 State during the calendar year. 

21 (c) OPERATING RULES.—For purposes of deter22 mining penalties related to an employer’s State income tax 

23 withholding and reporting requirements— 

24 (1) an employer may rely on an employee’s an25 nual determination of the time expected to be spent 


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1 by such employee in the States in which the em2 ployee will perform duties absent— 

3 (A) the employer’s actual knowledge of 

4 fraud by the employee in making the determina5 tion; or 

6 (B) collusion between the employer and the 

7 employee to evade tax; 

8 (2) except as provided in paragraph (3), if 

9 records are maintained by an employer in the reg10 ular course of business that record the location of an 

11 employee, such records shall not preclude an employ12 er’s ability to rely on an employee’s determination 

13 under paragraph (1); and 

14 (3) notwithstanding paragraph (2), if an em15 ployer, at its sole discretion, maintains a time and 

16 attendance system that tracks where the employee 

17 performs duties on a daily basis, data from the time 

18 and attendance system shall be used instead of the 

19 employee’s determination under paragraph (1). 

20 (d) DEFINITIONS AND SPECIAL RULES.—For pur21 poses of this Act: 

22 (1) DAY.— 

23 (A) Except as provided in subparagraph 

24 (B), an employee is considered present and per25 forming employment duties within a State for a 


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1 day if the employee performs more of the em2 ployee’s employment duties within such State 

3 than in any other State during a day. 

4 (B) If an employee performs employment 

5 duties in a resident State and in only one non6 resident State during one day, such employee 

7 shall be considered to have performed more of 

8 the employee’s employment duties in the non9 resident State than in the resident State for 

10 such day. 

11 (C) For purposes of this paragraph, the 

12 portion of the day during which the employee is 

13 in transit shall not be considered in determining 

14 the location of an employee’s performance of 

15 employment duties. 

16 (2) EMPLOYEE.—The term ‘‘employee’’ has the 

17 same meaning given to it by the State in which the 

18 employment duties are performed, except that the 

19 term ‘‘employee’’ shall not include a professional 

20 athlete, professional entertainer, qualified production 

21 employee, or certain public figures. 

22 (3) PROFESSIONAL ATHLETE.—The term ‘‘pro23 fessional athlete’’ means a person who performs 

24 services in a professional athletic event, provided 

25 that the wages or other remuneration are paid to 


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1 such person for performing services in his or her ca2 pacity as a professional athlete. 

3 (4) PROFESSIONAL ENTERTAINER.—The term 

4 ‘‘professional entertainer’’ means a person of promi5 nence who performs services in the professional per6 forming arts for wages or other remuneration on a 

7 per-event basis, provided that the wages or other re8 muneration are paid to such person for performing 

9 services in his or her capacity as a professional en10 tertainer. 

11 (5) QUALIFIED PRODUCTION EMPLOYEE.—The 

12 term ‘‘qualified production employee’’ means a per13 son who performs production services of any nature 

14 directly in connection with a State qualified, cer15 tified or approved film, television or other commer16 cial video production for wages or other remunera17 tion, provided that the wages or other remuneration 

18 paid to such person are qualified production costs or 

19 expenditures under such State’s qualified, certified 

20 or approved film incentive program, and that such 

21 wages or other remuneration must be subject to 

22 withholding under such film incentive program as a 

23 condition to treating such wages or other remunera24 tion as a qualified production cost or expenditure. 


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1 (6) CERTAIN PUBLIC FIGURES.—The term 

2 ‘‘certain public figures’’ means persons of promi3 nence who perform services for wages or other remu4 neration on a per-event basis, provided that the 

5 wages or other remuneration are paid to such person 

6 for services provided at a discrete event, in the na7 ture of a speech, public appearance, or similar event. 

8 (7) EMPLOYER.—The term ‘‘employer’’ has the 

9 meaning given such term in section 3401(d) of the 

10 Internal Revenue Code of 1986 (26 U.S.C. 3401(d)), 

11 unless such term is defined by the State in which 

12 the employee’s employment duties are performed, in 

13 which case the State’s definition shall prevail. 

14 (8) STATE.—The term ‘‘State’’ means any of 

15 the several States. 

16 (9) TIME AND ATTENDANCE SYSTEM.—The 

17 term ‘‘time and attendance system’’ means a system 

18 in which— 

19 (A) the employee is required on a contem20 poraneous basis to record his work location for 

21 every day worked outside of the State in which 

22 the employee’s employment duties are primarily 

23 performed; and 

24 (B) the system is designed to allow the em25 ployer to allocate the employee’s wages for inVerDate Sep 11 2014 03:48 Mar 10, 2017 Jkt 069200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S540.IS S540

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1 come tax purposes among all States in which 

2 the employee performs employment duties for 

3 such employer. 

4 (10) WAGES OR OTHER REMUNERATION.—The 

5 term ‘‘wages or other remuneration’’ may be limited 

6 by the State in which the employment duties are 

7 performed. 

8 SEC. 3. EFFECTIVE DATE; APPLICABILITY. 

9 (a) EFFECTIVE DATE.—This Act shall take effect on 

10 January 1 of the second calendar year that begins after 

11 the date of the enactment of this Act. 

12 (b) APPLICABILITY.—This Act shall not apply to any 

13 tax obligation that accrues before the effective date of this 

14 Act. 

Æ 


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