JIM MATTOX Attorney General

Supreme Court Building P. 0. BOX 12548 Aus!in. TX. 78711. 2548 5121475.2501 Telex 9101874.13S7 Telecopier 5121475.0266

714 Jackson, Suite 700 Dallas, TX. 75202.4506 214l742.8944

4824 Alberta Ave., Suite 160 El Paso, TX. 79905.2793 915/533-3464

1001 Texas. Suite 700 Houston, TX. 77002~3111 713/2235&W

906 Broadway, Suite 312 Lubbock, TX. 79401.3479 8061747.5238

43G3 N. Tenth, Suite S McAllen, TX. 78501-1685 512M2.4547

200 Main Plaza, Suite 400 San Antonio, TX. 78205.2797 512m54191

An Equal Opportunity/ Affirmative Action EmplOYer 

# The Attorney General of Texas

Iecember 30, 1985

HonorableLloyd Cr,iss OpinionNo. JM-411 chairmen Committee on Labor, and Re: Whether a neighboring state is EmploymentRela.tions prohibited from withholding state Texas House of Representatives income taxpayments from the salary P. 0. Box 2910 of an employee who is a permanent Austin, Texas 7f769 resident of Texas but who works partially or temporarily in the neighboring state Dear Representatiw Criss:
You have submitted the following request regarding the withholding of state income tax from,the pay of certain railroad employeeswho are Texas residents:

Individuals living in Texas and working for railroad,8are often required to travel through several states in the course of their daily employmsnt. Some of these states, notably the neighboring states of Oklahoma and New Mexico, require the railroad to withhold state income taxes from the pay of these workers, despite the fact t'iat these individuals maintain their permaner,t

residence in Texas. This practice seems tobe inherentlyunfair. I would s,ppreciateyour offering an opinion on whether any laws of this state or of the United States prevent this practice of withholding state income tax from the pay of an employee whose permanert residence is sot in that state,but who is mere1.y

working for some period of time in the state ir.the course ofhis/her employment. We are compelled to conclude that the railroad carriers in question are required towl.thholdsuch taxes from thepay of certainworkers. 49 U.S.C., sc.ction 11504,provides, inpart, as follows:

p. 1881Honorable Lloyd Criss - Pa(:e2 (JM-411)

(a)(l) In this subsection,an employee is deemed to have earned nor+ than 50 percent of pay in a State or subdivilij.on of a State if the employee -- (A) performs regularly assigned duties on a. locomotive,CIU:

or other track-bornevehicle in at least 2 St:atesand the mileage traveled in one State or subdivision of that State is more than 50 percent of the total mileage traveled by the employee while employed during the calendaryear;

. . . . (2) A rail, express, or sleeping car carrier providing transportation subject the jurisdictionof theInterstateCommerceC~ission under subchapter I of chapter 105 of this title [49USCS 1510501 et seq.] shallwithhold from the pay of an employeereferred to inparagraph (1)of this subsection <onlyincome tax required to be withheldby the lawsof a State, or subdivisionof that State - (A) in which the employee earns more than 50 percent of the pay received by the employee from the carrLer;or (B) that is the residence of the employee (as shown on thme employment records of the carrier), if t:heemployee did not earn in one State or sub3:Lvision more than 50 percent of the pay reorived by the employee from the carrierduring thepreceding calendaryear. Thus. federal law ex~~licitly establishes the standardupon which the requirements of withholding state taxes by rail carriers are based. So long as thg! railroads comply with the legislative determination regarding w'v~re"an employee is deemed to have earned more than 50 percent of p,yr,"it is apparent that the withholding by the railroad of state income taxes is authorizedby the state inwhich an employee is deemed to have earnedwithholding.

SUMMARY Rail carrier:! are required to withhold income taxes from the pay of an employeewhose residence is Texas if scch employee is correctly deemed

p. 1882HonorableLloyd Criss - Page 3 (JM-411)

under federal law to have earned more than 50 percent of pay in a state which imposes such taxes.

JIM MATTOX Attorney General of Texas JACXHIGRTOWBR FirstAssistantAttorney Gmeral
MARY KELLER ExecutiveAssistantAttornsy General ROBERT GRAY SpecialAssistant lfttorney(General
RICK GILPIN Chairman,Opinion Committee Preparedby Colin Carl AssistantAttorney General

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