II 

112TH CONGRESS 

2D SESSION S. 3485 

To limit the authority of States to tax certain income of employees for 

employment duties performed in other States. 

IN THE SENATE OF THE UNITED STATES 

AUGUST 2, 2012 

Mr. BROWN of Ohio introduced the following bill; which was read twice and 

referred to the Committee on Finance 

A BILL 

To limit the authority of States to tax certain income of 

employees for employment duties performed in other States. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Mobile Workforce 

5 State Income Tax Simplification Act of 2012’’. 

6 SEC. 2. LIMITATIONS ON STATE WITHHOLDING AND TAX7 ATION OF EMPLOYEE INCOME. 

8 (a) IN GENERAL.—No part of the wages or other re9 muneration earned by an employee who performs employVerDate Mar 15 2010 06:44 Aug 07, 2012 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S3485.IS S3485

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1 ment duties in more than one State shall be subject to 

2 income tax in any State other than— 

3 (1) the State of the employee’s residence; and 

4 (2) the State within which the employee is 

5 present and performing employment duties for more 

6 than 30 days during the calendar year in which the 

7 wages or other remuneration is earned. 

8 (b) WAGES OR OTHER REMUNERATION.—Wages or 

9 other remuneration earned in any calendar year shall not 

10 be subject to State income tax withholding and reporting 

11 requirements unless the employee is subject to income tax 

12 in such State under subsection (a). Income tax with13 holding and reporting requirements under subsection 

14 (a)(2) shall apply to wages or other remuneration earned 

15 as of the commencement date of employment duties in the 

16 State during the calendar year. 

17 (c) OPERATING RULES.—For purposes of deter18 mining penalties related to an employer’s State income tax 

19 withholding and reporting requirements— 

20 (1) an employer may rely on an employee’s an21 nual determination of the time expected to be spent 

22 by such employee in the States in which the em23 ployee will perform duties absent— 


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1 (A) the employer’s actual knowledge of 

2 fraud by the employee in making the determina3 tion; or 

4 (B) collusion between the employer and the 

5 employee to evade tax; 

6 (2) except as provided in paragraph (3), if 

7 records are maintained by an employer in the reg8 ular course of business that record the location of an 

9 employee, such records shall not preclude an employ10 er’s ability to rely on an employee’s determination 

11 under paragraph (1); and 

12 (3) notwithstanding paragraph (2), if an em13 ployer, at its sole discretion, maintains a time and 

14 attendance system that tracks where the employee 

15 performs duties on a daily basis, data from the time 

16 and attendance system shall be used instead of the 

17 employee’s determination under paragraph (1). 

18 (d) DEFINITIONS AND SPECIAL RULES.—For pur19 poses of this Act: 

20 (1) DAY.— 

21 (A) Except as provided in subparagraph 

22 (B), an employee is considered present and per23 forming employment duties within a State for a 

24 day if the employee performs more of the emVerDate Mar 15 2010 06:44 Aug 07, 2012 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S3485.IS S3485

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1 ployee’s employment duties within such State 

2 than in any other State during a day. 

3 (B) If an employee performs employment 

4 duties in a resident State and in only one non5 resident State during one day, such employee 

6 shall be considered to have performed more of 

7 the employee’s employment duties in the non8 resident State than in the resident State for 

9 such day. 

10 (C) For purposes of this paragraph, the 

11 portion of the day during which the employee is 

12 in transit shall not be considered in determining 

13 the location of an employee’s performance of 

14 employment duties. 

15 (2) EMPLOYEE.—The term ‘‘employee’’ has the 

16 same meaning given to it by the State in which the 

17 employment duties are performed, except that the 

18 term ‘‘employee’’ shall not include a professional 

19 athlete, professional entertainer, or certain public 

20 figures. 

21 (3) PROFESSIONAL ATHLETE.—The term ‘‘pro22 fessional athlete’’ means a person who performs 

23 services in a professional athletic event, provided 

24 that the wages or other remuneration are paid to 


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1 such person for performing services in his or her ca2 pacity as a professional athlete. 

3 (4) PROFESSIONAL ENTERTAINER.—The term 

4 ‘‘professional entertainer’’ means a person who per5 forms services in the professional performing arts 

6 for wages or other remuneration on a per-event 

7 basis, provided that the wages or other remuneration 

8 are paid to such person for performing services in 

9 his or her capacity as a professional entertainer. 

10 (5) CERTAIN PUBLIC FIGURES.—The term 

11 ‘‘certain public figures’’ means persons of promi12 nence who perform services for wages or other remu13 neration on a per-event basis, provided that the 

14 wages or other remuneration are paid to such person 

15 for services provided at a discrete event, in the na16 ture of a speech, public appearance, or similar event. 

17 (6) EMPLOYER.—The term ‘‘employer’’ has the 

18 meaning given such term in section 3401(d) of the 

19 Internal Revenue Code of 1986 (26 U.S.C. 3401(d)), 

20 unless such term is defined by the State in which 

21 the employee’s employment duties are performed, in 

22 which case the State’s definition shall prevail. 

23 (7) STATE.—The term ‘‘State’’ means any of 

24 the several States. 


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1 (8) TIME AND ATTENDANCE SYSTEM.—The 

2 term ‘‘time and attendance system’’ means a system 

3 in which— 

4 (A) the employee is required on a contem5 poraneous basis to record his work location for 

6 every day worked outside of the State in which 

7 the employee’s employment duties are primarily 

8 performed; and 

9 (B) the system is designed to allow the em10 ployer to allocate the employee’s wages for in11 come tax purposes among all States in which 

12 the employee performs employment duties for 

13 such employer. 

14 (9) WAGES OR OTHER REMUNERATION.—The 

15 term ‘‘wages or other remuneration’’ may be limited 

16 by the State in which the employment duties are 

17 performed. 

18 SEC. 3. EFFECTIVE DATE; APPLICABILITY. 

19 (a) EFFECTIVE DATE.—This Act shall take effect on 

20 January 1 of the 2d year that begins after the date of 

21 the enactment of this Act. 

22 (b) APPLICABILITY.—This Act shall not apply to any 

23 tax obligation that accrues before the effective date of this 

24 Act. 

Æ 


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