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66–542 PDF 2011

MOBILE WORKFORCE STATE INCOME TAX 

SIMPLIFICATION ACT OF 2011 

HEARING 

BEFORE THE

SUBCOMMITTEE ON COURTS, COMMERCIAL 

AND ADMINISTRATIVE LAW 

OF THE

COMMITTEE ON THE JUDICIARY 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

ON

H.R. 1864 

WEDNESDAY, MAY 25, 2011 

Serial No. 112–56 

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 

LAMAR SMITH, Texas, Chairman 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

HOWARD COBLE, North Carolina 

ELTON GALLEGLY, California 

BOB GOODLATTE, Virginia 

DANIEL E. LUNGREN, California 

STEVE CHABOT, Ohio 

DARRELL E. ISSA, California 

MIKE PENCE, Indiana 

J. RANDY FORBES, Virginia 

STEVE KING, Iowa 

TRENT FRANKS, Arizona 

LOUIE GOHMERT, Texas 

JIM JORDAN, Ohio 

TED POE, Texas 

JASON CHAFFETZ, Utah 

TIM GRIFFIN, Arkansas 

TOM MARINO, Pennsylvania 

TREY GOWDY, South Carolina 

DENNIS ROSS, Florida 

SANDY ADAMS, Florida 

BEN QUAYLE, Arizona 

[Vacant] 

JOHN CONYERS, JR., Michigan 

HOWARD L. BERMAN, California 

JERROLD NADLER, New York 

ROBERT C. ‘‘BOBBY’’ SCOTT, Virginia 

MELVIN L. WATT, North Carolina 

ZOE LOFGREN, California 

SHEILA JACKSON LEE, Texas 

MAXINE WATERS, California 

STEVE COHEN, Tennessee 

HENRY C. ‘‘HANK’’ JOHNSON, JR., 

Georgia 

PEDRO PIERLUISI, Puerto Rico 

MIKE QUIGLEY, Illinois 

JUDY CHU, California 

TED DEUTCH, Florida 

LINDA T. SA ́ NCHEZ, California 

DEBBIE WASSERMAN SCHULTZ, Florida 

SEAN MCLAUGHLIN, Majority Chief of Staff and General Counsel 

PERRY APELBAUM, Minority Staff Director and Chief Counsel 

SUBCOMMITTEE ON COURTS, COMMERCIAL AND ADMINISTRATIVE LAW

HOWARD COBLE, North Carolina, Chairman 

TREY GOWDY, South Carolina, Vice-Chairman 

ELTON GALLEGLY, California 

TRENT FRANKS, Arizona 

DENNIS ROSS, Florida 

[Vacant] 

STEVE COHEN, Tennessee 

HENRY C. ‘‘HANK’’ JOHNSON, JR., 

Georgia 

MELVIN L. WATT, North Carolina 

MIKE QUIGLEY, Illinois 

DANIEL FLORES, Chief Counsel 

JAMES PARK, Minority Counsel 

(III) 

C O N T E N T S 

WEDNESDAY, MAY 25, 2011 

Page 

THE BILL 

H.R. 1874, the ‘‘Mobile Workforce State Income Tax Simplification Act of 

2011’’ ..................................................................................................................... 3 

OPENING STATEMENTS 

The Honorable Howard Coble, a Representative in Congress from the State 

of North Carolina, and Chairman, Subcommittee on Courts, Commercial 

and Administrative Law ...................................................................................... 1 

The Honorable Steve Cohen, a Representative in Congress from the State 

of Tennessee, and Ranking Member, Subcommittee on Courts, Commercial 

and Administrative Law ...................................................................................... 9 

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

from the State of Georgia, and Member, Subcommittee on Courts, Commercial and Administrative Law ............................................................................... 10 

WITNESSES 

Jeffrey A. Porter, Owner, Porter & Associates, CPAs, Huntington, West Virginia, on behalf of the American Institute of Certified Public Accountants 

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

Prepared Statement ............................................................................................. 15 

Patrick T. Carter, Director, Delaware Division of Revenue, Wilmington, Delaware, on behalf of the Federation of Tax Administrators 

Oral Testimony ..................................................................................................... 21 

Prepared Statement ............................................................................................. 23 

Joseph R. Crosby, Chief Operating Officer and Senior Director of Policy, 

Council on State Taxation, Washington, DC 

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

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

APPENDIX 

MATERIAL SUBMITTED FOR THE HEARING RECORD

Prepared Statement of the Honorable Steve Cohen, a Representative in Congress from the State of Tennessee, and Ranking Member, Subcommittee 

on Courts, Commercial and Administrative Law .............................................. 52 

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

in Congress from the State of Michigan, and Ranking Member, Committee 

on the Judiciary ................................................................................................... 56 

Prepared Statement of the Honorable Henry C. ‘‘Hank’’ Johnson, Jr., a Representative in Congress from the State of Georgia, and Member, Subcommittee on Courts, Commercial and Administrative Law ........................... 57 

Letter from Allan J. Stein, Vice President-Associate General Counsel, and 

Melissa W. Sheik, Vice President-Federal Affairs, American Insurance Association (AIA) ...................................................................................................... 58 

Letter from William Dunn, CPP, Senior Manager of Government Relations, 

American Payroll Association (APA) .................................................................. 60 

Letter from Keith G. Butler, Senior Vice President, Tax, Duke Energy ............ 63 

Letter from Jana L. Haynes, Director of Taxes, Hormel Foods Corporation ...... 64 

Page

IV 

Letter from Robert Melendres, Chief Legal Officer & Corporate Secretary, 

International Game Technology (IGT) ............................................................... 66 

Prepared Statement of Lockheed Martin Corporation ......................................... 67 

Letter from Mary Ellen Peppard, Manager, Government Relations, NJ Chamber of Commerce ................................................................................................... 69 

Letter from Nancy L. Miller, Assistant Treasurer, Unisys Corporation ............. 70 

Submission from the Council On State Taxation (COST), and the American 

Payroll Association (APA) .................................................................................... 71 

(1) 

MOBILE WORKFORCE STATE INCOME TAX 

SIMPLIFICATION ACT OF 2011 

WEDNESDAY, MAY 25, 2011 

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON COURTS, 

COMMERCIAL AND ADMINISTRATIVE LAW, 

COMMITTEE ON THE JUDICIARY, 

Washington, DC. 

The Subcommittee met, pursuant to call, at 1:27 p.m., in room 

2141, Rayburn House Office Building, the Honorable Howard Coble 

(Chairman of the Subcommittee) presiding. 

Present: Representatives Coble, Gowdy, Franks, Cohen, and 

Johnson. 

Staff Present: (Majority) Travis Norton, Counsel; Johnny Mautz, 

Counsel; Allison Rose, Professional Staff Member; Anne Woods 

Hawks, Professional Staff Member; Ashley Lewis, Clerk; (Minority) 

Norberto Salinas, Counsel; and James Park, Counsel. 

Mr. COBLE. Ladies and gentlemen, good to have all of you here, 

by the way. And I have been told that there is a vote on now, and 

I have furthermore been told that it may last as long as an hour, 

an hour and a half. 

And I apologize to you all for that, but I think with that in mind, 

our best bet is to just stand in recess until that last vote is taken. 

Staff will be here to advise the hearing room attendees what will 

happen. So I apologize to you for that, but best-laid plans of mice 

and men, you know, sometimes go awry. 

So if you all will just stand easy and see you in an hour, an hour 

and a half. And meanwhile, we will stand in recess until that time. 

Thank you. 

[Recess.] 

Mr. COBLE. I apologize to you all for the untimely delay. Thank 

you for your patience, and we will get underway here as soon as 

another Member shows up. 

Thank you. 

[Pause.] 

Mr. COBLE. We will come out of recess and reconvene, and again, 

thank you all for your patience. 

And before I give my opening statement, I want to take the liberty of extending a sincere happy birthday greeting to the distinguished gentleman from Memphis, and I will not divulge the age, 

but he is still a young man. 

Mr. COHEN. Thank you, thank you, thank you. 

2 

Mr. COBLE. Ladies and gentlemen, on the way back to Washington, D.C., this past weekend, I looked around in the airport back 

home and saw a number of business travelers getting ready to 

board airplanes, leaving North Carolina to perform work in another 

State. This occurs practically every day in America, involving every 

State in America. 

The American workforce is more mobile in the 21st century than 

it has ever been. Nonetheless, a patchwork of State income tax 

laws place a significant burden on people who travel for work and 

their employers, many of which are small businesses. Currently, 41 

States tax the income earned by nonresidents for worked performed there. 

I do not take issue with the right of those States to impose an 

income tax, but I am concerned that the disparity of tax rules 

among those States is, in many instances, damaging small businesses and stifling economic growth. For example, some States require a nonresident to pay income tax if he or she works in that 

State for just 1 day. Other States do not collect tax until the nonresident works for a certain number of days in the jurisdiction. 

Small businesses must expend considerable resources just to figure out how much they must withhold for their traveling employees 

in 41 different jurisdictions. Employees are also confused about 

when their tax liability is triggered and in which States they must 

file a tax return. 

Such wide variety among State income tax laws is unnecessarily 

cumbersome. Many nonresidents who file a tax return in a State 

end up getting all of their tax refunded to them. In those cases, all 

of the time and energy that employees and small businesses spend 

figuring out where the taxes are owed and filling out income tax 

returns is ultimately wasted. 

On May 12, I introduced H.R. 1864, the Mobile Workforce State 

Income Tax Simplification Act, along with the gentleman from 

Georgia, Mr. Johnson, a Member of this Subcommittee who has 

worked on this bill previously. 

The bill we have introduced would establish a uniform Federal 

framework for State income tax liability. It would simplify State income tax rules for employees and employers by requiring that a 

nonresident employee perform work in a State for at least 30 days 

before tax liability or employer withholding is triggered. States 

would then remain free to impose any tax rate they choose. 

Small businesses are the engine that will drive the American 

economy. Tax simplification at both the Federal and State levels 

will allow small businesses to predict their liabilities with accuracy 

and expend fewer resources researching the nuances of each State’s 

tax law. The money they would have spent hiring accountants and 

tax attorneys can then be spent in creating meaningful jobs and 

growing the economy. 

I look forward to hearing from our distinguished panel of witnesses today and in working with Mr. Johnson furthermore to 

enact a Federal framework for State income tax simplification. 

I am now pleased to recognize the distinguished gentleman from 

Memphis, the birthday boy, Mr. Cohen, for his opening statement, 

at which time I will then recognize Mr. Johnson. 

[The bill, H.R. 1864, follows:] 

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HR1864-2.eps
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HR1864-3.eps
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HR1864-4.eps
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Mr. COHEN. Thank you, Mr. Chairman. 

I appreciate your recognition and your greetings and your birthday greetings. Every birthday is a good birthday. 

Mobility has long been the lifeblood of the modern American 

economy. Entire metropolitan areas depend on regional workforces 

where workers regularly cross State lines. Indeed, in my home city 

of Memphis, we buttress Mississippi and Arkansas, and lots of 

folks work in those States by automobile, and others fly through 

our great hub airport to other places in the country and do business. 

Businesses rely sometimes on their most skilled employees to 

travel, spend extended period of times away from home to work on 

projects. For such employers, skills and expertise are essential. 

FedEx sends folks all around the country all the time, doing work 

for FedEx and coming back. 

States, meanwhile, have a legitimate interest in taxing income 

earned within their borders, including income earned by nonresidents. Unfortunately, this sometimes leads to some confusion 

regarding when and where a nonresident is required to pay income 

tax and under what circumstances an employer is obliged to withhold such taxes and report relevant tax information to the relevant 

government agency. 

H.R. 1864, the Mobile Workforce State Income Tax Simplification 

Act of 2011, which should have a simplified title, is designed to address these concerns. The bill would, among other things, allow a 

State to impose income taxes on nonresidents when the nonresident is present and performing employment duties for more 

than 30 days during the calendar year in which the income was 

earned. 

The bill also clarifies employers’ withholding and reporting obligations by specifying that an employer may either rely on an employee’s determination of the time the employee expects to perform 

duties in a given State or use data from a time and attendance system which tracks where an employee performs duties on a daily 

basis in order to determine the liability obligations that that person 

might have to that particular governmental jurisdiction. 

My home State of Tennessee has no State income tax and has 

a very regressive tax code. But that is neither here nor there. So 

it does not stand to lose in any particular way if this legislation 

were enacted, as some other State’s taxing authorities assert with 

respect to their States. 

I think this legislation, if enacted, would have at least some positive impact on the Tennessean residents who work outside Tennessee for 30 or fewer calendar days in a given tax year, as they 

could avoid paying State income taxes altogether, and one of the 

reasons why some people do come to Tennessee and live besides the 

wonderful artesian water that we have, the barbecue, the basketball, and the hills in east Tennessee, and the other splendid activities, especially the people and those that live in the 9th District. 

This bill could also provide some useful clarification for Tennessee businesses that depend on sending employees out of State. 

I applaud the proponents of this bill for amending its language 

from the language originally introduced back in the 110th ConVerDate Aug 31 2005 12:20 Nov 10, 2011 Jkt 000000 PO 00000 Frm 00013 Fmt 6633 Sfmt 6601 H:\WORK\COURTS\052511\66542.000 HJUD1 PsN: 66542
10 

gress, when I was a cosponsor, specifically in response to the concerns raised by the States. 

Most significantly, the original language required the nonresident employee work more than 60 calendar days before a State 

could tax that nonresident. The revised language, as noted, reduces 

that threshold by half to 30 days. 

My understanding is the States and the proponents of H.R. 1864 

are very close to an agreement on this matter, and the only remaining major sticking point appears to be the appropriate threshold number of days. I have been told the States are pushing for a 

20-day threshold. That difference between 20 and 30 is not insurmountable. It is 10, just into double figures. So that could be 

worked out, I feel confident. 

This Subcommittee has considered this issue for more than 4 

years now. I strongly urge the States and other interested parties 

to reach a consensus on this matter soon. I would like to see the 

consensus worked out soon so this can be a very strong bipartisan 

bill where I work with my colleague who wishes me birthday greetings as a co-prime sponsor and see that this bill does become law 

and save burdensome work and make my accountant, Michael 

Uiberall, who e-mailed me today, happy. [Laughter.] 

With that, I would surrender the balance of my time. 

Mr. COBLE. I thank the distinguished gentleman from Tennessee. 

Normally, we restrict opening statements to the Chairman and 

the Ranking Member. But in view of the distinguished gentleman 

from Georgia’s activity in this bill, I am pleased to recognize Mr. 

Johnson for his opening statement. 

Mr. JOHNSON. Thank you, Representative Coble, my good friend. 

And happy birthday to you, happy belated birthday to you. 

I am pleased to work with you in the 112th Congress on the Mobile Workforce State Income Tax Simplification Act of 2011, H.R. 

1864. This is an important bill that will help workers and businesses, large and small. I have been working on this bill since I 

was a freshman in the 110th Congress, and I am pleased to have 

introduced it this Congress with you. 

We live in an ever-increasing mobile economy. Every day, thousands of Americans travel outside of their home State on business 

trips for brief periods of time. Many States have their own set of 

requirements for filing nonresident individual income tax returns 

that most Americans are not aware of and don’t understand. 

For example, if an Atlanta-based employee of a Chicago company 

travels to headquarters on a business trip once a year, that employee would be subject to Illinois tax, even if his annual visit only 

lasts a day. However, if that employee travels to Maine, her trip 

would only be subject to tax if her trip lasts for 10 days. If she 

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

if she was in the State for 15 days. 

The Mobile Workforce State Income Tax Simplification Act would 

fix this problem by establishing a fair and uniform law that would 

ensure the correct amount of tax is withheld and paid to the States 

without the undue burden of the current dysfunctional system. 

Consistent with current law, H.R. 1864 provides that an employee’s earnings are subject to full tax in his or her State of residence. 

In addition, this bill would only subject employees who perform emVerDate Aug 31 2005 12:20 Nov 10, 2011 Jkt 000000 PO 00000 Frm 00014 Fmt 6633 Sfmt 6601 H:\WORK\COURTS\052511\66542.000 HJUD1 PsN: 66542
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ployment 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 jobs, this bill is a common-sense solution that helps 

workers who are employed in multiple jurisdictions by simplifying 

their tax reporting requirements. 

We are all aware there is a problem, and this bill is the solution. 

It not only simplifies the system, but makes it fair for people who 

work in multiple jurisdictions, and it assists businesses as they 

comply with complex tax laws. 

In an economy that is beginning to recover from the devastating 

recession, this bill makes sense. After 3 years of championing this 

issue, I appreciate this Subcommittee’s interest in this legislation. 

I would be remiss not to recognize former Representative Chris 

Cannon of Utah, who was the original proponent of this legislation, 

and he entrusted it to me. And now I am working with Mr. Coble 

to get it done. 

So I look forward to working with all of you to move the bill 

through Congress and to the President’s desk for his signature. 

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

Mr. COBLE. Thank you, Mr. Johnson. 

And we had the distinguished gentleman from South Carolina, 

Mr. Gowdy, was with us, and I presume he will be back. 

Before we hear from our distinguished panel, the gentleman from 

Tennessee just said to me, he said, ‘‘Howard, I hope you can give 

me these greetings 20 years from now.’’ Twenty years from now, 

Mr. Cohen, I will probably be in sweet Beulah land, or at least I 

hope that is where I am. 

Mr. COHEN. Mr. Chairman, I hope not, and I doubt it. In the 

New York Times today, I read about a lady who I wish I would 

have married. It was one of the mistakes, I have made some mistakes with women before. I should have married this woman. She 

died at 104 with a half billion dollars. [Laughter.] 

Mr. COBLE. Well, maybe I won’t be in sweet Beulah land. 

[Laughter.] 

But it is always good to hear that. 

Good to have our distinguished panel with us. I will give you a 

little background about each of them. 

Mr. Jeffrey A. Porter is the founder and owner of Porter & Associates, CPAs, a local firm in Huntington, West Virginia, which concentrates in the providing of tax planning and business advisory 

services for small to medium-sized businesses. 

Today, he is testifying on behalf of the American Institute of Certified Public Accountants, a group in which he has been active for 

over 20 years. He is currently serving as a member of the Tax Executive Committee for a second term. 

Mr. Porter is a member of the West Virginia Society of CPAs. He 

holds a bachelor’s degree in business administration from the Marshall University and a master of taxation from the University of 

Tulsa. 

Mr. Patrick Carter currently serves as the director of the Delaware Department of Revenue. His testimony today is on behalf of 

the Federation of Tax Administrators, a group he currently serves 

as president. As director, he oversees a staff of 200 who are responVerDate Aug 31 2005 12:20 Nov 10, 2011 Jkt 000000 PO 00000 Frm 00015 Fmt 6633 Sfmt 6601 H:\WORK\COURTS\052511\66542.000 HJUD1 PsN: 66542
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sible for the administration and enforcement and collection of the 

personal and business income taxes for the State of Delaware. 

Prior to becoming director, Patrick served as the deputy director 

of the Delaware Division of Revenue from 1994 to 2001. Prior to 

his public service, Mr. Carter was a CPA in the private sector. He 

received his MBA in finance from Indiana University and his bachelor’s degree in accounting from the University of Delaware. He is 

a member of the Delaware Society of CPAs. 

Mr. Joseph Crosby is the chief operating officer and senior director of policy at the Council on State Taxation, or COST, here in 

Washington, D.C. The council is a nonprofit trade association consisting of nearly 600 multi-State corporations engaged in interstate 

and international business. Its objective is to preserve and promote 

equitable and nondiscriminatory State and local taxation of multijurisdictional business entities. 

Prior to joining COST, Mr. Crosby was the national director of 

State legislative service for Ernst & Young in Washington, D.C. He 

has been quoted as an expert in State and local tax policy in several major media outlets. Before attending American University for 

graduate coursework in economics, Mr. Crosby earned his bachelor’s degree in history at the Loyola Marymount University in Los 

Angeles. 

Gentlemen, good to have each of you with us. Good to have those 

in the audience with us as well. 

Mr. Porter, we will start with you. And if you would, gentlemen, 

on your panel, you will see a panel that will illuminate with a 

green light. When that green light turns to amber, that tells you 

that the ice on which you are skating is getting thin, and you will 

have another minute to go. And if you could wrap up on or about 

5 minutes, we would appreciate that. 

Mr. Porter, we will start with you. 

TESTIMONY OF JEFFREY A. PORTER, OWNER, PORTER & ASSOCIATES, CPAS, HUNTINGTON, WEST VIRGINIA, ON BEHALF 

OF THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS 

Mr. PORTER. Thank you, Mr. Chairman and Members of the Subcommittee. 

We appreciate the opportunity to testify today in support of H.R. 

1864, the Mobile Workforce State Income Tax Simplification Act of 

2011. 

My name is Jeff Porter. I am a sole practitioner in Huntington, 

West Virginia, with Porter & Associates and currently serve on the 

Tax Executive Committee of the American Institute of Certified 

Public Accountants. 

At Porter & Associates, we provide accounting and tax services 

to approximately 100 local businesses and prepare close to 900 individual income tax returns annually. We have clients in a wide 

range of industries, including contracting, wholesale and retail 

trade, medical, law, the food industries, and many others. Today, 

I am pleased to testify on behalf of the AICPA. 

The AICPA is a national professional organization of certified 

public accountants, comprised of approximately 370,000 members. 

The AICPA members advise clients on Federal, State, and interVerDate Aug 31 2005 12:20 Nov 10, 2011 Jkt 000000 PO 00000 Frm 00016 Fmt 6633 Sfmt 6601 H:\WORK\COURTS\052511\66542.000 HJUD1 PsN: 66542
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national tax matters and prepare income tax returns for millions 

of Americans. 

The members of the AICPA also provide services to individuals, 

tax exempt organizations, small and medium-sized businesses, as 

well as America’s largest businesses. 

The AICPA supports H.R. 1864. Businesses, including small 

businesses and family businesses, that operate interstate are subject to significant regulatory burden with regard to compliance with 

nonresident State income tax withholding laws. These administrative burdens take existing resources from operational aspects of the 

business and may require the hiring of additional administrative 

staff or outside experts in order to meet the demands of compliance. 

The business costs could be passed on to customers and clients. 

But either way, they incur cost to someone in the stream of commerce. Having a uniform national standard for State resident income tax withholding and having a de minimis exemption for the 

multi-State assessment of State nonresident income tax would significantly mitigate these burdens. 

Accounting firms, including small firms, do a great deal of business across State lines. Many clients have facilities in nearby 

States that require an onsite inspection during the conduct of an 

audit. Additionally, consulting, tax, and other nonaudit services 

that CPAs deliver may be provided to clients in other States or to 

facilities of local clients that are located in other States. 

Many small business clients of CPAs have multi-State activities 

also. In essence, all of these entities—small businesses, accounting 

firms, and their clients—are affected by nonresident income tax 

withholding laws. 

Forty-three States and the District of Columbia impose a personal income tax on wages, and there are many differing requirements for withholding tax for nonresidents among those States. 

Some of the States have a de minimis number of days before nonresidents working in that State must have taxes withheld and paid 

to the State. Others have a de minimis exemption based on the 

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

income while in the State. 

The rest of the States that impose personal income taxes on nonresident income earned in the State only require a work appearance in the State, even if in the presence of the State only for a 

moment. The issue of tracking and complying with all of these different requirements are further complicated by the reciprocity 

agreements in many States, usually among adjoining States and 

that specify they will not require State income tax withholding for 

residents of other States that have signed the reciprocity agreement. 

It is not difficult to understand the complexity that goes into 

this, and the recordkeeping could be voluminous. The recordkeeping and withholding a State requires can be for as little as a 

few moments of work in another State. 

The research to determine any State’s given individual requirement is extensive and time consuming, especially for a small firm 

or a small business that does not have a great amount of resources. 

14 

This research needs to be updated annually, at least to make sure 

that the State law has not changed. 

In addition to uniformity, we maintain there needs to be a de 

minimis exemption. The AICPA has supported the 60-day limit 

contained in previous versions of similar legislation but believe 

that the 30-day limit contained in H.R. 1864 is fair and workable. 

The changes that have occurred as our country has gone from 

local economies to a national economy are huge. Where businesses 

once tended to be local, they now have a national reach. This has 

caused the operations of even a small business to move to an interstate basis. 

As this Committee moves forward in considering the legislation, 

there is one amendment that the AICPA would recommend. Once 

the 30-day threshold is reached, the employee should pay withholding and State income tax in the host State for all wages going 

forward. Withholding should not be made retroactive for the first 

30 days. To do so would be unfair to the employee. 

Mr. Chairman, again, thank you for the opportunity to testify in 

support of H.R. 1864, and I would be happy to answer any questions you or the Members of the Subcommittee may have. 

[The prepared statement of Mr. Porter follows:] 

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Mr. COBLE. Thank you, Mr. Porter. 

Mr. Carter, you are recognized for 5 minutes. 


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TESTIMONY OF PATRICK T. CARTER, DIRECTOR, DELAWARE 

DIVISION OF REVENUE, WILMINGTON, DELAWARE, ON BEHALF OF THE FEDERATION OF TAX ADMINISTRATORS 

Mr. CARTER. Chairman Coble, Vice Chairman Gowdy, Ranking 

Member Cohen, Members of the Subcommittee, thank you for the 

opportunity to address the Subcommittee on H.R. 1864. 

I am Patrick Carter, president of the Federation of Tax Administrators. The FTA is an association of the principal tax and revenue 

collection agencies in each of the 50 States, the District of Columbia, and New York City. We have worked with the Committee staff, 

industry representatives on this legislation for several years. 

We had requested through an FTA resolution that since New 

York State is the most significantly affected State and since it is 

undertaking review of the issue that Federal legislation should not 

proceed until proponents of H.R. 1864 have worked with New York 

State officials to resolve the issue at the State level. Further, Congress should also take account of the constructive action by other 

States on this issue before proceeding with legislation. 

We regret that except for a reduction in the days threshold for 

determining employees’ tax withholding responsibility from 60 to 

30 days, few of these changes we suggested have been made to the 

legislation before you. As a result, we believe this bill offers avoidance opportunities and makes normal tax administration of this 

area virtually impossible. 

We must oppose the legislation as it is currently written. If Congress intends to pursue legislation in this area, the Federation of 

Tax Administrators believes the legislation should be revised as follows. 

First, the recordkeeping requirements should be improved. The 

proposed recordkeeping requirements absolve employers of virtually any obligation to use information that they have unless 

there is fraud in using the employees’ records. State audits will 

have to be done on each employee to determine if withholdings 

should have taken place. This scheme cannot effectively be audited 

or enforced. 

The fraud standard should be eliminated, and the employer 

should be allowed to rely on employee’s estimate of time in a State, 

unless the employer has actual knowledge that the employee’s estimate is in error. If an employer maintains records on the location 

of an employee, those records should be used to determine whether 

an employee has a State income tax withholding and information 

return obligation. 

On the 30-day rule for establishing tax withholding requirement, 

it is certainly more than is required to deal with the compliance 

and burden issues that the bill is intended to address. For example, 

it is certainly well beyond any level that is necessary to deal with 

individuals who travel regularly as part of their jobs. For example, 

attorneys with litigation, training personnel, meeting organizers, as 

well as government affairs and sales personnel. 

We believe the excessive nature of the 30-day rule contributes to 

the substantial revenue impact that the bill has on certain States, 

particularly in New York State because of the nature of its economy and its role as an international center in finance and business. 

22 

New York State has estimated that this bill could potentially cost 

them between $80 million and $100 million. 

We suggest that it be reduced after a consultation with States 

concerned with the revenue effect of the rule. The FTA believes 

that if the legislation is enacted in this area, the de minimis withholding threshold should have an income component in addition to 

the time component. 

State tax obligations would be triggered if the total wages and 

remuneration paid to an employee for services in a State exceeded 

a specified amount of income or if the employee exceeded a certain 

number of days, as is currently proposed. This is similar to the approach used in the Federal income tax system to determine the taxability of income paid on a nonresident alien. 

H.R. 1864 defines ‘‘day’’ as a preponderance of the employee’s 

employment duties in such State or locality for such day. We believe this is too vague for administrative purposes. We recommend 

that this be changed to substitute ‘‘all or any part of a day in which 

the employee is present and performs services in that State.’’ 

Furthermore, H.R. 1864 provides no guidance and will likely disrupt established State policies on an increasingly frequent form of 

compensation, stock options, or other compensation paid in 1 year 

for services performed in an earlier year. We recommend that the 

legislation include a provision that allows States to allocate option 

income earned by a nonresident to a State based on the proportion 

of time worked in the State from the time the option is granted to 

the time it is exercised. 

The bill only excludes certain public figures and persons of prominence from the coverage of the bill. There are other types of individuals that are paid on a per-event basis. We recommend instead 

that the bill be amended simply to provide that persons paid on a 

per-event basis are not to be subject to the terms of the bill. This 

would avoid litigation and reduce the revenue impact of the legislation. 

Mr. Chairman, New York State is the State that is most negatively impacted by this bill. However, today, I had a conversation 

with the commissioner of the New York State Tax Department, and 

he is amenable with New York State to work with the Federation 

of Tax Administrators and with private industry to work toward a 

compromise on this bill. 

That concludes my remarks on this legislation. We continue to be 

interested in working with the Subcommittee and concerned States 

to develop a mutually accepted proposal. 

Thank you. 

[The prepared statement of Mr. Carter follows:] 

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Mr. COBLE. Thank you, Mr. Carter. 

Mr. Crosby? 


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TESTIMONY OF JOSEPH R. CROSBY, CHIEF OPERATING OFFICER AND SENIOR DIRECTOR OF POLICY, COUNCIL ON 

STATE TAXATION, WASHINGTON, DC 

Mr. CROSBY. Chairman Coble, Ranking Member Cohen, and 

Members of the Subcommittee, my name is Joe Crosby. I am chief 

operating officer and senior director of policy with the Council on 

State Taxation, which is more commonly known as COST. 

COST is a trade association based here in D.C. that represents 

nearly 600 of the Nation’s largest employers on business tax issues. 

Mr. Chairman, I would like to begin by thanking you and Congressman Johnson for introducing H.R. 1864. This is an important 

piece of legislation, and we appreciate your support. 

I would also like to thank the other Subcommittee Members who 

have already agreed to cosponsor and those who I hope will soon 

cosponsor the legislation. 

I appreciate the opportunity to share with you COST views on 

this issue. Mr. Chairman, you and the Ranking Member Cohen and 

Mr. Johnson did an excellent job in your introductory remarks describing the problem and what the legislation does. So being from 

Maine and understanding what thin ice means, I will dispense with 

a lengthy description of what the bill does in the interest of time. 

What I would like to say, simply to add to a couple of things that 

were said earlier, is that this is an issue that impacts all employers, not just businesses. It impacts businesses large and small. It 

also impacts charities and nonprofits and even Government agencies. 

The legislation is not a business legislation, per se, but legislation that helps all employees that travel for work and all of their 

employers, and I think that is an important thing to keep in mind. 

The other thing that I think is helpful to understand, and Mr. 

Carter’s testimony alluded to this, this is an issue that is understood nearly universally to be a problem. The Federation of Tax 

Administrators in prior testimony before this Subcommittee said, 

‘‘Complying with the current system is, indeed, difficult and probably impractical.’’ 

And the executive director of the Multi-State Tax Commission 

said, ‘‘There is widespread noncompliance’’ as a result of the complex laws that are currently in place. 

So I don’t really think there is a whole lot of question with regard to whether this is an issue that needs to be addressed. Nor 

is there really any question about the substance of what the solution should be. The framework that is set forth in H.R. 1864, a national threshold that protects employees that travel on temporary 

work assignments is, indeed, the framework that has been adopted 

by the Multi-State Tax Commission in their own efforts on this 

issue. 

The Multi-State Tax Commission’s agreement, modeled after 

H.R. 1864, unfortunately, will not solve the problem, and Federal 

action is needed. Model State legislation in the area of taxation has 

never been universally adopted in the States. We have never had 

one experience in this country of the States uniformly adopting any 

tax simplification proposal. 

And so, while I would like to think that something like that 

could happen, it faces a fundamental political challenge. And that 

32 

is for especially on this issue, for a State legislator to make this 

issue a high priority would require him or her to put the interests 

of nonresidents above his or her own constituents. 

The legislation, as it might be adopted in any particular State, 

benefits exclusively nonresidents. And so, it is difficult for State 

legislators, as you know better than I, to put forward an issue that 

is going to help primarily folks who are not their constituents. 

And so, adoption of a model State statute by one State or even 

a handful of States won’t solve the problem. For employees who 

travel and their employers, there will be no meaningful simplification unless and until Congress enacts legislation. 

And Mr. Chairman, that is really the question that we confront 

here is whether this is something best addressed separately by the 

States or addressed by this body. And I think the weight of the evidence is clear that it is something that must be adopted here because of the practical political obstacles, as well as the historic inability for States to solve these sorts of problems. 

As you mentioned in your introductory remarks, Mr. Chairman, 

the mobility of our workforce is one of our greatest strengths as a 

Nation, and that flexibility is being impinged by the current laws 

and regulations. Unless H.R. 1864 is passed, that flexibility will be 

hindered and will continue to form a problem. 

Thus, I respectfully request the Subcommittee’s speedy adoption 

of H.R. 1864. I appreciate the time and would be happy to answer 

any questions you have. 

Thank you. 

[The prepared statement of Mr. Crosby follows:] 

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Mr. COBLE. Thank you, Mr. Crosby. 

Thanks to each of you. 

Now, as we pose questions, we will try to comply with the 5- 

minute rule. So if you could keep your responses terse, we can 

move along. I would appreciate that. 


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Mr. Porter, can you explain how taxes paid to a nonresident 

State are generally treated by the resident State for tax purposes, 

and how will this bill affect this treatment? 

Mr. PORTER. Generally, if you are a nonresident and you come 

and work in a State, they are going to withhold taxes. So you are 

going to have to file a tax return in the nonresident State. 

And typically, the resident State will give you a credit for the tax 

that you have paid up to the amount that the resident State would 

generally tax you on that amount. So, in other words, if you are 

in a higher tax rate at, say, 6 percent, a State that only has a 4 

percent rate is going to give you a 4 percent credit equal to that. 

That is typically in the area that I am in—in West Virginia, Ohio, 

Kentucky—a practice that I see. 

This bill would change that just primarily on the first 30 days 

that when you are working in a State, you would not have to pay 

State taxes in the nonresident State. So you would pay it in the 

resident State. 

Mr. COBLE. Thank you, sir. 

Mr. Carter, do you acknowledge that there is a patchwork among 

States’ income tax laws that make or that create administrative 

burdens for small businesses in particular? 

Mr. CARTER. Mr. Chairman, I do. Delaware, our tax nexus for 

employees is very similar or modeled after New York State. One 

day in the State of Delaware, an individual is subject to taxation. 

As you read into your testimony, other States have different 

models. Arizona is 60 days. So someone could be in the State of Arizona for 60 days before they are subject to taxation in Arizona. 

So I do acknowledge that for businesses—in my prior career, I 

worked for JPMorgan Bank in their accounts payable area, and I 

was responsible for making sure that travel expenses were paid. 

But we did not communicate with the payroll department to tell 

people in the payroll department where the people were traveling. 

So it is a challenge for not only small businesses, but large businesses as well. 

Mr. COBLE. I thank you, sir. 

Mr. CARTER. You are welcome. 

Mr. COBLE. Mr. Crosby, if Congress does not approve this bill, is 

there an individual State that has an incentive to reduce the administrative burden placed upon small businesses by the cumulative effect of diverse State income tax laws? 

Mr. CROSBY. Mr. Chairman, it is not in the interest of any one 

State to change this statute because the benefits accrue to folks 

who live outside of the State. So, by definition, it is very difficult 

for a State legislator to put high on their priority list an issue 

which is going to benefit folks living somewhere else. 

We have some wonderful State legislators in this country. A 

friend of mine, State senator Dwight Cook in North Dakota did 

marshal a change through his legislature this year. But I fear that 

we are not going to see a uniform or nationwide movement toward 

this and that North Dakota will prove to be the exception rather 

than the rule. 

Mr. COBLE. I thank you. 

Thank you, gentlemen. 

47 

I am now pleased to recognize the distinguished gentleman from 

Tennessee, Mr. Cohen. 

Mr. COHEN. Thank you, Mr. Chairman. 

The Multi-State Tax Commission has proposed a model statute, 

and I think it has got the 20-day rule in it. I haven’t really put it 

to memory. And it would have a uniform standard similar, I think, 

to the legislation we have got here. 

Mr. Carter, does this address the concerns, the legislation that 

you have, to some extent? 

Mr. CARTER. It does, to some effect. Some of our concerns, as I 

laid out, are some of the definitions in the House rule you have 

right now. I do believe that the States, if we had an opportunity 

to work with the industry and with the Subcommittee staff, we 

could come to an agreement on the definition of days. 

But there are other issues in the bill that I think need to be addressed. 

Mr. COHEN. Other than days? 

Mr. CARTER. Other than days, yes. 

Mr. COHEN. Like what? 

Mr. CARTER. Well, we talked about some of the definitions of 

what a day is. A definition of—— 

Mr. COHEN. It sounds like the title of a song. 

Mr. CARTER. It does. But as to whether bonuses or stock options—not bonuses, but stock options, how they are treated in this 

type of legislation. I think there is some items that worked on, we 

could come up with a bill that is agreeable to both sides on this, 

and I don’t believe that the day threshold is the—although it is important for someone like New York State because of the economic 

impact to them—is not the biggest hurdle. 

Mr. COHEN. Mr. Crosby, are the definitions something you could 

work with Mr. Carter on and Mr. Webster and get this all worked 

out? 

Mr. CROSBY. Yes, Mr. Cohen. After there was a hearing at the 

end of 2007, then-Chairwoman Sa ́nchez of this Subcommittee directed the parties to work together. And under Mr. Johnson’s aegis, 

we spent a considerable amount of time working with representatives for State and local government, and there are numerous 

changes in this version of the legislation to address some of the 

things that the Federation of Tax Administrators raised, including 

the definition of ‘‘day.’’ 

That was changed substantially to ensure that if a nonresident 

is only in one nonresident State, then it is a nonresident day, regardless of how long they are there. We certainly would be willing 

to continue discussions, were it acceptable to the sponsors. I think 

my concern is that I have the redline of the old bill and the letters 

that were exchanged between Mr. Johnson and Chairwoman 

Sanchez at the time discussing and detailing all the changes we 

have made, and there seems to be not a recognition on the part of 

the tax administrators. 

And so, my fear is that we would make further changes and yet 

be back here in another Congress where there are further changes 

yet to be made. So, Mr. Cohen, we certainly would be willing to 

consider them and work with them, as long as there was a good 

48 

faith effort on their part that at the end of the process, they would 

support the legislation. 

Mr. COHEN. So if they would support it at the end. And Mr. 

Carter, it was definitions, and what is your other issue? The days 

you said weren’t important. 

Mr. CARTER. Days were not a critical—although it is expensive 

to some of the States. It would cost Delaware. We are a 1-day 

State. New York, much more than us just because of the size of 

their economy. But there were a series of things. 

Reciprocity, there are certain States that agree, irrespective of 

how many days a nonresident is in the State, New Jersey and 

Pennsylvania have reciprocity. So a Pennsylvania resident working 

in New Jersey is not subject to tax in New Jersey and vice versa. 

This bill does not recognize that. 

Mr. COHEN. Mr. Crosby, why don’t you incorporate that? That 

seems like it would be good for small business and for accountants? 

Mr. CROSBY. That is an excellent question. In fact, what this bill 

does is set a threshold below which States cannot tax nonresidents. 

It does not prohibit a State from setting a higher threshold. 

So those reciprocity agreements that exist right now, you can 

think of them as 365-day thresholds. They are perfectly acceptable 

under this legislation. We could specifically recognize them, and 

that is certainly not a concern. 

The way the bill is drafted, though, it doesn’t impinge upon those 

in any way, shape, or form. 

Mr. COHEN. All right, Mr. Carter. Checkmate. [Laughter.] 

What is your next problem? 

Mr. CARTER. I think the recordkeeping provisions where it refers 

to fraud as being the criteria for whether the records are proper or 

not. That is a very high standard, almost impossible to prosecute 

against. 

We have, in Delaware, we have a statute on tax fraud, and it is 

very, very, very difficult to prove if someone is committing fraud 

in the tax area. We normally prosecute, if we do, for not filing because it is such a high threshold. 

One of the other issues that we have is with the concern with 

high-income individuals. We believe that someone earning $500,000 

a year as being tracked where they go, come and go, maybe the 20- 

, 30-day threshold is not—for that person is not a low enough level, 

just because they are traveling all over the place and their income 

is so substantial. And their goings are easily tracked. 

They are not the type of individual of the small business where 

the person is just popping in for 1 day because they get called up 

and they have to fix the pipes for the plumbing company, and they 

are crossing the State line. 

So there are a number of things I think that we can work on and 

resolve to come up with a much more amenable piece of legislation 

to both the States and private industry. 

Mr. COHEN. My time has expired. So I won’t ask you about the 

right of return in the Golan Heights. 

I yield back the remainder of my time. 

Mr. COBLE. Thank you, Mr. Cohen. 

The distinguished gentleman from South Carolina, Mr. Gowdy, is 

recognized. 

49 

Mr. GOWDY. Thank you, Mr. Chairman. 

And I am delighted to go last. If the distinguished gentleman 

from Georgia, who is an original cosponsor, would wish to take my 

turn, I am pleased to go last. 

Mr. JOHNSON. I would. Thank you, Mr. Gowdy. 

Mr. COBLE. The distinguished gentleman from Georgia is recognized. 

Mr. JOHNSON. Thank you, Chairman. 

Does anybody here know what Charlie Brown used to utter when 

Lucy would take the ball off the tee again, and he would kick and 

end up falling on his back? Does anybody know that? 

Mr. COHEN. I don’t think you can say that in public. [Laughter.] 

Mr. JOHNSON. You knew this was coming for you, didn’t you? 

Yes, I feel like Charlie Brown, and Mr. Cohen is my Lucy. And I 

think he has covered just about everything I would like to cover, 

and I will say thank you for doing that. And that kind of cuts down 

a little time on the hearing. 

I will say, Mr. Crosby, yes, there was a new definition of what 

is a day, definition of a day. And no definition of what does ‘‘is’’ 

mean. What is ‘‘is?’’ 

Mr. CROSBY. No, sir. That was not redefined. 

Mr. JOHNSON. That was not in there, but there are some other 

things in there as well. 

And Mr. Carter, we certainly want to work with you to clear up 

any problems that you may have with the bill. But I think it is 

moving pretty quickly toward adoption by this body, and I would 

encourage you to get with Committee staff and also my own staff 

and staff for Mr. Coble, see what you can work out on this thing 

so that we can go ahead and move it forward. 

And that will be the extent of my questions and comments. 

Thank you. 

And thank you, Mr. Gowdy. 

Mr. COBLE. Thank you, Mr. Johnson. 

Now the distinguished gentleman from South Carolina, Mr. 

Gowdy, is recognized. 

Mr. GOWDY. Thank you, Mr. Chairman. 

I have just got a couple of questions, and they are broad, general 

questions. 

Mr. Crosby, other than the complexities of compliance, what is 

your best argument for uniformity? And I get how complex it is. 

But other than the complexities of compliance, what is your best 

argument for uniformity? 

Mr. CROSBY. I think the best arguments are the ones that Mr. 

Coble made in his introductory remarks in terms of the mobility 

and flexibility of the U.S. workforce. 

As large and small employers alike are subject to additional recordkeeping burdens, large employers are burdened by or having to 

comply with Sarbanes-Oxley and Section 404, ensuring that they 

are in compliance with all applicable laws and regulations. This is 

an increasingly difficult area for them and requires a significant 

expenditure of resources, as well as a significant negative impact 

on the employees who are required to travel for work. 

And so, my fear is that if we move forward without solving this 

problem, ultimately, you will have folks deterred from doing things 

50 

they would otherwise do. I have spoken to numerous business managers and employees who have relocated meetings from one jurisdiction to another because of the potential impact of having tax liability in a jurisdiction. 

As I said, myself, I live in Maine. We have a 10-day threshold 

there. Massachusetts is 1 day. New Hampshire does not have a 

personal income tax. I know many regional businesses that now 

hold their meetings in New Hampshire, much to New Hampshire’s 

benefit, because of the fear of holding those in Maine or Massachusetts and being subject to tax liability. 

So, currently, the existing laws are negatively impacting commerce around the country, and I think that is probably, other than 

the complexity, the biggest concern with the existing patchwork of 

State laws. 

Mr. GOWDY. And you are satisfied that there are no issues with 

the dormant commerce clause? 

Mr. CROSBY. Yes, sir. I am. 

Professor Wally Hellerstein, who wrote literally the casebook 

that is studied by State and local tax lawyers, testified before this 

Committee that this legislation is not only authorized by the Constitution but is exactly the type of legislation that the framers envisioned if they could have envisioned this type of legislation—what 

I will call a surgical insertion into State tax law to alleviate a burden without fundamentally altering the way State taxes work. 

Mr. GOWDY. And if I will listen to the testimony correctly, there 

is nothing talismanic about 30 days, and that is open to negotiation? 

Mr. CROSBY. Representative Gowdy, Mr. Johnson, when he first 

introduced this bill, started with 60 days. And that was based on 

survey data from employers regarding the number of employees 

that would fall outside of certain thresholds and then, in the spirit 

of compromise, was reduced later to 30 days. 

Every reduction you make significantly increases the number of 

employees who would no longer be protected by the bill. So there 

is nothing talismanic about it. But certainly, any reduction means 

that fewer people would benefit from the legislation, so I think 

must be considered carefully. 

Mr. GOWDY. Thank you. I would yield back the remainder of my 

time, Mr. Chairman. 

Mr. COBLE. I thank you, Mr. Gowdy. 

And I want to thank the Members of the Subcommittee for your 

attendance. I want to reiterate our thanks to the panel for your patience, as well as those in the audience. 

And without objection, all Members will have 5 legislative days 

to submit to the Chair additional written questions for the witnesses, which we will forward and ask the witnesses to, in fact, respond as promptly as you can, that their answers may be made a 

part of the record. 

Without objection, all Members will have 5 legislative days to 

submit additional materials for inclusion in the record. 

And with that, again, I thank the witnesses, and this hearing is 

now adjourned. 

[Whereupon, at 3:54 p.m., the Subcommittee was adjourned.] 

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

in Congress from the State of Michigan, and Ranking Member, Committee on the Judiciary 

Today we discuss H.R. 1864, the ‘‘Mobile Workforce State Income Tax Simplification Act,’’ a bill to address concerns employers have raised about different state 

withholding standards. 

I am encouraged that the business community has reached out to the states to 

improve upon this legislation since the 110th Congress. And I sympathize with employers for the difficulties they have expressed on behalf of their record-keeping and 

employees. And the states have acknowledged that there is problem. 

However, the legislation as written does not address all of the concerns the states 

have addressed and will likely inhibit the ability of states to tax, which will lead 

to lost state revenues. 

If States cannot tax the income earned within their borders, it could impede their 

ability to provide needed services which many of us depend upon. States may be 

forced to furlough their dedicated and hard working government employees. 

I understand that some states—especially New York—would stand to lose tens of 

millions of dollars in revenue if the bill is enacted in its current form. My own state 

of Michigan would lose much needed revenue, nearly enough to cover the funding 

cut to libraries and the elimination of dairy inspectors that Michigan Governor Snyder has proposed. These programs support the education and protection of our children. 

With state revenues projected to suffer for the foreseeable future in this economic 

climate, Congress should be wary to pass legislation which may diminish state revenues. I am concerned that the bill’s 30-day threshold, which exceeds the thresholds in 

several states, would allow an employee to work in several states about six weeks 

at a time and not have to pay taxes in those states. Those states would lose revenue 

while some employees would avoid paying taxes. 

The Multistate Tax Commission has proposed a model statute similar to this legislation but establishing a 20-day threshold. Others have proposed a hybrid threshold of 20-days or $20,000 earned in a state in a calendar year. Those thresholds 

seem more reasonable. 

I am also concerned about the timekeeping component in this legislation. In some 

instances timekeeping is left to the employees while in others the employer keeps 

track of the days its employees work in other states. These different timekeeping 

standards may lead to tax avoidance and confusion. 

A further discussion on the timekeeping standard would benefit all interested parties and allay some of the concerns with this bill. 

Otherwise, we may need to introduce separate legislation to improve upon this 

bill. 

Thank you and I look forward to hearing from the witnesses. 

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Prepared Statement of the Honorable Henry C. ‘‘Hank’’ Johnson, Jr., a Representative in Congress from the State of Georgia, and Member, Subcommittee on Courts, Commercial and Administrative Law 

Chairman Coble, Ranking Member Cohen, I thank you for holding this hearing 

on H.R. 1864, the ‘‘Mobile Workforce State Income Tax Simplification Act of 2011.’’ 

This is an important bill that will help workers and businesses large and small. 

I have been working on this bill since I was a freshman in the 110th Congress, and 

I am pleased to have introduced it in this Congress with Chairman Coble. 

We live in an ever-increasing mobile economy. Every day, thousands of Americans 

travel outside of their home state on business trips for brief periods of time. 

Many states have their own set of requirements for filing non-resident individual 

income tax returns that most Americans are not aware of and don’t understand. 

For example, if an Atlanta-based employee of a Chicago company travels to headquarters on a business trip once a year, that employee would be subject to Illinois 

tax, even if his annual visit only lasts a day. 

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

if her trip lasts for 10 days. If she travels to New Mexico on business, she would 

only be subject to tax if she was in the state for 15 days. 

The Mobile Workforce State Income Tax Simplification Act would fix this problem 

by establishing a fair and uniform law that would ensure the correct amount of tax 

is withheld and paid to the states without the undue burden of the current dysfunctional system. 

Consistent with current law, H.R. 1864 provides that an employee’s earnings are 

subject to full tax in his or her state of residence. In addition, this bill 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 common-sense solution that helps workers who are employed in multiple jurisdictions by simplifying their tax reporting requirements. 

We are all aware there’s a problem, and this bill is the solution. 

It not only simplifies the system, but makes it fair for people who work in multiple jurisdictions and assists businesses as they comply with complex tax laws. 

In an economy that is beginning to recover from the devastating recession, this 

bill makes sense. 

After three years of championing this issue, I appreciate this Subcommittee’s interest in this legislation. 

I look forward to working with all of you to move the bill through Congress and 

to the President’s desk for signature. 

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

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