Mobile Workforce State Income Tax Simplification Act of 2019

To limit the authority of States to tax certain income of employees for employment duties performed in other States. 1. Short title This Act may be cited as the Mobile Workforce State Income Tax Simplification Act of 2019 2. Limitations on State 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 State shall be subject to income tax in any State other than— (1) the State of the employee’s residence; and (2) the State 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 State income tax withholding and reporting requirements unless the employee is subject to income tax in such State 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 State during the calendar year. (c) Operating rules For purposes of determining penalties related to an employer’s State income tax withholding and reporting requirements— (1) an employer may rely on an employee’s annual determination of the time expected to be spent by such employee in the States 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 State for a day if the employee performs more of the employee’s employment duties within such State than in any other State during a day. (B) If an employee performs employment duties in a resident State and in only one nonresident State during one day, such employee shall be considered to have performed more of the employee’s employment duties in the nonresident State than in the resident State 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) State The term State (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 State 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 States in which the employee performs employment duties for such employer. (10) Wages or other remuneration The term wages or other remuneration 3. Effective date; applicability (a) Effective date This Act shall take effect on January 1 of the second calendar year that begins after the date of the enactment of this Act. (b) Applicability This Act shall not apply to any tax obligation that accrues before the effective date of this Act.

Summary: Mobile Workforce State Income Tax Simplification Act of 2019 This bill prohibits the wages or other remuneration earned by an employee who performs employment duties in more than one state from being subject to income tax in any state other than (1) the state of the employee's residence, and (2) the state within which the employee is present and performing employment duties for more than 30 days during the calendar year. The bill exempts employers from state income tax withholding and information reporting requirements for employees not subject to income tax in the state under this bill. For the purposes of determining penalties related to an employer's state income tax withholding or reporting requirements, an employer may rely on an employee's annual determination of the time expected to be spent working in a state in the absence of fraud or collusion by such employee. 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.