Remote and Mobile Worker Relief Act of 2020

To limit the authority of States or other taxing jurisdictions to tax certain income of employees for employment duties performed in other States or taxing jurisdictions, and for other purposes. 1. Short title This Act may be cited as the Remote and Mobile Worker Relief Act of 2020 2. Limitations on withholding and taxation of employee income (a) In general No part of the wages or other remuneration earned by an employee who performs employment duties in more than one taxing jurisdiction shall be subject to income tax in any taxing jurisdiction other than— (1) the taxing jurisdiction of the employee’s residence; and (2) the taxing jurisdiction within which the employee is present and performing employment duties for more than 30 days during the calendar year in which the wages or other remuneration is earned. (b) Wages or other remuneration Wages or other remuneration earned in any calendar year shall not be subject to income tax withholding and reporting requirements with respect to any taxing jurisdiction unless the employee is subject to income tax in such taxing jurisdiction under subsection (a). Income tax withholding and reporting requirements under subsection (a)(2) shall apply to wages or other remuneration earned as of the commencement date of employment duties in the taxing jurisdiction during the calendar year. (c) Operating rules For purposes of determining penalties related to an employer’s income tax withholding and reporting requirements with respect to any taxing jurisdiction— (1) an employer may rely on an employee’s annual determination of the time expected to be spent by such employee in the taxing jurisdictions in which the employee will perform duties absent— (A) the employer’s actual knowledge of fraud by the employee in making the determination; or (B) collusion between the employer and the employee to evade tax; (2) except as provided in paragraph (3), if records are maintained by an employer in the regular course of business that record the location of an employee, such records shall not preclude an employer’s ability to rely on an employee’s determination under paragraph (1); and (3) notwithstanding paragraph (2), if an employer, at its sole discretion, maintains a time and attendance system that tracks where the employee performs duties on a daily basis, data from the time and attendance system shall be used instead of the employee’s determination under paragraph (1). (d) Definitions and special rules For purposes of this Act: (1) Day (A) Except as provided in subparagraph (B), an employee is considered present and performing employment duties within a taxing jurisdiction for a day if the employee performs more of the employee’s employment duties within such taxing jurisdiction than in any other taxing jurisdiction during a day. (B) If an employee performs employment duties in a resident taxing jurisdiction and in only one nonresident taxing jurisdiction during one day, such employee shall be considered to have performed more of the employee’s employment duties in the nonresident taxing jurisdiction than in the resident taxing jurisdiction for such day. (C) For purposes of this paragraph, the portion of the day during which the employee is in transit shall not be considered in determining the location of an employee’s performance of employment duties. (2) Employee The term employee employee (3) Professional athlete The term professional athlete (4) Professional entertainer The term professional entertainer (5) Qualified production employee The term qualified production employee (6) Certain public figures The term certain public figures (7) Employer The term employer section 3401(d) 26 U.S.C. 3401(d) (8) Taxing jurisdiction The term taxing jurisdiction (9) Time and attendance system The term time and attendance system (A) the employee is required on a contemporaneous basis to record his work location for every day worked outside of the taxing jurisdiction in which the employee’s employment duties are primarily performed; and (B) the system is designed to allow the employer to allocate the employee’s wages for income tax purposes among all taxing jurisdictions in which the employee performs employment duties for such employer. (10) Wages or other remuneration The term wages or other remuneration (e) Adjustment during coronavirus pandemic With respect to calendar year 2020, in the case of any employee who performs employment duties in any taxing jurisdiction other than the taxing jurisdiction of the employee’s residence during such year as a result of the COVID–19 public health emergency, subsection (a)(2) shall be applied by substituting 90 days 30 days 3. State and local tax certainty (a) Status of employees during covered period Notwithstanding section 2(a)(2) or any provision of law of a taxing jurisdiction, with respect to any employee who is working remotely within such taxing jurisdiction during the covered period— (1) except as provided under paragraph (2), any wages earned by such employee during such period shall be deemed to have been earned at the primary work location of such employee; and (2) if an employer, at its sole discretion, maintains a system that tracks where such employee performs duties on a daily basis, wages earned by such employee may, at the election of such employer, be treated as earned at the location in which such duties were remotely performed. (b) Status of businesses during covered period Notwithstanding any provision of law of a taxing jurisdiction— (1) in the case of an out-of-state business which has any employees working remotely within such jurisdiction during the covered period, the duties performed by such employees within such jurisdiction during such period shall not be sufficient to create any nexus or establish any minimum contacts or level of presence that would otherwise subject such business to any registration, taxation, or other related requirements for businesses operating within such jurisdiction; and (2) except as provided under subsection (a)(2), with respect to any tax imposed by such taxing jurisdiction which is determined, in whole or in part, based on net or gross receipts or income, for purposes of apportioning or sourcing such receipts or income, any duties performed by an employee of an out-of-state business while working remotely during the covered period— (A) shall be disregarded with respect to any filing requirements for such tax; and (B) shall be apportioned and sourced to the tax jurisdiction which includes the primary work location of such employee. (c) Definitions For purposes of this section— (1) Covered period The term covered period (A) beginning on the date on which such employee began working remotely; and (B) ending on the earlier of— (i) the date on which the employer allows, at the same time— (I) such employee to return to their primary work location; and (II) not less than 90 percent of their permanent workforce to return to such work location; or (ii) December 31, 2020. (2) Employee The term employee (3) Employer The term employer (4) Out-of-state business The term out-of-state business (5) Primary work location The term primary work location (6) Taxing jurisdiction The term taxing jurisdiction (7) Wages The term wages (8) Working remotely The term working remotely COVID–19 (A) to comply with any government order relating to COVID–19; (B) to prevent the spread of COVID–19; and (C) due to the employee or a member of the employee's family contracting COVID–19. (d) Preservation of authority of taxing jurisdictions This section shall not be construed as modifying, impairing, superseding, or authorizing the modification, impairment, or supersession of the law of any taxing jurisdiction pertaining to taxation except as expressly provided in subsections (a) through (c). 4. Effective date; applicability (a) Effective date This Act shall apply to calendar years beginning after December 31, 2019. (b) Applicability This Act shall not apply to any tax obligation that accrues before January 1, 2020.

Summary: Remote and Mobile Worker Relief Act of 2020 This bill prohibits the wages or other remuneration earned by an employee who performs employment duties in more than one taxing jurisdiction (i.e., states, localities, the District of Columbia, territories or possessions) from being subject to income tax in any other taxing jurisdiction other than (1) the taxing jurisdiction of the employee's residence, and (2) the taxing jurisdiction within which the employee is present and performing employment duties for more than 30 days during the calendar year in which the wages or remuneration are earned. The 30-day requirement is extended to 90 days in 2020 for employees performing duties outside the taxing jurisdiction of their residence during the COVID-19 (i.e., coronavirus disease 2019) pandemic. The bill exempts employers from income tax withholding and information reporting requirements for employees not subject to income tax in the taxing jurisdiction. For purposes of determining penalties related to withholding and information reporting requirements, an employer may rely on an employee's annual determination of the time expected to be spent in the taxing jurisdiction in the absence of the employer's actual knowledge of fraud or collusion between the employer and employee to evade tax. For the purposes of this bill, the term employee excludes professional athletes, professional entertainers, production employees who perform services in connection with certain film, television, or other commercial video productions, and public figures who are persons of prominence who perform services for wages or other remuneration on a per-event basis. The bill also sets forth a rule for the classification of wages earned by employees working remotely.