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MOBILE WORKFORCE STATE INCOME TAX 

SIMPLIFICATION ACT OF 2013 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

REGULATORY REFORM, 

COMMERCIAL AND ANTITRUST LAW 

OF THE

COMMITTEE ON THE JUDICIARY 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

SECOND SESSION 

ON

H.R. 1129 

APRIL 29, 2014 

Serial No. 113–91 

Printed for the use of the Committee on the Judiciary 

( 

Available via the World Wide Web: http://judiciary.house.gov 
(II) 

COMMITTEE ON THE JUDICIARY 

BOB GOODLATTE, Virginia, Chairman 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

HOWARD COBLE, North Carolina 

LAMAR SMITH, Texas 

STEVE CHABOT, Ohio 

SPENCER BACHUS, Alabama 

DARRELL E. ISSA, California 

J. RANDY FORBES, Virginia 

STEVE KING, Iowa 

TRENT FRANKS, Arizona 

LOUIE GOHMERT, Texas 

JIM JORDAN, Ohio 

TED POE, Texas 

JASON CHAFFETZ, Utah 

TOM MARINO, Pennsylvania 

TREY GOWDY, South Carolina 

RAU ́ L LABRADOR, Idaho 

BLAKE FARENTHOLD, Texas 

GEORGE HOLDING, North Carolina 

DOUG COLLINS, Georgia 

RON DeSANTIS, Florida 

JASON T. SMITH, Missouri 

[Vacant] 

JOHN CONYERS, JR., Michigan 

JERROLD NADLER, New York 

ROBERT C. ‘‘BOBBY’’ SCOTT, Virginia 

ZOE LOFGREN, California 

SHEILA JACKSON LEE, Texas 

STEVE COHEN, Tennessee 

HENRY C. ‘‘HANK’’ JOHNSON, JR., 

Georgia 

PEDRO R. PIERLUISI, Puerto Rico 

JUDY CHU, California 

TED DEUTCH, Florida 

LUIS V. GUTIERREZ, Illinois 

KAREN BASS, California 

CEDRIC RICHMOND, Louisiana 

SUZAN DelBENE, Washington 

JOE GARCIA, Florida 

HAKEEM JEFFRIES, New York 

DAVID N. CICILLINE, Rhode Island 

SHELLEY HUSBAND, Chief of Staff & General Counsel 

PERRY APELBAUM, Minority Staff Director & Chief Counsel 

SUBCOMMITTEE ON REGULATORY REFORM, COMMERCIAL AND ANTITRUST LAW

SPENCER BACHUS, Alabama, Chairman 

BLAKE FARENTHOLD, Texas, Vice-Chairman 

DARRELL E. ISSA, California 

TOM MARINO, Pennsylvania 

GEORGE HOLDING, North Carolina 

DOUG COLLINS, Georgia 

JASON T. SMITH, Missouri 

HENRY C. ‘‘HANK’’ JOHNSON, JR., 

Georgia 

SUZAN DelBENE, Washington 

JOE GARCIA, Florida 

HAKEEM JEFFRIES, New York 

DAVID N. CICILLINE, Rhode Island 

DANIEL FLORES, Chief Counsel 
(III) 

C O N T E N T S 

APRIL 29, 2014 

Page 

THE BILL 

H.R. 1129, the ‘‘Mobile Workforce State Income Tax Simplification Act of 

2013’’ ..................................................................................................................... 3 

OPENING STATEMENTS 

The Honorable Spencer Bachus, a Representative in Congress from the State 

of Alabama, and Chairman, Subcommittee on Regulatory Reform, Commercial and Antitrust Law ........................................................................................ 1 

The Honorable David N. Cicilline, a Representative in Congress from the 

State of Rhode Island, and Member, Subcommittee on Regulatory Reform, 

Commercial and Antitrust Law .......................................................................... 9 

The Honorable Bob Goodlatte, a Representative in Congress from the State 

of Virginia, and Member, Subcommittee on Regulatory Reform, Commercial 

and Antitrust Law ............................................................................................... 9 

The Honorable Henry C. ‘‘Hank’’ Johnson, Jr., a Representative in Congress 

from the State of Tennessee, and Ranking Member, Subcommittee on Regulatory Reform, Commercial and Antitrust Law ................................................. 10 

WITNESSES 

Maureen B. Riehl, Esq., Vice President, Government Affairs, Council on State 

Taxation (COST), on behalf of COST and the Mobile Workforce Coalition 

Oral Testimony ..................................................................................................... 12 

Prepared Statement ............................................................................................. 14 

Jeffrey A. Porter, CPA, Founder and Owner of Porter & Associates, on behalf 

of the American Institute of Certified Public Accountants 

Oral Testimony ..................................................................................................... 31 

Prepared Statement ............................................................................................. 33 

Lori Brown, CPP, Director of Disbursements, CACI International, Inc., on 

behalf of the American Payroll Association 

Oral Testimony ..................................................................................................... 40 

Prepared Statement ............................................................................................. 42 

Patrick Carter, Director, Division of Revenue for the State of Delaware, 

on behalf of the Federation of Tax Administrators 

Oral Testimony ..................................................................................................... 73 

Prepared Statement ............................................................................................. 75 

APPENDIX 

MATERIAL SUBMITTED FOR THE HEARING RECORD

Prepared Statement of the Honorable John Conyers, Jr., a Representative 

in Congress from the State of Michigan ............................................................. 102 

Prepared Statement of the Honorable Jim Himes, a U.S. Senator from the 

State of Connecticut ............................................................................................. 107 

Prepared Statement of the Federation of Tax Administrators ............................ 109 

(1) 

MOBILE WORKFORCE STATE INCOME TAX 

SIMPLIFICATION ACT OF 2013 

TUESDAY, APRIL 29, 2014 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON REGULATORY REFORM, 

COMMERCIAL AND ANTITRUST LAW

COMMITTEE ON THE JUDICIARY, 

Washington, DC. 

The Subcommittee met, pursuant to call, at 1:08 p.m., in room 

2141, Rayburn House Office Building, the Honorable Spencer Bachus, (Chairman of the Subcommittee) presiding. 

Present: Representatives Bachus, Goodlatte, Marino, Collins, 

Johnson, DelBene, Garcia, Jeffries, and Cicilline. 

Staff Present: (Majority) Anthony Grossi, Counsel; Jaclyn Louis, 

Legislative Director for Rep. Marino; Ashley Lewis, Clerk; and (Minority) Norberto Salinas, Counsel. 

Mr. BACHUS. Good afternoon. The Subcommittee on Regulatory 

Reform, Commercial and Antitrust Law hearing will come to order. 

Without objection, the Chair is authorized to declare recesses of 

the Committee at any time. 

The focus of today’s hearing is the Mobile Workforce State Income Tax Simplification Act of 2013. The legislation institutes 

straightforward, commonsense rules for when a state may tax a 

non-resident employee. 

As the American workforce becomes increasingly mobile, there is 

a greater need to establish clear rules that define when employees 

trigger income tax liability and when employers should withhold 

these taxes. Without the uniform approach of a model workforce 

act, employees face the administrative burden of potentially filing 

an income tax return in every state they visit, even if only for 1 

day. 

According to the Federation of Tax Administrators, complying 

with the current system is difficult and probably impractical. The 

Mobile Workforce Act provides for a fair and easily administered 

system that ensures that states are paid the correct amount of 

taxes without unduly burdening our workforce. The Act’s simple 

system revolves around establishing a 30-day threshold before 

state income tax liability is triggered. In other words, employees 

may work in a state for up to 30 days without incurring an obligation to file an income tax return in that state. 
2 

Additionally, employers are not required to withhold income 

taxes until the 30-day threshold is reached. After an employee 

works in a state beyond the threshold, the state’s existing tax laws 

apply. 

The Mobile Workforce Act strikes a careful balance between preserving states’ ability to tax those who work within their borders 

and use their resources while ensuring that our nation’s workforce 

is not impeded by burdensome administrative obligations. This legislation has evolved since its original introduction in 2006 to account for concerns raised by state taxing authorities. Over this 

time period, the threshold was shortened from 60 days to 30 days, 

definitions were revised, and the effective date was delayed to 

allow for a smooth implementation. 

Furthermore, great care was taken to diminish the impact the 

Act would have on state revenues. An Ernst & Young study performed on substantially similar legislation last Congress found that 

the bill would result in a very small rise in revenue in some states 

and a tiny reduction in revenue in other states. In most states, the 

impact on revenues will be less than one-tenth of 1 percent, and 

in no state will it impact revenues more than seven-tenths of a percent. 

Of course, what these figures do not account for is the potential 

increase in other tax revenue from employees traveling to their 

states for conferences or meetings now that the specter of incurring 

an income tax filing obligation no longer exists. 

The Mobile Workforce Act is a bipartisan measure. It includes 

my predecessor, the Subcommittee Chair, Mr. Coble, and our current Ranking Member, Mr. Johnson, as its lead sponsors and advocates. The bill historically has enjoyed broad support, and identical 

legislation was passed by the full House by unanimous consent in 

2012. 

Today’s witnesses undoubtedly will add to the record in support 

of the bill, and I look forward to hearing their testimony. 

[The bill, H.R. 1129, follows:] 
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Mr. BACHUS. At this time, I will recognize Mr. Cicilline. 

Mr. CICILLINE. Thank you, Mr. Chairman. I look forward to hearing from the witnesses. I know Mr. Johnson is en route. 

Mr. BACHUS. Thank you. 

At this time, I will recognize the Chairman of the full Committee, Mr. Goodlatte, for an opening statement. 

Mr. GOODLATTE. Thank you, Mr. Chairman. I appreciate your 

holding this hearing. 

As it stands today, an employee who performs work in a nonresident state likely faces a myriad of disparate income tax laws. 

The complexity and variation of these state income tax laws places 

a significant burden on the American workforce. These burdens are 

most heavily felt by small businesses, which simply do not have the 

resources and can ill afford to focus their time on complying with 

over 40 different state tax regimes. Witnesses at two separate 

hearings before this Committee have testified that existing state 

income tax laws impose an undue burden on small businesses’ ability to deploy workforces across state lines. Small businesses do not 

shoulder this burden alone. Cumbersome and complex state income 

tax laws also put a strain on large companies. 

The Sarbanes-Oxley Act requires the management of these companies to sign off on internal controls that ensure they are in compliance with state tax laws. Further, Sarbanes-Oxley requires auditors to certify management’s assessment of companies’ compliance 

with these tax laws. Because state income tax laws are so diverse, 

large businesses and their auditors are required to invest a significant amount of time and money ensuring that companies have 

withheld correctly for each employee. 

Rather than expanding their payrolls or reducing the prices of 

goods for consumers, companies are forced to devote their resources 

to complying with complicated state income tax laws. The Constitution grants Congress the authority to enact laws to protect the free 

flow of commerce among the states. While Congress should exercise 

its authority with care and caution, the problem imposed by the 

complex array of existing state income tax laws deserves a Federal 

solution. 

The Mobile Workforce State Income Tax Simplification Act is a 

carefully crafted bill that creates a simple and easy-to-administer 

system for the imposition of state income tax laws. By creating a 

bright-line 30-day threshold to determine non-resident income tax 

liability, the bill ensures that employees will have a clear understanding of when they are liable for non-resident state income 

taxes, and employers will be able to accurately withhold these 

taxes. 

By reducing an obvious administrative burden, the Mobile Workforce Act will allow small businesses to focus their resources on 

growing their operations and allow larger businesses to focus on increasing their payrolls and reducing the prices of their goods. 

The Mobile Workforce Act enjoys broad bipartisan support, including from former Subcommittee Chairman Coble and current 

Subcommittee Ranking Member Johnson. I applaud their leadership on this issue during this and past Congresses. 

I also want to thank Chairman Bachus for holding today’s hearing to further develop the record supporting the Mobile Workforce 
10 

Act, and I look forward to hearing from our witnesses on this important measure. 

Thank you, Mr. Chairman, and I yield back. 

Mr. BACHUS. I thank you, Chairman. 

At this time, we have heard from Mr. Cicilline from Rhode Island, so at this time I recognize the Ranking Member from Georgia, Mr. Johnson, who is, as we referred to, one of the lead sponsors on this bill, along with Mr. Coble. 

Mr. JOHNSON. Thank you, Mr. Chairman. Let me apologize for 

being a tad late. Duty called elsewhere. But I want to thank you, 

Mr. Chairman, for bringing this bill before the Subcommittee for 

markup, and I also want to thank the Chairman of the full Committee for his support in this endeavor. 

The Mobile Workforce State Income Tax Simplification Act is an 

important bipartisan bill that will help workers across the country, 

and it will also help small and multi-state businesses. I am very 

familiar with this issue. I introduced this bill when I was a freshman in the 110th Congress, and again in the 111th Congress, and 

I am pleased to have introduced the bill in the last two Congresses 

with my colleague from North Carolina, Howard Coble. 

H.R. 1129 provides for a uniform and easily administrable law 

that will simplify the patchwork of existing inconsistent and confusing state rules. It would also reduce administrative costs to 

states and lessen compliance burdens on consumers. 

Take my home state of Georgia for an example. If an Atlantabased employee of a New York company travels to headquarters on 

a business trip once a year, that employee would be subject to New 

York income tax even if the annual visit only lasts a day. However, 

if that employee travels to Maine, her trip would only be subject 

to income tax if her trip lasts more than 10 days. If she travels to 

New Mexico on business, she would only be subject to tax if she 

was in the state for more than 15 days. 

The bill that Chairman Coble and I have introduced would address this inequity by establishing a uniform law that would ensure the correct amount of tax is withheld and paid to the states 

without the undue burden of the current system. H.R. 1129 would 

only subject employees who perform employment duties in a nonresident state if they work in that state for more than 30 calendar 

days. 

At a time when more and more Americans find themselves traveling for their job, this bill is a commonsense solution that helps 

workers who have to travel for work by simplifying their tax reporting requirements. Last Congress, this bill passed by a voice 

vote on the House floor. It would likely do so again today. So I urge 

that the Committee move this bill promptly so that it can come to 

the floor for a vote soon. This country’s employees and businesses 

deserve quick action. 

Thank you, Mr. Chairman, and I yield back the balance of my 

time. 

Mr. BACHUS. I thank the Ranking Member. 

We have a very distinguished panel today. I will start by first introducing our witnesses. 

Maureen Riehl is the Vice President of Government Affairs for 

the Council of State Taxation, or COST. Ms. Riehl is COST’s pri-
11 

mary link to both state and Federal election officials and is responsible for managing the day-to-day legislative agenda for COST, including working with her colleagues at state Chambers across the 

country. 

Prior to COST, Ms. Riehl was Vice President and Government 

Industrial Relations Counsel at the National Retail Federation for 

12 years. She was responsible for NRF’s national and multi-state 

strategy development and policy implementation for issues affecting retailers in the state. 

Prior to joining the National Retail Federation in 1999, she held 

various state government relations positions for the International 

Franchise Association, the Grocery Manufacturers Association, and 

a coalition of advertising associates. She was also Legislative Policy 

and Constituency Affairs Director in the state legislature for members of both the Michigan House of Representatives and Michigan 

Senate. 

She received her B.A. from Michigan State University and her 

J.D. from Thomas Cooley Law School. 

Our next witness is Mr. Jeffrey Porter, Founder of Porter & Associates and Owner of Porter & Associates, a CPA firm in Huntington, West Virginia which concentrates on providing tax planning and business advisory services to small and medium-sized 

businesses and individuals. 

Mr. Porter is active in the American Institute of Certified Public 

Accountants for over 20 years, currently serving as Chair of the 

Tax Executive Committee. He also has served on the Steering Committee for the American Institute of Certified Public Accountant’s 

National Tax Conference for 20 years, and Chair of the Conference 

for over 10 years. He is also a member of the West Virginia Society 

of Certified Public Accountants. 

He is a frequent lecturer and has taught tax-related continuing 

education classes for a number of state CPA societies, national and 

local firms, and the American Institute of Certified Public Accountants’ National Tax Conference. 

He received his B.A. from Marshall University and his Master’s 

of Taxation from the University of Tulsa. 

I welcome you. 

Ms. Lori Brown is Director of Payroll at CACI International. She 

has over 18 years of experience in payroll tax compliance and payroll system conversions. Lori is an active member of the American 

Payroll Association and currently serves on the FTC Certification 

Board Payroll Hotline Committee National Speakers Bureau and 

the Certification Advisory Group. She has received citations of 

merit from the American Payroll Association each year since 2005. 

Ms. Brown has taught certified payroll professional and fundamental payroll certification exam preparation classes since 2004 at 

Prince George’s Community College and currently at George Mason 

University. 

We welcome you to the Committee. 

And our final witness is Mr. Patrick Carter, who was appointed 

Director of the Delaware Division of Revenue in May 2003. As the 

director, he oversees approximately 200 staff with the responsibility for the Administration, enforcement, and collection of personal and business income taxes for the State of Delaware. Prior 
12 

to becoming director, Mr. Carter served as the Deputy Director of 

the Delaware Division of Revenue from 1994 to 2001. 

Prior to joining the State of Delaware, Mr. Carter served as the 

Finance Director for the City of Wilmington, Delaware for 5 years, 

worked for J.P. Morgan Bank in Delaware, and Cooper & Lybrand 

in Philadelphia. 

He received his B.S. from the University of Delaware and his 

MBA from Indiana University. 

Did you come on Amtrak today? 

Mr. CARTER. I did, Mr. Chairman. 

Mr. BACHUS. All right, good. 

Okay. Now we will go to our witnesses’ statements. Each of our 

witness’ written statement will be entered into the record in its entirety. I ask that each witness summarize his or her testimony in 

5 minutes or less. But if you are 30 seconds over, we are not going 

to ring a bell on you. 

To help you stay within the time—I never read that, so I am not 

going to. But there will be a yellow and red light, which is suggestive. 

At this time, Ms. Riehl, we will start with you, and then Mr. Porter, Ms. Brown, and Mr. Carter. 

TESTIMONY OF MAUREEN B. RIEHL, ESQ., VICE PRESIDENT, 

GOVERNMENT AFFAIRS, COUNCIL ON STATE TAXATION 

(COST), ON BEHALF OF COST AND THE MOBILE WORKFORCE 

COALITION 

Ms. RIEHL. Thank you, Chairman Bachus, Ranking Member 

Johnson, and Members of the Subcommittee. Again, I am Maureen 

Riehl, Vice President of Government Affairs for the Council on 

State Taxation. COST is a D.C.-based trade association which represents about 600 of the nation’s largest employers on state and 

local tax issues. 

In addition to COST, I am also here representing the 263-member mobile workforce coalition of organizations and companies in 

support of H.R. 1129. 

Mr. Chairman, I am going to begin by thanking Ranking Member 

Johnson and Mr. Howard Coble for introducing H.R. 1129, the ‘‘Mobile Workforce State Income Tax Simplification Act.’’ I also want to 

thank Members of this Subcommittee who are also co-sponsors of 

the legislation and thank those that are considering becoming cosponsors. 

I appreciate the opportunity to share with you COST and the 

coalition’s views on this important issue, and that is addressing 

state personal income taxes imposed on employees who travel away 

from their resident states for temporary work periods and associated tax withholding obligations of their employers. 

We urge adoption of H.R. 1129 for three main reasons. First, it 

is a widespread problem and one that Congress has addressed and 

fixed before. 

Secondly, H.R. 1129 is a simple and timely solution to this problem. 

And third, a Federal uniform standard is the appropriate and 

only solution to fix this problem. 
13 

The problem is widespread and growing, and one that has been 

fixed by Congress in the past. Thousands of employees travel each 

day for work, and the majority of these are temporary trips where 

they return to their resident state. Employees who travel outside 

their home state for business purposes are subjected to onerous administrative burdens both at home and certainly if they have to file 

in a non-resident state, and that may be true legally even if they 

are there for only 1 day. 

The current patchwork of state laws affects employees of all 

kinds, those who travel for work. They could be small business employees, big business employees, utility and communications workers, retail employees, charity and non-profit employees, state employees, union employees, Federal agency and Congressional staff, 

and the list goes on, with very few exceptions. 

Congress recognized this burden and has acted in the past to actually protect a mobile workforce, and has done so with Federal 

laws that are protecting for a 360-day time period officials or employees of airlines, motor carriers, railroads and military personnel. 

This is, of course, to ease the flow of interstate commerce and to 

reduce red tape for the employees of those types of companies. 

Clearly, a second reason we need H.R. 1129 is that it is a simple 

and timely solution. It establishes a simple and predictable 30-day 

threshold to protect workers who travel. After 8 years of negotiation between state organizations and the business community, we 

have a bill here that actually hits on all of these major points. It 

maintains state sovereignty. A state can still decide whether they 

even have a personal income tax. It does not apply to professional 

athletes, entertainers, or public figures. It has modified the threshold day from the start when Mr. Johnson first introduced it from 

60 days down to 30 days, and we have changed the definition of 

a non-resident day. 

And there is no tax avoidance under this bill. One hundred percent of the tax that is owed is still owed to the resident state. The 

only question is when a portion of that would go to a non-resident 

state. 

The third reason to pass H.R. 1129 is that a Federal uniform solution is the appropriate and only solution. Attempts by the states 

to self-regulate have fallen short. We worked with the Multi-State 

Tax Commission over several years, and they finally adopted a 

model statute back in 2011 that is patterned after H.R. 1129, but 

it has only been adopted in one state, North Dakota, and that does 

not even go into effect unless another state passes an identical law. 

There is just simply no example in history to suggest that a voluntary state-by-state approach will work. Florida cannot pass a law 

that will protect its residents when they travel to the State of New 

York. Such legislation faces some political challenges at the state 

level, and at least nine states that don’t have a personal income tax 

are particularly at risk. Absent a uniform adoption, we would just 

simply have a new patchwork of state laws. 

Mr. Chairman, the only real question we confront here is whether this problem should be fixed state by state or fixed at the Congressional level. We believe the Congress is the right place to fix 

this problem, and we think H.R. 1129 is the proper solution. 

I am happy to answer any questions. Thank you. 
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[The prepared statement of Ms. Riehl follows:] 
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Mr. BACHUS. Thank you very much. 

Mr. Porter? 

TESTIMONY OF JEFFREY A. PORTER, CPA, FOUNDER AND 

OWNER OF PORTER & ASSOCIATES, ON BEHALF OF THE 

AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS 

Mr. PORTER. Chairman Bachus, Ranking Member Johnson, and 

Members of the Subcommittee, thank you for the opportunity to 

testify today in support of H.R. 1129, the ‘‘Mobile Workforce State 

Income Tax Simplification Act of 2013.’’ My name is Jeffrey Porter. 

I am a CPA in Huntington, West Virginia and Chair of the Tax Executive Committee of the American Institute of Certified Public Accountants. 

The AICPA is the world’s largest member association representing the accounting profession, with more than 394,000 members in 128 countries. 

H.R. 1129 is an important step in state tax simplification. We believe the bill provides relief, which is long-overdue, from the current web of inconsistent state income tax and withholding rules on 

non-resident taxpayers that impact employers and employees. 

After taking into consideration the costs for processing non-resident tax returns with only a small amount of tax liability, we believe states receive a minimum benefit, if any, from the tax revenue that results from an employee filing a return for just a few 

days of work. We believe Congressmen Coble and Johnson have 

reached a good balance between the states’ right to tax income 

from work performed within their borders and the needs of individuals and businesses to operate efficiently in this economic climate. 

The state tax rules applicable to non-residents are inconsistent 

and often bewildering to multi-state employers and employees. 

Many states tax income earned within the state even if the employee only works in the state for 1 day. 

Some of the states have a de minimis number of days or de minimis earnings amount before requiring employers to withhold tax on 

non-residents, or subjecting employees to tax. However, the minimum thresholds are not administered in a uniform manner. For 

example, a non-resident is subject to tax after working 59 days in 

Arizona, 15 days in New Mexico, and 14 days in Connecticut. 

Other states have a de minimis exemption based on the amount 

of wages earned, either in dollars or as a percent of total income. 

For example, employers are required to withhold in a non-resident 

state after an employee earns $1,500 in Wisconsin, $1,000 in Idaho, 

$800 in South Carolina, and $300 a quarter in Oklahoma. Some 

states have thresholds which are set at a state’s personal exemption, or the standard deduction, or their filing threshold, which 

sometimes changes year by year. 

Some states exempt, and some do not exempt, from the withholding requirement the income earned from certain activities, including training, professional development, or attending meetings. 

Sometimes the exemption only covers withholding. They do not address the non-resident taxpayer’s filing requirement or other tax liability. 
32 

It is also important to note that approximately one-third of the 

states have entered into reciprocity agreements under which one 

border state agrees not to tax another state’s residents, and vice 

versa. However, not all states have reciprocity agreements, and the 

agreements that exist are primarily geared toward non-resident 

employees who ordinarily commute a few miles a day to a particular adjoining state. 

The reciprocity rules normally do not apply to individuals who 

regularly travel greater distances. And because of this gap, I prepare a significant number of non-resident tax returns for individuals who must travel for work. For example, it is not unusual for 

construction workers to travel to a plant shutdown to work for only 

a few weeks. I also know electrical linemen who go from one natural disaster area to the next to restore power after hurricanes and 

floods. I have filed income tax returns in as many as 10 different 

states a year for one of these workers. 

Other everyday examples include a real estate developer’s employee who travels to 20 states to visit prospective sites and spends 

less than a day in each state, or a store manager who attends a 

half-day regional meeting in an adjoining state, with some of these 

meetings occurring only twice a year. Another example is a car 

salesman who lives and primarily works in Ocean City, Maryland 

and occasionally has to drive a car to another dealer in Rehoboth 

Beach, Delaware. 

Unfortunately, employers need to understand and comply with 

all the variations from state to state, and some states have extremely complicated rules. For example, Georgia requires withholding when a non-resident employee works more than 23 days in 

a calendar quarter in Georgia, or if 5 percent of their total income 

is earned in Georgia, or if the compensation for services in Georgia 

is more than $5,000. The employer must determine and calculate 

each of the three thresholds to determine when to withhold for 

each employee working occasionally in that state. 

The current situation of having to withhold and file many state 

non-resident tax returns for just a few days of work in various 

states is too complicated for both employers and employees. The 

AICPA urges this Committee to pass H.R. 1129 and help all the 

taxpayers in the country ease their non-resident state income tax 

withholding and compliance burdens. The bill provides national 

uniformity and a reasonable 30-day de minimis threshold. Therefore, the AICPA strongly supports H.R. 1129 and respectfully commends the co-sponsors of this legislation for the development of 

this reasonable and much needed bi-partisan legislation. 

Again, thank you for the opportunity to testify, and I would be 

happy to answer any questions you may have. 

[The prepared statement of Mr. Porter follows:] 
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Mr. BACHUS. Thank you, Mr. Porter. 

Ms. Brown? 

TESTIMONY OF LORI BROWN, CPP, DIRECTOR OF DISBURSEMENTS, CACI INTERNATIONAL, INC., ON BEHALF OF THE 

AMERICAN PAYROLL ASSOCIATION 

Ms. BROWN. Thank you. Good afternoon. My name is Lori Brown, 

and I am speaking today on behalf of the American Payroll Association in favor of H.R. 1129, the ‘‘Mobile Workforce State Income 

Tax Simplification Act.’’ The APA is a non-profit professional organization with more than 20,000 members. Most of our members are 

the payroll managers for their employers, and some of our members work for payroll service providers who in turn process the payrolls for another 1.5 million employers. 

I have been a payroll professional for more than 20 years and 

have worked for several multi-state employers. Having worked in 

this environment, I have firsthand knowledge of the many challenges that employees and employers face in trying to manage their 

state and local income tax obligations. 

Often when employees cross state borders for work, the administrative burdens on employers and employees increase exponentially. I would like to explain some of the difficulties involved, 

which should help clarify why H.R. 1129 is so important to both 

business and workers. You already have my full written testimony, 

so I would like to focus on a couple of real-life examples. 

One day I was with a former employer. An employee came into 

my payroll office. He said, ‘‘Hey, Lori, why is my paycheck short?’’ 

Understand that we had 4,000 employees and I wasn’t intimately 

aware of each employee’s situation, so I did spend some time looking into it. 

Eventually I was able to tell him, ‘‘John, you were working in 

New York last pay period, and so therefore we had to withhold 

taxes.’’ He looked puzzled and he said, ‘‘Well, I live in Virginia. Do 

you also withhold Virginia taxes?’’ And I replied, ‘‘Yes, that is what 

we have to do.’’ 

So now, not only was he puzzled but he was upset. John’s job required that he travel quite a bit for us to different states, and we 

withheld non-resident taxes for each of those trips. None of his previous employers had done that. 

The following January, when we distributed Form W2s—those 

are the employee wage and tax statements—John’s was six pages 

long. It is unusual for any worker’s W2 to be more than a single 

page, yet John’s was six. He wasn’t happy about that. Like a lot 

of people, John was used to preparing his own tax returns. I told 

him, ‘‘John, you may want to hire a tax professional.’’ ‘‘Lori, will 

the company pay for that?’’ Well, that made me a little uncomfortable. The company did actually reimburse tax preparation services 

for our executives but not for employees at John’s level. For good 

or bad, I hear that is somewhat common practice among employers. 

So we had an employee who had an interesting job and who was 

really good at it. He came to work for us and thought that he understood what he was getting into. The tax situation was a really 

rude surprise. In the end, he was frustrated and there was tension 

in the payroll office. 
41 

I have a friend in the APA, Margaret, who I had told about 

John’s situation, and Margaret said, ‘‘Lori, not only would my company have paid for the tax service, but we would have actually paid 

for the extra taxes to pay to the other states just to keep him 

happy.’’ Not every company is so generous, nor can they be, and 

some, especially small employers, don’t feel they can afford that 

type of benefit. 

There are plenty of other costs that the employer also bears that 

employees like John don’t realize. Through the years my employers 

have had to hire legal and tax counsel to guide us through some 

incredibly complicated situations. While I was with one company, 

we were sending consultants to meet with clients in Colorado. We 

didn’t have offices there, but state rules required that we register 

as an employer. Because we didn’t have a physical presence there, 

we had to hire a registered agent to act on our behalf. That was 

another unexpected expense for us. 

While we had Arizona residents on assignment in California, we 

also had to dedicate personnel to track the time that was worked 

and the wages that were earned there. We needed that data so that 

we could determine whether we needed to pay employment taxes 

weekly, quarterly, annually in California, as well as to know how 

much to withhold for each of those states. 

When the work was over, we also had to be sure to close the accounts, turn off the withholding for the additional state, and track 

the employee’s next work assignment. 

H.R. 1129 would have eliminated a lot of trouble for the companies that I have worked for and the employees that I have paid. 

The 30-day safe harbor provided in the bill would have eased 

John’s tax issues considerably since we wouldn’t have had to withhold taxes for every one of his business trips, and he wouldn’t have 

had to file tax returns for every state that he visited. He would 

have still had a complex return because he was in a few states 

longer than 30 days, but he would have been spared the extra work 

of filing a few extra tax returns just to get all those tax dollars returned to him. 

All too often, obeying the current laws create administrative burden on both employers and employees, but also for states, for no 

good reason. Often, these employees do not incur actual tax debts 

during their short stays. The safe harbor will also provide a framework within which more employers will be able to comply. The law 

will provide clarity through a uniform rule that will eliminate 

much of the confusion created by the current patchwork of laws. 

Thank you for allowing me the time to speak to you. Along with 

my colleagues at the American Payroll Association, my fellow panelists, I look forward to watching this important legislation pass. 

[The prepared statement of Ms. Brown follows:] 
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Mr. BACHUS. Thank you, Ms. Brown. 

Mr. Carter? 

TESTIMONY OF PATRICK CARTER, DIRECTOR, DIVISION OF 

REVENUE FOR THE STATE OF DELAWARE, ON BEHALF OF 

THE FEDERATION OF TAx ADMINISTRATORS 

Mr. CARTER. Chairman Bachus, Ranking Member Johnson, and 

Committee Members, the Federation of Tax Administrators appreciates this opportunity to appear before you on H.R. 1129, the ‘‘Mobile Workforce State Income Tax Simplification Act of 2013.’’ The 

Federation of Tax Administrators is an association of the principal 

tax and revenue collection agencies in each of the 50 states, the 

District of Columbia, and the cities of New York and Philadelphia. 

The FTA has long opposed the Mobile Workforce Act as currently 

drafted because we believe that it will interfere with the states’ 

ability to impose and enforce state income taxes and will lead to 

additional tax evasion and a loss of revenue to those states. 

Forty-one states and the District of Columbia, the cities of New 

York and Philadelphia, and a number of other local governments 

impose income tax on the individuals who perform services as employees in their states whether or not those individuals are residents. In this way, the states and the Federal Government impose 

income tax in the same way. This method of taxing income at the 

source where it is earned is common internationally as well. If this 

was not the case, individuals could avail themselves of a country 

or a state’s economic marketplace without paying for that tax benefit, and could do so in competition with the state’s residents and 

in-state businesses. 

The 30-day threshold, while less than proposed in the original 

legislation, still amounts to a full 6 weeks of work, which is greater 

than most states with statutory thresholds as currently allowed 

and described in much of this testimony. This is a significant departure from taxing income at the source. 

Most importantly, this bill as currently drafted may have a significant negative impact on the states. The State of New York 

alone estimates that it would experience a revenue loss in excess 

of $100 million annually as a result of H.R. 1129. While supporters 

claim that for states other than New York H.R. 1129 is neutral, the 

states do not believe this will be the case for a number of reasons. 

First, states already experience concerted tax avoidance by taxpayers seeking to source income to one of the nine states that do 

not impose a broad-based individual income tax. 

Secondly, while states, like the Federal Government, require employer recordkeeping, reporting and withholding of tax from employee wages as the primary mechanism to ensure tax compliance, 

H.R. 1129 limits states’ ability to require employer recordkeeping, 

reporting and withholding. Studies done over the years by the IRS 

and the states show that where there is no information reporting 

or withholding, taxes can be under-reported by over 50 percent. 

H.R. 1129 undercuts those important recordkeeping, reporting 

and withholding mechanisms that the states need and depend upon 

to enforce their income taxes by allowing employers to rely not on 

their own records but on the estimates made by an employee a year 

in advance as to where the employee expects to be working for the 
74 

coming year. While employers may not know where their employees are every day of the year, I find it incredulous that the employee is better informed of where the employer will be sending 

them during an entire year in the future than the employer is 

themselves. 

Thirdly, while H.R. 1129 excludes from its provisions certain individuals—professional athletes, professional entertainers and public figures—it does not exclude highly-compensated individuals. In 

effect, it does not matter how much an individual might be compensated for services performed in a state. This is important because many highly-compensated individuals travel to a location for 

a short period of time due to the nature of their work and earn significant revenue for their employer and themselves. 

Examples in Delaware of very highly-compensated non-resident 

attorneys representing large corporations before Delaware’s Chancery Court on business matters. 

Lastly, H.R. 1129 contains provisions and terms that are ambiguous and poorly defined, and as a result will ultimately lead to differences in the ways the states interpret and apply these provisions. In my experience, unless provisions are more properly defined, it will lead to more dispute and litigation and not less. 

Despite the fact that the FTA believes that the states currently 

impose by statute or regulatory policy appropriate de minimis rules 

and do not seek to enforce withholding or tax on limited activities 

of employees in a state, still we have worked with the Committee 

staff and industry representatives for almost a decade on this legislation. Seeking a balanced solution to tax enforcement concerns 

and business compliance requirements, the states have proposed a 

solution to be enacted by state lawmakers which we believe will be 

preferable because it would allow states to ensure and retain the 

ability to audit and verify the withholding as correct using employer records, while a threshold would limit the imposition of 

withholding on tax for employees traveling into the state for less 

than 20 days. This solution may not have had the support needed 

to make it a reality because, in part, industry groups have focused 

their efforts instead on this Federal legislation. 

Therefore, we continue to ask the Members of this Committee to 

consider the needs of tax administrators to be able to make sure 

that taxes due are paid and balance the interests of the citizens of 

your state with those of the business community. 

Thank you, Mr. Chairman, Ranking Member Johnson, Committee Members. 

[The prepared statement of Mr. Carter follows:] 
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Mr. BACHUS. Thank you, Mr. Carter. 

At this time I recognize the gentleman from Pennsylvania, Mr. 

Marino, for 5 minutes of questions. 

Mr. MARINO. Thank you, Chairman. 

I have three Committee hearings going on simultaneously, so I 

am going to try and get to each one, but thank you. 

Mr. BACHUS. Many Members of the Judiciary do indeed have two 

hearings going on simultaneously. 

Mr. MARINO. Three. 

Mr. BACHUS. Three. 

Mr. MARINO. All right, let’s get right to the meat of this. 

Does anyone on the panel working in different states get paid by 

a company in one state? Anyone on the panel make any of these 

moves to other states and work? Okay. So that means that you are 

not paying multiple taxes to multiple states; correct? 

Ms. BROWN. Correct. 

Mr. MARINO. No one is paying a state tax in several states. You 

are all paying in one state. 

Mr. PORTER. Correct. 

Mr. MARINO. Okay. I guess let’s start with Mr. Carter. Can you 

give me any reason why it is fair to an employee who lives and primarily works in one state but travels to another state for whatever 

period of time and pay a tax on that? And let me preface that— 

let me follow up with that question by my position. 

I am sick and tired of hearing the Federal Government primarily 

and the states say we have to increase revenues, and it is always 

on the backs of hard-working, tax-paying Americans, okay? It is 

about time that the Federal Government, especially the Federal 

Government, and states start cleaning their act up. 

I worked in industry. I worked in a factory until I was 30 years 

old, started sweeping floors, and I know how hard it is to work in 

a factory. I know that there are no wealthy people working in a factory, even people who have to travel to another state, and let me 

give you an example. 

I was in the baking industry, and when we would build factories, 

employees from the companies that built the machinery from other 

states would come into our state and put that machinery together. 

They weren’t millionaires by any stretch of the imagination, and 

they certainly were not well off. They were making ends meet, just 

like I did. But unfortunately for them, they had to leave their families and go to another state. 

Now, can anyone—but we will start with Mr. Carter—tell me 

why it is fair for a person to pay multiple states? 

The Federal Government and the states better get their acts together. They had better start decreasing the size of government. 

They had better start becoming more effective and more efficient 

in running governments, because if that were the way my business 

was run when I was in industry, it would have been shut down, 

and those elected, those appointed would have been fired a long 

time ago. 

Fewer people, more responsibility, and I am tired of hearing 

more revenue on the backs of hard-working, tax-paying Americans. 

Mr. Carter? 
84 

Mr. CARTER. Committee Member, the primary reason why states 

believe or I believe—let me say I believe—that a non-resident individual should be subject to taxation in that state where they are 

engaged in business activities is they are availing themselves of the 

assets of that state, the roadways. If they get injured, the court 

system. If they are accosted by someone, they use the police force. 

All that is funded by that state while they are working. 

Mr. MARINO. Okay. Now I am going to bring out my prosecutorial 

experience. I was a prosecutor for 18 years. 

I am driving through State x, driving through it, and I am using 

the road, and there are no tolls. Should I be paying some type of 

tax for using it? Don’t I do that with the Federal Government? And 

aren’t many roads in states funded by the Federal Government? 

Number one. 

Number two, we have a Constitutional right to be protected in 

this country by law enforcement no matter where we go. 

So you are not going to sell me on why a state should be able 

to tax someone. Maybe the state has to get its act together and 

start running efficiently like my business ran. 

Anyone else? 

Mr. PORTER. Well, I will just concur. I see typically this in my 

practice. I represent contractors and construction companies, and 

also construction workers, and I can tell you that it creates a great 

deal of complexity within the company systems, it creates a great 

deal of complexity for the individuals as they have to file their tax 

returns. At the end of the day, they usually get credits back to offset, and the net effect for them is many times minimal, but it does 

create additional complexity. 

Mr. MARINO. Well, let’s step aside of the complexity and the ridiculous paperwork that government is known for. It is simply not 

fair to hit someone two times, three times, four times because they 

happen to work in that state. 

That individual, Mr. Carter, with all due respect—I am not aiming this at you, sir; please don’t take it personally. But I am just 

as passionate on this side of it as you are on your side of it. But 

that individual is providing a great service for that state also. 

Ms. Brown? 

Ms. BROWN. Agree, agree. And I would just like to add on to that, 

that generally speaking we are not talking about the executives. 

Those aren’t the ones that are walking into our offices with the 

questions and with the confusion. Most of our workforce do not understand these laws. So I am forced to explain this to them and explain to them why New York is different from California, and California is different from the next to the next, and all they want to 

do is they just want to do a good job and get the paycheck that 

they expect to receive. 

Mr. MARINO. And it is not the person walking into your office 

who is a top executive where that tax may be being paid for by the 

company. It is an individual that primarily is living from paycheck 

to paycheck, trying to raise a family and send kids to college. Believe me, I have been there, I know what it is like. I do not agree 

with this whatsoever of being taxed by multiple states. One state, 

where you live, that is it. Thank you. 

Ms. BROWN. Agree. 
85 

Mr. COLLINS [presiding]. The Chair now recognizes the gentleman from Georgia, Mr. Johnson. 

Mr. JOHNSON. Thank you, Mr. Chairman. 

Mr. Carter, do you agree that there is a problem that this bill 

addresses? 

Mr. CARTER. Ranking Member, personally I do think it is very 

difficult for employers to keep track of some employees, especially 

when there are states such as Delaware where the de minimis 

number of days is 1 day. An example I use and that was mentioned 

is utilities. There may be, especially here on the East Coast as utility companies tend to be regional, where one of the employees of 

the utility may be working in a state which is their primary area 

of responsibility, and they are sent into Delaware for a day or a 

week to do work there. The manager of the operation isn’t a tax 

expert, probably not talking to the payroll department all the time, 

and they are totally unaware of the different laws in the different 

states. So I do recognize that there is an issue here. 

I do think that 20 days, a 20-day period, which is a full month 

of work, as a bright-line test that you can send to all of your employees and tell them if they are working somewhere for more than 

20 days, check with the payroll department to see if you are subject 

to tax, is a very bright-line test that can be used nationally. 

Mr. JOHNSON. So is 30 days. 

Mr. CARTER. So is 365. I do think 20 days is a lot of time to be 

working in your state, and I mentioned to Representative Marino 

that they are availing themselves of the state resources, and they 

should be, in my belief, subject to taxation in that state. 

Mr. JOHNSON. All right. 

Ms. Brown? 

Ms. BROWN. Thirty days is all-inclusive. So it is not business 

days. It doesn’t exclude certain days. So it is really important to 

home in on the fact that the 30 days is 30 days from when that 

person steps into the state for 30 days forward. 

Mr. JOHNSON. Mr. Carter, if that is what the legislation says, do 

you still have a problem with that? 

Mr. CARTER. As I stated in my testimony, I have issues with 

some of the definitions of how it would work. I think what you 

would see happening, because I don’t think this is as clearly defined as Ms. Brown, at least in our mind, that you would see regulations issued by individuals such as myself, tax commissioners, 

trying to find that 30-day period. 

What happens if someone comes in on January 1st and then they 

don’t come back until August 1st? That is a 30-day period from 

start to finish, and they have only been in our state for 2 days. 

Ms. RIEHL. Congressman Johnson? 

Mr. JOHNSON. Ms. Riehl? 

Ms. RIEHL. I just want to make clear that that has been a longestablished change to the legislation from when you originally introduced it. The definition of a non-resident day is any fraction of 

any day. So that has been long established. There was actually a 

discussion that occurred with Committee staff between the hearing 

in the last Congress and the move to the full floor, one of the clarifications that was made. When we say a day, it is any fraction of 

a non-resident day. 
86 

Mr. JOHNSON. All right. 

Anything else, Mr. Carter? 

Mr. CARTER. No, Ranking Member. 

Mr. JOHNSON. All right. Thank you. 

Anyone else have anything to add? 

[No response.] 

Mr. JOHNSON. I think you all have been quite explicit in your 

reasons for supporting the bill, and also for opposing it. So I would 

have no further questions, and I would yield back the remainder 

of my time. 

Mr. COLLINS. Ms. DelBene? 

Ms. DELBENE. Thank you, Mr. Chair. 

I come from a state, Washington State, where we don’t have a 

state income tax. Many of our state’s residents travel frequently for 

business and currently face the confusing patchwork that many of 

you described of non-resident state income tax filing rules. Despite 

living in a state with no income tax, residents of my state may be 

legally required to file an income tax return in every other state 

in which they travel for business, in some cases even if they were 

there for only 1 day, as many of you have talked about. 

I do think Congress can play a role in alleviating the difficulties 

facing these individuals and families in our current system, and I 

believe that we should, and that is why I am a co-sponsor of this 

legislation. 

That said, I am very mindful of the concerns being raised regarding state sovereignty and potential impacts to state revenue, and 

I am pleased that supporters of the bill have been open to changing 

the bill over the years to address these concerns. 

I wanted to ask in particular Mr. Porter, your testimony discussed the variety of businesses, large and small, who are impacted 

by the current state of affairs. Particularly for small businesses, 

and we have talked about this a little bit, can you talk about the 

compliance burden on these businesses? For example, in what 

number of states are non-resident employees subject to tax withholding on the first day of travel, or a small business that doesn’t 

have much employee travel? How much are their expenses in terms 

of preparing the paperwork necessary to comply with these rules, 

versus the actual taxes that are paid? 

Mr. PORTER. Sure. I mean, when you are thinking about small 

business, you are, first off, looking at businesses that traditionally 

don’t have a large staff, they don’t have a large payroll department. 

So many times, at least what I see in my clients’ practices, you 

have one person that does the payroll. So they are doing payroll, 

and they are probably doing payables, and they are doing a lot of 

other types of things. 

So it does become overwhelming to track. In particular, I think 

in my practice I had a construction client that many times would 

take a job in a power plant that did a shutdown for two or 3 weeks, 

and they may have 500 or 600 employees that would suddenly go 

up and that would be working through the union hall at that one 

particular site, and they are going to have to gear up and do that 

and get all the multi-state issues going, and it becomes very problematic. 
87 

So the alternative is to out-source it, which is one alternative to 

do. But many out-sourcing payroll entities, they don’t necessarily 

track things by days. They are more inclined to track by pay periods. So it is very confusing. It is very challenging, and it is also 

very challenging for those employees who are in those environments and then go to people like me to fill out their tax returns 

at the end of the year. 

I think I used in my testimony the example of an electrical lineman. It is not unusual as you hear thunderstorms, like we are having today, and they move through the area and they knock out 

power, then these gentlemen and ladies will come in and do that 

work and find that they have to file a tax return in this area. Then 

they have to file a tax return in this area for the next storm. 

So it is very challenging, and it is very confusing for them. 

Ms. DELBENE. How many states start withholding after the first 

day? Do any of you know the answer? 

Ms. RIEHL. The majority. 

Ms. DELBENE. And I assume for a lot of small businesses where 

they might only have a couple of employees who might be impacted 

by this, the cost of administration in terms of filing is much more 

than any taxes that are paid to states. 

Ms. Brown, you are shaking your head? 

Ms. BROWN. Yes, I agree. 

Ms. DELBENE. Do you have an idea of what those costs might be 

relative to—— 

Ms. BROWN. So, for instance, part of my testimony is that I have 

worked with an employer who had about 1,400 employees. They 

were in about nine states. We had to hire outside legal counsel, 

outside tax counsel. We had to hire registered agents in the states. 

We had to pay for tax preparation services for the number of employees that were affected. 

And on top of all of that, I think that a priceless piece of it is 

the employee morale and the employer-employee relationship. We 

are being compliant. Maybe companies that they worked for previously had not been or didn’t have the resources available in order 

to withhold properly. So then we are looked at as the bad guy almost. So I think that is a real priceless cost that the employer 

takes. 

Ms. DELBENE. Ms. Riehl, you talked about voluntary efforts for 

voluntary compliance in the states and that those haven’t taken 

hold. I wonder, Mr. Carter, if you think that there is a potential 

to move that forward since it looks like those efforts haven’t really 

gained any traction so far. 

Mr. CARTER. Representative DelBene, I think it is a challenge 

personally. It was mentioned that North Dakota has adopted model 

legislation, but only with the caveat that other states will adopt 

model legislation. If I use my state, Delaware, as an example, we 

do not have any reciprocal agreements with the surrounding states 

of Pennsylvania, New Jersey and Maryland. If we were to adopt 

this type of legislation for our state and the other states did not 

adopt it simultaneously, we definitely would see a loss of revenue 

to those non-resident employees who are working in Delaware, and 

that is the challenge, to try to at the same time get the surrounding states to adopt the legislation at the state level. 
88 

Ms. DELBENE. So it sounds like you are not feeling confident that 

there is going to be a voluntary solution. 

Mr. CARTER. I am not. 

Ms. DELBENE. Okay. 

Thanks to all of you for being here. I appreciate it, and I yield 

back. 

Mr. COLLINS. I thank the gentle lady. 

I tell you what. In light of votes that are going on, I am going 

to begin my question series, and I have just a few questions, and 

we are going to take a short recess for that. So anybody else who 

wants to go ahead and do their vote, we will pick back up—either 

myself or the Chairman will pick back up when we get back. 

So, with that public service announcement, then I have a couple 

of questions. 

Ms. RIEHL AND MR. Porter, I have a hypothetical, and this is 

something that if things come along and they are just—frankly, 

something about this whole situation just strikes me wrong. Mr. 

Carter, we have a gentleman’s disagreement on this, but I understand. I come from a southern state, worked on the state legislature. I get the fact that states and cities are becoming tax starved. 

I get that. 

But this is just a hypothetical, and it goes a little bit to your employment duties, wording classification, which I did read your written testimony. I work for the University of Georgia, or I worked for, 

as I used to in a previous time, I worked for a church. I take a 

leave of absence, which is not a leave of absence but a sabbatical, 

which happens in higher education but also in churches or other 

organizations as well. 

I go to a state that begins supposedly on Day 1 collection. I go 

there to research a book that I am going to write, to pray, to meditate, to just get away for 4 months. 

Under this bill, would what I am doing classify as a vacation or 

employment? It is a hypothetical. I am a lawyer, too, so this is—— 

Ms. RIEHL. I think in that scenario, Congressman, that sabbatical which is paid for would be treated just like it would if you 

were on paid vacation. But if you do work on a vacation day and 

that somehow is tracked or traced by yourself in recordkeeping, a 

lot of that has to do with how you would account for that time. If 

it is counted against your time off of work, or if it is not counted 

against your time off of work, you are still being paid. 

Mr. COLLINS. Most sabbaticals would not be counted against my 

time off of work. It would just be counted as a time to go take time 

off, to read, to do stuff that doesn’t apply to my job. 

Ms. RIEHL. Exactly. 

Mr. COLLINS. Mr. Porter, do you have anything to add? Because 

I have a follow-up as well. 

Well, the follow-up I have here is what is to keep—Mr. Carter 

or Ms. Brown, jump in here whenever you want. What is to keep 

states, then, from saying that any time I go into a state for a vacation in which I take a call from work, that is a taxable day? 

Ms. RIEHL. Technically, it is. 

Ms. BROWN. Technically, it is. 

Mr. COLLINS. That is a bunch of bull. [Laughter.] 
89 

We have another term for it in Northeast Georgia, but I am 

among mixed company and I am a southern gentleman. My mother 

would shoot me. 

But I think the issue here is that we are really beginning to see 

an issue here that is very disturbing. I appreciate the authors’ intent here, and I think it is something that needs to move forward 

in looking at how we deal with this. But there are some issues on 

when this applies and how this applies. 

Frankly, the Federal Government is a little bit hypocritical about 

this because I am in the military as well. Georgia is my state of 

residence. I can PCS anywhere in the world or any other place in 

the country and I am going to be taxed in Georgia. And now the 

Federal Government is coming in to say basically states who want 

to tax you to death, you are going to get your taxes no matter 

where you are claiming residency, and I think the 30 days to me 

is a little, frankly, arbitrary in a sense, and I think we are working 

on it. I know my good friend from Georgia has worked on this very 

hard. 

Is there a better way to look at this? Two questions. Does the 

Federal Government have to jump in on this? Number one. And 

number two, is there a better way to sort of define some of the 

problems and issues that I brought up? 

Ms. RIEHL. I would say that the Federal Government has to act 

here, and Congress has the authority to do it, because of the nine 

states that do not have a personal income tax. They cannot pass 

a law in the State of Washington that would protect their employees when they travel to Georgia. Only Congress can do that. And 

by setting a new standard of 30 days when you cross state lines 

in any one given state, we just think that is a new starting point. 

It doesn’t bar the state from expecting to have a portion of your 

earned income paid there, but only after 30 days in a calendar 

year. 

In this instance, when personal income tax laws were passed, 

people didn’t travel beyond their home city or county, but that is 

just not common these days. This workforce that we all are in right 

now is much more mobile, and as Lori described in her testimony, 

it is middle management, it is folks at entry level that are moving 

around for work, and they are being subjected to this. 

Mr. COLLINS. Again, the concern here is that if we go ahead with 

this step—I am looking down the road, and my hypothetical sort 

of highlighted this—we have now condoned this and we have set 

up a standard, and then maybe through vague terms or different 

states deciding we need more money, that phone call back from the 

office on a vacation now becomes a taxable day, and I don’t think 

that is a good move. 

Ms. RIEHL. We could certainly move to no non-resident implications for tax where all you do is pay that to your home state 100 

percent of the time. And certainly residents of states that don’t 

have a personal income tax would not owe a penny to a state regardless of how much time they spent there. 

Mr. COLLINS. And I know, Mr. Carter, you brought that up, saying that is not fair. Well, frankly, every state has to determine how 

they want to collect income, and if they choose not to have an income tax, then that is more the reason they can—that is a state 
90 

choice that they have made, and if another state doesn’t like it, 

then they can go to a state non-income tax as well. 

Mr. CARTER. That is a potential option, but in reality the states 

are structured to raise their income for the way they are. As you 

just said, your State of Georgia is a personal income tax and a 

sales tax. Delaware has no sales tax but a little bit higher personal 

income tax. 

Mr. COLLINS. I think what we have raised here is just a lot of 

questions that could go on. 

We have to go vote. So, at this point the Committee will stand 

in recess, subject to the call of the Chair. 

[Recess.] 

Mr. BACHUS [presiding]. The Subcommittee will come to order. 

I yield myself 5 minutes for questions. 

Before we left, I was listening to an exchange between Mr. Collins and Mr. Carter in which you were talking about how unfair 

it was if someone was in a state utilizing their services that they 

should pay taxes to that jurisdiction because that jurisdiction was 

providing services, and you were including all taxes, income taxes. 

I was thinking about, just hypothetically, if I went to New York 

City, which I did Sunday, and spoke, but let’s just say I went there 

for a month or 2 weeks to work. When I got to the airport, I would 

pay an airport tax. When I got in a cab, there is a tax there. When 

I got to the hotel, I would pay a pretty steep lodging tax. So my 

shelter would be as much as—and I don’t know what the tax is on 

hotel and motel rooms. But if I am not from there, I am going to 

be staying at a hotel or a motel, so I am going to be paying a pretty 

steep tax there. Anything I buy, I am going to pay a sales tax. 

I did ask my staff to print out—I would pay a 4.5 percent New 

York State sales tax and a 4 percent New York sales tax. The only 

exemption would be if I bought a pair of shoes. 

Now, the whole time I am there, my five children would be in 

school in Alabama. I would have a home in Alabama. My garbage 

would be picked up in Alabama. If there was a fire at the hotel, 

I don’t own the hotel or motel in New York. So if there were firefighting services, that is provided. That benefits—I mean, a hotel 

owner pays that, but I am also paying because I am paying a lodging tax. But back home, they are getting none of that. They are 

providing free police protection, fire protection, sanitation, garbage 

pickup. 

But more importantly, they are paying for the education of my 

children, which is a major expense. But if my income tax is going 

to New York and my children are being paid for teachers in Alabama, that just doesn’t seem fair. I hadn’t really thought about it, 

but if anybody had a claim, even when I am in New York, I am 

paying a lot of taxes in New York. 

If you take the income tax and pay that, too, I am paying almost 

nothing to Alabama, but it is 80 percent of what I am benefitting 

from. 

We talk about emergency workers. One of my questions I think 

kind of fits right in. Natural disasters such as flood, fire, earthquake, tornado, wind storms affect thousands of people every year. 

According to FEMA, since 2010 we have averaged 87 major emergency declared disasters every year. At times, disaster impact 
91 

states rely on a workforce, plus volunteers too, from all over the 

country to help restore critical infrastructure such as telecommunication networks and electrical grids. It doesn’t say it here, but they 

also come in and provide claims processing to reimburse people for 

their lost houses, lost cars, other insurable loss. We want to encourage that. I don’t really want to deal with somebody over the 

Internet, and I am afraid that if this workforce is in any way discouraged from coming in because, all of a sudden, all their taxes 

go to the state, and they are there, even as volunteers—you know, 

I thought about this. When they come in as volunteers, the state 

is getting lodging tax, they are getting when they buy food. They 

are getting paid for that. Their gasoline. They are paying. 

You mentioned roads specifically. Let me tell you, if they buy gas 

or they go into an airport, believe you me, they are paying. So I 

am not sure that, the more you think about that, the more—you 

know, police come in from other states, fire responders, fire trucks. 

They loan equipment to them. They gas up. But they are there for 

the sole benefit of those people who are hit by whether it is Katrina 

or whatever, 9/11. 

But I guess the question that the Committee prepared I think is 

a good one. How do state and local taxes impact the efforts, and 

how will this act help Good Samaritans who come into a state to 

help in case of a disaster, which is probably the biggest influx by 

far of people? 

Mr. Carter? 

Mr. CARTER. Mr. Chairman, the Delaware General Assembly actually recently adopted legislation that exempted emergency workers in the State of Delaware for a short period of time. I believe 

the period is for 60 days if either a state or national disaster is declared. 

Mr. BACHUS. Would that include utility workers? 

Mr. CARTER. That includes utility workers. Yes, it does. 

Mr. BACHUS. How about in New York? 

Mr. CARTER. There are eight states that have adopted this legislation. I was just speaking to—— 

Mr. BACHUS. And those emergency workers still pay their lodging 

tax. 

Mr. CARTER. They would still be, or the company would pay, the 

utility company. Whether the local utility company reimburses 

them—— 

Mr. BACHUS. Somebody would—— 

Mr. CARTER. Somebody would, yes. 

Mr. BACHUS. Those are pretty steep. 

Mr. CARTER. It can be in some states, yes. 

Mr. BACHUS. I don’t know what the New York one is, but all 

sorts of taxes. 

My time has expired. 

Mr. CARTER. On the speaking occasions—— 

Mr. BACHUS. But do you see my point? 

Mr. CARTER. I do see your points. But I will say to the speaking 

engagement, if you were speaking in New York—— 

Mr. BACHUS. Oh, I am not talking about speaking. That was a 

poor example. 

Mr. CARTER. Okay. 
92 

Mr. BACHUS. What I am thinking about, somebody comes in to 

work for 2 weeks or 3 weeks. I mean, they are going to pay a lot 

of taxes, but their home state is still providing every service that 

they benefit. I mean, everything is still—the fire service isn’t suspended, and most of them have family at home. But even if they 

are alone, somebody is protecting that house. Their children, the 

schools are still being paid for. And if their income tax goes to New 

York, while I am out of state, my home state is going to lose revenue. 

I think that is where you have a lodging tax. I think that is 

maybe why you have a sales tax. That is why, when you come to 

an airport—there is even a tourist tax now. If you look at a hotel 

bill now, there are all kinds of taxes on there. 

But I am just telling you that I think there are two sides to that 

story. I understand your concern. Your concern was fairness. But 

I am actually saying I think to collect that income tax when they 

are collecting a 10 percent lodging tax and all your gasoline, all 

your food, anything you buy, I think they are getting a pretty good 

deal. And you are providing jobs when you are coming in. 

But I just wanted you to think about that. And education is still 

50 percent of expenses, I think. It is by far the biggest expense. 

And income tax in some states, that is their major source. In some 

states it is not. 

Mr. Johnson? 

Mr. JOHNSON. If I may—— 

Mr. BACHUS. Mr. Jeffries. I am sorry. But, go ahead. 

Mr. JOHNSON. Yes, I just want to clear the air. This is not a revenue raising bill. This is a bill to bring some uniformity to the 50 

states insofar as when income taxes can be levied, and the legislation calls for a 30-day period that must be worked, 30 days, and 

a day is an increment of activity on a particular day. So if more 

than 30 days, then the ability of a state to collect an income tax 

from that traveler who is working in the state becomes effective, 

but not until we reach that 30-day threshold. 

So the reason for this legislation is to create some uniformity and 

to enable businesses and individuals who actually owe the taxes to 

have some certainty, as opposed to a hodge-podge of 50 possibilities 

that they have to pay money to research as a consumer to find out 

where they are liable for income taxes, or for a business, a small 

business having to track all 50 states insofar as when income taxes 

have to be collected in accordance with that particular state’s laws. 

That is very burdensome, and it puts us at a competitive disadvantage as a nation with respect to our businesses. 

So this is to not create any kind of double taxation or deprive 

any particular state of the ability to collect income tax. 

So I just wanted to make those points, Mr. Chairman, and I 

thank you. 

Mr. BACHUS. Mr. Jeffries is recognized for 5 minutes for questions. 

Mr. JEFFRIES. I appreciate the return to regular order as I did 

have some issues that I wanted to be able to address. 

I don’t doubt that this legislation has been introduced in good 

faith by individuals who are supporting it, both sides of the aisle, 

although it does seem to be Beat Up On New York Day. So I 
93 

thought it would be very important to clear up some of the factual 

inaccuracies that I think were presented, not in bad faith, of 

course. 

Now, Mr. Porter, would you agree that Federalism is an important part of the constitutional construct that we have in this great 

republic of ours? 

Mr. PORTER. Certainly. 

Mr. JEFFRIES. And is part of the premise of Federalism that each 

individual state has the capacity to determine for itself the best 

form of taxation for that particular jurisdiction? Correct? 

Mr. PORTER. Certainly, within limits, yes. 

Mr. JEFFRIES. So isn’t it reasonable to conclude that the legislation that is before us is inconsistent with the notions of Federalism 

often put forth by people here in the country and certainly the Congress who talk a lot about individual states’ rights? 

Mr. PORTER. Well, I think in this particular case, as we talked 

about a little bit earlier, there have been movements to try to get 

the states as individual states to enact some type of legislation that 

would help in this particular issue, but that, I think as we said earlier, that hasn’t happened. So the only way to get some type of uniformity would be for the Federal Government to provide that uniformity. 

Mr. JEFFRIES. Now, do you think what New York City and New 

York State have done is fundamentally unfair in terms of the taxation system that they have put forth? 

Mr. PORTER. I can’t speak that much about the State of New 

York or the City of New York because I am not there. Sorry. 

Mr. JEFFRIES. Okay. Well, I think it is clear, and I believe it was 

Mr. Carter who testified that New York State would lose about 

$100 million to $120 million. Is that correct? 

Mr. CARTER. That is correct, with the legislation that is currently 

drafted. 

Mr. JEFFRIES. Okay. Now let me go back to Mr. Porter. Picking 

up on a theme that was raised earlier, tax revenue pays in part 

for police protection; correct? 

Mr. PORTER. Yes. 

Mr. JEFFRIES. And when non-residents are temporarily in New 

York, they benefit from that police protection; true? 

Mr. PORTER. Correct. 

Mr. JEFFRIES. And isn’t it the case that New York City as a center of commerce for the country, if not the world, is uniquely positioned in that it draws people from all over the country, from different regions—in fact, from different parts of the world—to work 

in New York City at a disproportionately higher rate than may 

exist in other parts of the country? Is that a fair characterization? 

Mr. PORTER. Are you stating that wages in New York City are 

going to be higher than wages in other parts of the country? 

Mr. JEFFRIES. People temporarily find themselves deployed for 

work reasons in New York City in numbers greater than in probably any other part of the country because New York City is a center of commerce. Is that a fair characterization? 

Mr. PORTER. I would agree with that, yes. 

Mr. JEFFRIES. So there is a higher burden that is placed on New 

York City in terms of police protection than in any other part of 
94 

the country because of the high number of workers temporarily residing there. Is that fair to say? 

Mr. PORTER. I think that is true and I would agree with that. 

But I think also, as was mentioned earlier, when I am in New York 

City I am paying taxes when I fly in, I am paying airport taxes, 

I am paying hotel taxes, I am paying food taxes that, as a guy from 

West Virginia would think, are higher than what I would be paying 

in West Virginia. So I understand that I am paying—— 

Mr. JEFFRIES. Let me reclaim my time. I do appreciate that, but 

my time is limited. And the same would apply for fire safety protection; correct? That it would benefit non-residents temporarily 

working there; true? 

Mr. PORTER. True. 

Mr. JEFFRIES. The same would apply to sanitation services; correct? 

Mr. PORTER. Correct. 

Mr. JEFFRIES. The same would apply to the extensive New York 

City mass transportation system; correct? 

Mr. PORTER. Correct. 

Mr. JEFFRIES. Now, in terms of this general, overall point, and 

this has really bothered me since my time here in Congress, and 

I only have a little bit of a moment to express it, you have states 

like New York, California, Illinois, Connecticut that regularly send, 

in some instances, tens of billions of dollars more to the Federal 

Government than we get back in return. And in the most recent 

study that I have seen, New York State sent $23 billion more to 

the Federal Government than we get back in return. 

Is that fair, sir? 

Mr. PORTER. I guess that would depend upon your characterization of—again, I think you are talking about Federal revenues as 

opposed to the state issues, which is—— 

Mr. JEFFRIES. And I am talking about Federal revenues that 

then get disbursed to other states. And let me just note for the 

record that two of those states that actually receive more money 

from the Federal Government than they get back in return are 

Georgia, which receives almost $4 billion more in revenue than 

they send to Washington, D.C., and Alabama, which is 47th on the 

list in terms of a negative disparity, positive for the great State of 

Alabama, which receives—— 

Mr. BACHUS. You are beginning to run over your time. [Laughter.] 

Mr. JEFFRIES [continuing]. Which receives $17 billion more—and 

I appreciate the Chair’s indulgence—$17 billion more than they get 

back in return. So all I am saying is that if we want to confront 

unfairness, let’s deal with unfairness broadly defined. 

We are happy in New York State to support states like Georgia 

and Alabama, and these are two very good men, two very good representatives. But to make the situation worse for a donor state like 

New York in my view is fundamentally unfair, and I yield back. 

Mr. BACHUS. Thank you, Mr. Jeffries. 

We are going to have a second round now, and we will alternate. 

Let me ask the accountants on the panel. I also heard the same 

testimony that Mr. Jeffries did about the $100 million, and I was 
95 

sitting there thinking about what Ms. Brown’s company had to go 

through and all these extra income tax returns. 

I am wondering what is the cost of filing all these additional income taxes. I mean, I would think that probably—and I would have 

thought it was a whole lot more than $100 million. But I would 

think that just the accountants, which the customers pay—the accountants may do the taxes, but the customers pay. 

For instance, one thing they are doing that Ms. Brown said, they 

are paying taxes in two different places. But then they are having 

to file an income tax return—I wouldn’t be surprised if it was $200 

million worth for New York or any state. We talked about New 

York. Mr. Jeffries talked about people traveling to New York all 

the time. Believe you me, they travel to Dallas, they travel to Las 

Vegas, they travel to all these places that don’t collect this income 

tax. So, I mean, they travel. 

But I am wondering, Mr. Porter, any one of you, how much do 

you estimate just the cost of compliance is with, say, New York? 

I mean, that is where most of the resistance is coming from. 

Mr. PORTER. I have no idea how much it would be on a stateby-state basis. I can just speak to what I see typically in my practice and when I am preparing tax returns. Again, the type of returns—I am from West Virginia, a predominantly rural community. 

The individuals that I am preparing taxes for are average Americans that are making $100,000, $50,000, whatever the number may 

be. And I can tell you that when I start doing multiple tax returns 

for multiple states, each additional state is probably going to increase their fees by 30, 40 percent per state from what they are 

going to pay. 

So there is a fair amount of cost involved to the individuals. 

There is also a fair amount of cost involved to the employers that 

are having to keep up with all of the recordkeeping and keep up 

with all of the tax systems across the country that they have employees working in. 

Ms. RIEHL. Mr. Chairman, one of the reasons this bill, the legislation first passed in the Congress, we have doubled the number 

of coalition supporters. We are now at 263 organizations, and that 

is because of the exorbitant cost to those companies, and those are 

fairly large. But we did hear testimony about how this disproportionately affects small businesses as well, who do this on their own 

or they have to pay for an expert outside. But the disproportionate 

cost, the exorbitant cost, and certainly the compliance burden. 

So when you put those together, it depends on how sophisticated 

your systems are now and what you have to do to be in compliance 

later. We are really trying to avoid much of that. 

I will say on the $100 million in New York, we have a difference 

of opinion. We have actually calculated that differently in the Ernest & Young study that is part of the record, and I would say this. 

If, in fact, New York claims that it is as high as $100 to $120 million, that doubles the impact to the states it is pulling it away 

from. So the biggest impact state right now is the State of New 

Jersey. We think it is about $26 million. If it is, in fact, as New 

York says, closer to double that number, it is more like $50 million. 

So it is not money that is coming from New York from invisible 

places. It is actually coming from the coffers of other states. 
96 

Mr. BACHUS. Right. And, I mean, Mr. Jeffries mentioned Federalism, and that is our system in this country. But he was talking 

about the Constitution, and Section 8 of the Constitution specifically gives the Congress the power to regulate commerce among the 

several states, interstate commerce, and we are not supposed to 

burden or restrain it. And, boy, this comes pretty close to a burden 

on interstate commerce. 

Let me close. I have 34 seconds. 

I just found out that—and I am not picking on New York. You 

used that as an example, Mr. Carter. But they have been most resistant to this legislation. If I take my car in—I didn’t realize this, 

but if I park in Manhattan, I pay 18.3 percent tax on parking my 

car. I will tell you, $30 or $40, and then I am paying $6.00 or $8.00 

tax every day. That is a pretty good deal for New York, on top of 

everything else. I guess I will just pay that airport tax next time. 

But I can’t get around the lodging tax. 

Mr. Johnson? 

Mr. JOHNSON. Thank you, Mr. Chairman. 

Does anyone know how much money or how much revenue, let’s 

say, New York—by the way, I am not beating up on New York. I 

love New York. 

I love New York. That sounds so good. 

Mr. BACHUS. You have to, because of all the taxes you pay when 

you go there. 

Mr. JOHNSON. But does anyone know how much New York collects in non-resident income taxes per year? 

Ms. RIEHL. If this law was to change from their 1-day rule for 

an employee and a 14-day rule for withholding for the employer, 

at this point if it changed to the 30-day standard found in 1129, 

we think it would impact the state to the tune of about $45 million. 

I don’t know what they get in actual revenue under the current 

system. 

Mr. JOHNSON. Do you have any idea, Mr. Carter? 

Mr. CARTER. I do not, Ranking Member. 

Mr. JOHNSON. I wonder if they have any idea. 

Well, let’s look at it from the other side. How many employees, 

non-resident employees, actually fill out a New York State income 

tax return? Do we know that? 

Mr. CARTER. I do not. I do know in Delaware that we receive 

total tax returns that come in, approximately 20 percent of the returns are from non-residents and 80 percent are from residents. I 

would speculate that New York State, especially when you get 

down around the southern part of the state, has a very high percentage. But the state as a whole, I don’t know if it is the same 

80/20 percent or—— 

Mr. JOHNSON. So, in other words, you are saying Delaware, of 

the 100 percent of tax returns you receive, 20 percent of those are 

from—— 

Mr. CARTER. Non-residents. 

Mr. JOHNSON [continuing]. Non-residents. 

Mr. CARTER. Yes. We receive approximately half-a-million returns a year, of which 400,000 are resident returns and 100,000 

non-resident returns. 
97 

Mr. JOHNSON. Now, all of those non-resident income tax returns 

were generated as a result of employers having to withhold. Is that 

correct? 

Mr. CARTER. For the most part, yes. 

Mr. JOHNSON. We do have employers who are charged with the 

duty of abiding by state law, each and every state law, 50, and so 

this is a cost that businesses bear who actually keep up with all 

of that. 

Mr. CARTER. Correct. 

Mr. JOHNSON. And if they fail to keep up with it, then they are 

liable under Federal law. 

Mr. CARTER. Not Federal law. Well, they are liable for the state 

tax liability. 

Mr. JOHNSON. Yes. 

Mr. CARTER. Under state tax law. 

Mr. JOHNSON. Under Federal law, Sarbanes-Oxley, the chief executive would have to sign documentation—— 

Mr. CARTER. Under Sarbanes-Oxley. 

Mr. JOHNSON [continuing]. Swearing that they are in compliance 

with each and every state law within which they are operating. 

Mr. CARTER. Correct from that aspect. 

Mr. JOHNSON. Any idea how much that actually costs the businesses, both large and small? Anyone? 

Ms. RIEHL. Mr. Johnson, again, I think that we have asked for 

that kind of data from our coalition members, and they don’t know 

how to assess it themselves. But you are correct in that SarbanesOxley and some of the other changes that have happened recently 

at the Federal level to financial reporting documents put personal 

liability on corporate officers and their tax preparers; that they, in 

fact, are attesting legally to be in compliance with all Federal, 

state, and local laws. And that is precisely why there is a growing 

number of supporters of this legislation, because they are at risk 

of being out of compliance. They sign these forms—they have to— 

and there is not necessarily knowledge that they are in full compliance, and that is what we are trying to rectify. 

Mr. JOHNSON. In each of these states, the legislators meet maybe 

once a year or one session per year. These sessions take place at 

different times during the year, and sometimes there can even be 

special sessions. And in any particular session in any particular 

state, there could be a change in the income tax laws. So these 

businesses, both large and small, are charged with the responsibility of keeping up, monitoring these 50 state legislatures. Is that 

correct? 

Ms. RIEHL. Yes. 

Ms. BROWN. Absolutely, and sometimes some of those laws are 

retroactive. So not only does the employer have to know about it 

and comply with it, but sometimes it is even retroactive. 

Mr. JOHNSON. I really hate that one or two states may suffer a 

decline in income tax revenue because of this legislation, should it 

pass. However, looking at the greater good, I think that is something that we have to consider. It is really not meant to hurt any 

particular state. 

But I am comforted in knowing that New York does have quite 

vigorous taxing rates for various activities, so I don’t believe they 
98 

are going to go broke. Plus, they just did some tax—I think, watching TV, I see where if you locate your business in New York in a 

certain location, certain locations throughout the State of New 

York, you may not have to pay any taxes as a corporation. 

Ms. RIEHL. That is for new businesses and definitely part of a 

very comprehensive tax reform effort that the state just finished 

within the last 30 days. One of the items that was suggested that 

they look at in their budget reform was actually changing these 

rules, but they neglected to do so. 

Mr. JOHNSON. Changing the income tax rules. 

Ms. RIEHL. The non-resident withholding rules, yes. 

Mr. JOHNSON. Yes, because one day—— 

Ms. RIEHL. Is too lucrative. 

Mr. JOHNSON. Yes. And so companies don’t want to locate there 

because of that factor. 

Ms. RIEHL. And that is why the change was made to invite new 

businesses in. I should say that we have had ongoing, good dialogues with representatives of the Governor’s Office and others in 

Albany over the last several years on this, and it is a sensitive 

issue for them in that they have just done a very good job when 

it comes to enforcing the law as it is on the books. 

However, after a transition period, after H.R. 1129 is actually 

passed and there is a new starting date of 30 days, New York can 

certainly start at Day 31 doing exactly what it does right now. The 

only advantage that really a state like New York with aggressive 

auditing has is that other states aren’t being just as aggressive 

against them, plus the fact that there are disparate rates. So when 

you visit New York, the best you can hope for when you are credited against your Georgia resident income tax obligation is the 

Georgia rate. New York’s rate is mostly high compared to other 

states, and so there is still going to be a fraction that will never 

be recouped even under a credit system. 

So I think in measuring, New York still can be a little bit ahead 

of the curve just simply because their rates are higher and they 

have been more productive with that. We just want a new starting 

date. 

Mr. JOHNSON. Thank you. And, with that, I would yield back. 

But I would confess my embarrassment at my own great State 

of Georgia, being the Republican citadel that it is, is actually 

mooching on the Federal Government. I just never knew that, and 

I am horrified. I am horrified. I am embarrassed. 

Thank you. 

Mr. BACHUS. Obviously, the Alabama and Georgia delegations 

have been doing a fine job for their citizens. [Laughter.] 

I do want to correct the record. I said in Manhattan you pay— 

the city charges 10.3 percent, and then there is a Manhattan tax 

of 8-something. But that only applies—I mean does not apply to 

Manhattan residents. They are exempted from that 8.3 percent tax. 

So only if you are visiting do you get hit by that. But I bet even 

if you are not visiting, you get the same protection. They exempt 

their own residents from that tax. 

This concludes today’s hearing. Our thanks to all of our witnesses for attending. 
99 

Without objection, all Members will have 5 legislative days to 

submit additional written questions for the witnesses or additional 

materials for the record. 

I really appreciate your all’s testimony, all four of you. I think 

you were ecellent witnesses. 

This hearing is adjourned. 

Mr. CARTER. Thank you, Mr. Chairman, Ranking Member. 

[Whereupon, at 3:12 p.m., the Subcommittee was adjourned.] 

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