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103D CONGRESS

1ST SESSION H. R. 702

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

IN THE HOUSE OF REPRESENTATIVES

JANUARY 27, 1993

Mrs. VUCANOVICH, (for herself, Mr. BILBRAY, Mrs. UNSOELD, Mr. HUNTER,

Mr. COX, Mr. STUMP, Mr. DORNAN, Mr. LEWIS of California, Mr. WOLF,

Mr. SHAYS, Mr. SUNDQUIST, Mr. GALLEGLY, Mr. KYL, Mr. DOOLITTLE,

Mr. THOMAS of Wyoming, Mr. GOSS, Mr. BILIRAKIS, Mr. FRANKS of

Connecticut, Mr. SCHIFF, Mr. MCDADE, Mr. THOMAS of California, Mr.

FAWELL, Mr. ALLARD, Mr. HANCOCK, Mr. WILSON, Mr. LIGHTFOOT,

Mr. TAYLOR of North Carolina, Ms. NORTON, Mr. CUNNINGHAM, Mr.

BEREUTER, Mr. SOLOMON, Mr. COBLE, Mr. WALSH, Mr. SMITH of

Texas, Mr. LEHMAN, Mr. GINGRICH, Mr. SAXTON, Mr. SKEEN, Mr.

YOUNG of Alaska, Mr. MCCOLLUM, Mr. EMERSON, Mr. STENHOLM, Mr.

JOHNSON of Texas, Mr. GIBBONS, Mr. MCCANDLESS, and Mr.

MCCRERY) introduced the following bill; which was referred to the Committee on the Judiciary

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,
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1 SECTION 1. LIMITATION ON STATE TAXATION OF CERTAIN

2 PENSION INCOME.

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

4 States Code is amended by adding at the end thereof the

5 following new section:

6 ‘‘§ 114. Limitation on State income taxation of pen7 sion income

8 ‘‘(a) No State may impose an income tax (as defined

9 in section 110(c)) on the qualified pension income of any

10 individual who is not a resident or domiciliary of such

11 State.

12 ‘‘(b)(1) For purposes of subsection (a), the term

13 ‘qualified pension income’ means any payment from a

14 qualified plan—

15 ‘‘(A) which is part of a series of substantially

16 equal periodic payments (not less frequently than

17 annually) made for—

18 ‘‘(i) the life or life expectancy of the recipi19 ent or for the joint lives or joint life

20 expectancies of the recipient and the recipient’s

21 designated beneficiary, or

22 ‘‘(ii) a period of not less than 10

23 years, or

24 ‘‘(B) which is not described in subparagraph

25 (A) and which—
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1 ‘‘(i) is received in a taxable year for

2 which an election under this subsection is

3 in effect, and

4 ‘‘(ii) is received on or after the date

5 on which the recipient has attained the age

of 591 6 ⁄2,

7 except that the aggregate amount of payments to

8 which this subparagraph may apply for any taxable

9 year shall not exceed $25,000.

10 ‘‘(2) For purposes of paragraph (1), the term ‘quali11 fied plan’ means—

12 ‘‘(A) an employees’ trust described in section

13 401(a) of the Internal Revenue Code of 1986 which

14 is exempt from tax under section 501(a) of such

15 Code,

16 ‘‘(B) a simplified employee pension described in

17 section 408(k) of such Code,

18 ‘‘(C) an annuity plan described in section

19 403(a) of such Code,

20 ‘‘(D) an annuity contract described in section

21 403(b) of such Code,

22 ‘‘(E) an individual retirement plan described in

23 section 7701(a)(37) of such Code,

24 ‘‘(F) an eligible deferred compensation plan

25 under section 457 of such Code, or
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1 ‘‘(G) a governmental plan described in section

2 414(d) of such Code, other than a plan established

3 and maintained by a State or political subdivision of

4 a State, or an agency or instrumentality of either.

5 ‘‘(3)(A) An election under paragraph (1)(B), once

6 made for a taxable year, may not be made for any other

7 taxable year.

8 ‘‘(B) In calendar years beginning after 1993, the

9 $25,000 amount referred to in paragraph (1)(B) shall be

10 increased by an amount equal to such dollar amount, mul11 tiplied by the cost-of-living adjustment determined under

12 section 1(f)(3) of such Code for such calendar year by sub13 stituting ‘calendar year 1992’ for ‘calendar year 1989’ in

14 subparagraph (B) thereof.

15 ‘‘(c) For purposes of subsection (a), the term ‘State’

16 includes any political subdivision of a State, the District

17 of Columbia, and the possessions of the United States.’’

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

19 for such chapter 4 is amended by adding at the end there20 of the following new item:

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

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

22 this section shall apply to taxable years beginning after

23 the date of the enactment of this Act.

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