Calendar No. 296

104TH CONGRESS

1ST SESSION H. R. 394

AN ACT

To amend title 4 of the United States Code to limit

State taxation of certain pension income.

DECEMBER 20, 1995

Order to be placed on the calendar
II

Calendar No. 296

104TH CONGRESS

1ST SESSION H. R. 394

IN THE SENATE OF THE UNITED STATES

DECEMBER 18, 1995

Received; read twice and referred to the Committee on Finance

DECEMBER 20, 1995

Committee Discharged; ordered to be placed on the calendar

AN ACT

To amend title 4 of the United States Code to limit State

taxation of certain pension income.

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) IN GENERAL.—Chapter 4 of title 4, United

6 States Code, is amended by adding at the end the follow7 ing:
2

HR 394 PCS

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

2 pension income

3 ‘‘(a) No State may impose an income tax on any re4 tirement income of an individual who is not a resident or

5 domiciliary of such State (as determined under the laws

6 of such State).

7 ‘‘(b) For purposes of this section—

8 ‘‘(1) The term ‘retirement income’ means any

9 income from—

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

11 of the Internal Revenue Code of 1986 that is

12 exempt under section 501(a) from taxation;

13 ‘‘(B) a simplified employee pension as de14 fined in section 408(k) of such Code;

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

16 403(a) of such Code;

17 ‘‘(D) an annuity contract described in sec18 tion 403(b) of such Code;

19 ‘‘(E) an individual retirement plan de20 scribed in section 7701(a)(37) of such Code;

21 ‘‘(F) an eligible deferred compensation

22 plan (as defined in section 457 of such Code);

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

24 section 414(d) of such Code);

25 ‘‘(H) a trust described in section

26 501(c)(18) of such Code; or
3

HR 394 PCS

1 ‘‘(I) any plan, program, or arrangement

2 described in section 3121(v)(2)(C) of such

3 Code, if such income—

4 ‘‘(i) is part of a series of substantially

5 equal periodic payments (not less fre6 quently than annually) made for—

7 ‘‘(I) the life or life expectancy of

8 the recipient (or the joint lives or joint

9 life expectancies of the recipient and

10 the designated beneficiary of the re11 cipient), or

12 ‘‘(II) a period of not less than 10

13 years, or

14 ‘‘(ii) is a payment received after ter15 mination of employment and under a plan,

16 program, or arrangement (to which such

17 employment relates) maintained solely for

18 the purpose of providing retirement bene19 fits for employees in excess of the limita20 tions imposed by 1 or more of sections

21 401(a)(17), 401(k), 401(m), 402(g),

22 403(b), 408(k), or 415 of such Code or

23 any other limitation on contributions or

24 benefits in such Code on plans to which

25 any of such sections apply.
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HR 394 PCS

1 Such term includes any retired or retainer pay of a

2 member or former member of a uniform service com3 puted under chapter 71 of title 10, United States

4 Code.

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

6 given such term by section 110(c).

7 ‘‘(3) The term ‘State’ includes any political sub8 division of a State, the District of Columbia, and the

9 possessions of the United States.

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 sec14 tions for chapter 4 of title 4, United States Code, is

15 amended 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

17 this section shall apply to amounts received after Decem18 ber 31, 1995.

Passed the House of Representatives December 18

(legislative day, December 15), 1995.

Attest: ROBIN H. CARLE,

Clerk.