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[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 394 Engrossed in House (EH)]

  1st Session

                               H. R. 394

_______________________________________________________________________

                                 AN ACT

 To amend title 4 of the United States Code to limit State taxation of 
                        certain pension income.
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
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.

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

SECTION 1. LIMITATION ON STATE INCOME TAXATION OF CERTAIN PENSION 
              INCOME.

    (a) In General.--Chapter 4 of title 4, United States Code, is 
amended by adding at the end the following:
``Sec. 114. Limitation on State income taxation of certain pension 
              income
    ``(a) No State may impose an income tax on any retirement income of 
an individual who is not a resident or domiciliary of such State (as 
determined under the laws of such State).
    ``(b) For purposes of this section--
            ``(1) The term `retirement income' means any income from--
                    ``(A) a qualified trust under section 401(a) of the 
                Internal Revenue Code of 1986 that is exempt under 
                section 501(a) from taxation;
                    ``(B) a simplified employee pension as defined in 
                section 408(k) of such Code;
                    ``(C) an annuity plan described in section 403(a) 
                of such Code;
                    ``(D) an annuity contract described in section 
                403(b) of such Code;
                    ``(E) an individual retirement plan described in 
                section 7701(a)(37) of such Code;
                    ``(F) an eligible deferred compensation plan (as 
                defined in section 457 of such Code);
                    ``(G) a governmental plan (as defined in section 
                414(d) of such Code);
                    ``(H) a trust described in section 501(c)(18) of 
                such Code; or
                    ``(I) any plan, program, or arrangement described 
                in section 3121(v)(2)(C) of such Code, if such income--
                            ``(i) is part of a series of substantially 
                        equal periodic payments (not less frequently 
                        than annually) made for--
                                    ``(I) the life or life expectancy 
                                of the recipient (or the joint lives or 
                                joint life expectancies of the 
                                recipient and the designated 
                                beneficiary of the recipient), or
                                    ``(II) a period of not less than 10 
                                years, or
                            ``(ii) is a payment received after 
                        termination of employment and under a plan, 
                        program, or arrangement (to which such 
                        employment relates) maintained solely for the 
                        purpose of providing retirement benefits for 
                        employees in excess of the limitations imposed 
                        by 1 or more of sections 401(a)(17), 401(k), 
                        401(m), 402(g), 403(b), 408(k), or 415 of such 
                        Code or any other limitation on contributions 
                        or benefits in such Code on plans to which any 
                        of such sections apply.
        Such term includes any retired or retainer pay of a member or 
        former member of a uniform service computed under chapter 71 of 
        title 10, United States Code.
            ``(2) The term `income tax' has the meaning given such term 
        by section 110(c).
            ``(3) The term `State' includes any political subdivision 
        of a State, the District of Columbia, and the possessions of 
        the United States.
    ``(e) Nothing in this section shall be construed as having any 
effect on the application of section 514 of the Employee Retirement 
Income Security Act of 1974.''.
    (b) Conforming Amendment.--The table of sections for chapter 4 of 
title 4, United States Code, is amended by adding at the end the 
following:

``114. Limitation on State income taxation of certain pension income''.
    (c) Effective Date.--The amendments made by this section shall 
apply to amounts received after December 31, 1995.

            Passed the House of Representatives December 18 
      (legislative day, December 15), 1995.

            Attest:

                                                                 Clerk.
```