Union Calendar No. 424

103D CONGRESS

2D SESSION H. R. 546

[Report No. 103–776]

A BILL

To limit State taxation of certain pension income,

and for other purposes.

OCTOBER 3, 1994

Reported with an amendment, committed to the Commitordered to be printed tee of the Whole House on the State of the Union, and
IB

Union Calendar No. 424

103D CONGRESS

2D SESSION H. R. 546

[Report No. 103–776]

To limit State taxation of certain pension income, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

JANUARY 21, 1993

Mrs. UNSOELD (for herself, Mr. BILIRAKIS, Mr. DICKS, Mr. LAROCCO, Mr.

MCDERMOTT, Mr. SWIFT, and Mr. WOLF) introduced the following bill;

which was referred to the Committee on the Judiciary

OCTOBER 3, 1994

Additional sponsors: Mr. BEREUTER, Mr. CARDIN, Mr. KOPETSKI, Mr. LEHMAN, Mrs. LLOYD, Mrs. MEYERS of Kansas, Mr. SARPALIUS, Mr. SKEEN,

Mrs. VUCANOVICH, Mr. WILSON, Mr. ANDREWS of New Jersey, Mr.

DEFAZIO, Mrs. BENTLEY, Mr. CLEMENT, Mr. FROST, Mr. MARTINEZ,

Mr. LIVINGSTON, Mr. HOCHBRUECKNER, Mr. HERGER, Mr. KREIDLER,

Mr. HOBSON, Ms. NORTON, Mrs. THURMAN, Mr. GORDON, Mr. INSLEE,

Mr. FILNER, Ms. CANTWELL, Mr. HUTCHINSON, Mr. CRAMER, Mr.

STRICKLAND, Mr. HINCHEY, Mr. OWENS, Mr. BROWN of California, Mr.

DOOLITTLE, Mrs. MEEK, Mr. TAUZIN, Mr. WYNN, Mr. HAMBURG, Mrs.

MINK, Mr. BACCHUS of Florida, Mr. PETE GEREN of Texas, Ms. SHEPHERD, Mrs. FOWLER, Mr. JOHNSTON of Florida, Ms. LAMBERT, Mr.

DARDEN, Mr. FRANK of Massachusetts, Ms. ROS-LEHTINEN, Mrs.

MORELLA, Mr. RAVENEL, Mr. ANDREWS of Maine, Mr. LANTOS, Mr.

BAESLER, Mr. UNDERWOOD, Mr. FAZIO, Mr. PETERSON of Minnesota,

Mr. DELLUMS, Mr. BILBRAY, Mr. PARKER, Mr. TANNER, Mr. WILLIAMS,

Mr. COLEMAN, Mr. EDWARDS of Texas, Mr. GENE GREEN of Texas, Mr.

BAKER of Louisiana, Ms. FURSE, Mr. KINGSTON, Ms. MOLINARI, Mr.

YATES, Mr. NEAL of North Carolina, Mr. TORRES, Mr. SANDERS, Mr.

KANJORSKI, Mr. SWETT, Mr. HOLDEN, Mr. BARLOW, Mr. ABERCROMBIE, Mr. HOAGLAND, Mr. DUNCAN, Mr. ROSE, Mr. GEJDENSON, and Mr.

PASTOR
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OCTOBER 3, 1994

Reported with an amendment, committed to the Committee of the Whole

House on the State of the Union, and ordered to be printed

[Strike out all after the enacting clause and insert the part printed in italic]

[For text of introduced bill, see copy of bill as introduced on January 21, 1993]

A BILL

To limit State taxation of certain pension income, and for

other purposes.

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

3 SECTION 1. LIMITATION ON STATE INCOME TAXATION OF

4 CERTAIN PENSION INCOME.

5 (a) AMENDMENT.—Chapter 4 of title 4, United States

6 Code, is amended by adding at the end the following:

7 ‘‘§ 114. Limitation on State income taxation of certain

8 pension income

9 ‘‘(a) Except as provided in subsection (b), no State

10 may impose an income tax on any qualified pension income

11 of an individual who is not a resident or domiciliary of

12 such State (as determined under the laws of such State).

13 ‘‘(b)(1) Subsection (a) shall not apply to the extent

14 that the aggregate amount of qualified pension income of

15 an individual for any calendar year exceeds $30,000. There

16 shall not be taken into account under the preceding sentence
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1 any amount which is exempt from State taxation by reason

2 of other Federal law.

3 ‘‘(2) If more than 1 State would (but for this section)

4 impose an income tax on qualified pension income received

5 by an individual during a calendar year, the dollar amount

6 otherwise applicable under paragraph (1) for such calendar

7 year shall be allocated among such States in such amounts

8 as such individual may determine.

9 ‘‘(3) If more than 1 individual receives qualified pen10 sion income during a calendar year which is attributable

11 to services performed by 1 individual—

12 ‘‘(A) all such individuals receiving such income

13 shall be treated as 1 individual, and

14 ‘‘(B) the dollar amount applicable under para15 graph (1) shall be allocated among such individuals

16 in proportion to their respective shares of such income

17 received during such calendar year.

18 ‘‘(c) For purposes of this section:

19 ‘‘(1) The term ‘qualified pension income’ means

20 any income from—

21 ‘‘(A) a qualified trust under section 401(a)

22 of the Internal Revenue Code that is exempt

23 under section 501(a) from taxation;

24 ‘‘(B) a simplified employee pension as de25 fined in section 408(k) of such Code;
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1 ‘‘(C) an annuity plan described in section

2 403(a) of such Code;

3 ‘‘(D) an annuity contract described in sec4 tion 403(b) of such Code;

5 ‘‘(E) an individual retirement plan de6 scribed in section 7701(a)(37) of such Code;

7 ‘‘(F) an eligible deferred compensation plan

8 (as defined in section 457 of such Code);

9 ‘‘(G) a governmental plan (as defined in

10 section 414(d) of such Code); or

11 ‘‘(H) a trust described in section 501(c)(18)

12 of such Code.

13 Such term includes any retired or retainer pay of a

14 member or former member of a uniform service com15 puted under chapter 71 of title 10, United States

16 Code.

17 ‘‘(2) The term ‘income tax’ has the meaning

18 given such term by section 110(c).

19 ‘‘(3) The term ‘State’ includes any political sub20 division of a State, the District of Columbia, and the

21 possessions of the United States.

22 ‘‘(d) In the case of any calendar year after 1995, the

23 dollar amount contained in subsection (b) shall be increased

24 by the amount determined by the Secretary of the Treasury

25 to be equal to such dollar amount, multiplied by the cost-
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1 of-living adjustment determined under section 1(f)(3) of

2 such Code by substituting ‘calendar year 1994’ for ‘calendar

3 year 1992’ in subparagraph (B) thereof. If any increase de4 termined under the preceding sentence is not a multiple of

5 $1,000, such increase shall be rounded to the nearest mul6 tiple of $1,000. Not later than December 1 of each calendar

7 year, the Secretary of the Treasury shall publish in the Fed8 eral Register the amount determined under this subsection

9 which is applicable to the following calendar year.

10 ‘‘(e) Nothing in this section shall be construed as hav11 ing any effect on the application of section 514 of the Em12 ployee Retirement Income Security Act of 1974.’’.

13 (b) CONFORMING AMENDMENT.—The table of sections

14 for chapter 4 of title 4, United States Code, is amended

15 by adding at the end the following:

‘‘114. Limitation on State income taxation of certain pension income.’’.

16 (c) EFFECTIVE DATE.—The amendments made by this

17 section shall apply to amounts received after December 31,

18 1994.