II 

113TH CONGRESS 

2D SESSION S. 2347 

To amend title 4 of the United States Code to limit the extent to which 

States may tax the compensation earned by nonresident telecommuters 

and other multi-State workers. 

IN THE SENATE OF THE UNITED STATES 

MAY 15, 2014 

Mr. BLUMENTHAL (for himself and Mr. MURPHY) introduced the following 

bill; which was read twice and referred to the Committee on Finance 

A BILL 

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

extent to which States may tax the compensation earned 

by nonresident telecommuters and other multi-State 

workers. 

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 ‘‘Multi-State Worker 

5 Tax Fairness Act of 2014’’. 


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•S 2347 IS

1 SEC. 2. LIMITATION ON STATE TAXATION OF COMPENSA2 TION EARNED BY NONRESIDENT TELECOM3 MUTERS AND OTHER MULTI-STATE WORK4 ERS. 

5 (a) IN GENERAL.—Chapter 4 of title 4, United 

6 States Code, is amended by adding at the end the fol7 lowing: 

8 ‘‘§ 127. Limitation on State taxation of compensation 

9 earned by nonresident telecommuters 

10 and other multi-State workers 

11 ‘‘(a) IN GENERAL.—In applying its income tax laws 

12 to the compensation of a nonresident individual, a State 

13 may deem such nonresident individual to be present in or 

14 working in such State for any period of time only if such 

15 nonresident individual is physically present in such State 

16 for such period and such State may not impose non17 resident income taxes on such compensation with respect 

18 to any period of time when such nonresident individual 

19 is physically present in another State. 

20 ‘‘(b) DETERMINATION OF PHYSICAL PRESENCE.— 

21 For purposes of determining physical presence, no State 

22 may deem a nonresident individual to be present in or 

23 working in such State on the grounds that— 

24 ‘‘(1) such nonresident individual is present at 

25 or working at home for convenience, or 


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•S 2347 IS

1 ‘‘(2) such nonresident individual’s work at 

2 home or office at home fails any convenience of the 

3 employer test or any similar test. 

4 ‘‘(c) DETERMINATION OF PERIODS OF TIME WITH

5 RESPECT TO WHICH COMPENSATION IS PAID.—For pur6 poses of determining the periods of time with respect to 

7 which compensation is paid, no State may deem a period 

8 of time during which a nonresident individual is physically 

9 present in another State and performing certain tasks in 

10 such other State to be— 

11 ‘‘(1) time that is not normal work time unless 

12 such individual’s employer deems such period to be 

13 time that is not normal work time, 

14 ‘‘(2) nonworking time unless such individual’s 

15 employer deems such period to be nonworking time, 

16 or 

17 ‘‘(3) time with respect to which no compensa18 tion is paid unless such individual’s employer deems 

19 such period to be time with respect to which no com20 pensation is paid. 

21 ‘‘(d) DEFINITIONS.—As used in this section— 

22 ‘‘(1) STATE.—The term ‘State’ means each of 

23 the several States (or any subdivision thereof), the 

24 District of Columbia, and any territory or possession 

25 of the United States. 


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1 ‘‘(2) INCOME TAX.—The term ‘income tax’ has 

2 the meaning given such term by section 110(c). 

3 ‘‘(3) INCOME TAX LAWS.—The term ‘income 

4 tax laws’ includes any statutes, regulations, adminis5 trative practices, administrative interpretations, and 

6 judicial decisions. 

7 ‘‘(4) NONRESIDENT INDIVIDUAL.—The term 

8 ‘nonresident individual’ means an individual who is 

9 not a resident of the State applying its income tax 

10 laws to such individual. 

11 ‘‘(5) EMPLOYEE.—The term ‘employee’ means 

12 an employee as defined by the State in which the 

13 nonresident individual is physically present and per14 forming personal services for compensation. 

15 ‘‘(6) EMPLOYER.—The term ‘employer’ means 

16 the person having control of the payment of an indi17 vidual’s compensation. 

18 ‘‘(7) COMPENSATION.—The term ‘compensa19 tion’ means the salary, wages, or other remuneration 

20 earned by an individual for personal services per21 formed as an employee or as an independent con22 tractor. 

23 ‘‘(e) NO INFERENCE.—Nothing in this section shall 

24 be construed as bearing on— 

25 ‘‘(1) any tax laws other than income tax laws, 


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•S 2347 IS

1 ‘‘(2) the taxation of corporations, partnerships, 

2 trusts, estates, limited liability companies, or other 

3 entities, organizations, or persons other than non4 resident individuals in their capacities as employees 

5 or independent contractors, 

6 ‘‘(3) the taxation of individuals in their capac7 ities as shareholders, partners, trust and estate 

8 beneficiaries, members or managers of limited liabil9 ity companies, or in any similar capacities, and 

10 ‘‘(4) the income taxation of dividends, interest, 

11 annuities, rents, royalties, or other forms of un12 earned income.’’. 

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

14 of such chapter 4 is amended by adding at the end the 

15 following new item: 

‘‘127. Limitation on State taxation of compensation earned by nonresident telecommuters and other multi-State workers.’’. 

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

17 this section shall take effect on the date of the enactment 

18 of this Act. 

Æ 


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