I 
112TH CONGRESS 
2D SESSION 
H. R. 5615 
To amend title 4 of the United States Code to limit the extent to which 
States may tax the compensation earned by nonresident telecommuters. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 8, 2012 
Mr. HIMES (for himself and Mr. MURPHY of Connecticut) introduced the 
following bill; which was referred to the Committee on the Judiciary 
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. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Telecommuter Tax 
Fairness Act of 2012’’. 
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SEC. 2. LIMITATION ON STATE TAXATION OF COMPENSA-
TION EARNED BY NONRESIDENT TELECOM-
MUTERS. 
(a) IN GENERAL.—Chapter 4 of title 4, United 
States Code, is amended by adding at the end the fol-
lowing new section: 
‘‘§ 127. Limitation on State taxation of compensation 
earned by nonresident telecommuters 
‘‘(a) IN GENERAL.—In applying its income tax laws 
to the compensation of a nonresident individual, a State 
may deem such nonresident individual to be present in or 
working in such State for any period of time only if such 
nonresident individual is physically present in such State 
for such period and such State may not impose non-
resident income taxes on such compensation with respect 
to any period of time when such nonresident individual 
is physically present in another State. 
‘‘(b) DETERMINATION OF PHYSICAL PRESENCE.— 
For purposes of determining physical presence, no State 
may deem a nonresident individual to be present in or 
working in such State on the grounds that— 
‘‘(1) such nonresident individual is present at 
or working at home for convenience, or 
‘‘(2) such nonresident individual’s work at 
home or office at home fails any convenience of the 
employer test or any similar test. 
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‘‘(c) DETERMINATION OF PERIODS OF TIME WITH 
RESPECT TO WHICH COMPENSATION IS PAID.—For pur-
poses of determining the periods of time with respect to 
which compensation is paid, no State may deem a period 
of time during which a nonresident individual is physically 
present in another State and performing certain tasks in 
such other State to be— 
‘‘(1) time that is not normal work time unless 
such individual’s employer deems such period to be 
time that is not normal work time, 
‘‘(2) nonworking time unless such individual’s 
employer deems such period to be nonworking time, 
or 
‘‘(3) time with respect to which no compensa-
tion is paid unless such individual’s employer deems 
such period to be time with respect to which no com-
pensation is paid. 
‘‘(d) DEFINITIONS.—As used in this section— 
‘‘(1) STATE.—The term ‘State’ means each of 
the several States (or any subdivision thereof), the 
District of Columbia, and any territory or possession 
of the United States. 
‘‘(2) INCOME TAX.—The term ‘income tax’ has 
the meaning given such term by section 110(c). 
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‘‘(3) INCOME
TAX
LAWS.—The term ‘income 
tax laws’ includes any statutes, regulations, adminis-
trative practices, administrative interpretations, and 
judicial decisions. 
‘‘(4) NONRESIDENT
INDIVIDUAL.—The term 
‘nonresident individual’ means an individual who is 
not a resident of the State applying its income tax 
laws to such individual. 
‘‘(5) EMPLOYEE.—The term ‘employee’ means 
an employee as defined by the State in which the 
nonresident individual is physically present and per-
forming personal services for compensation. 
‘‘(6) EMPLOYER.—The term ‘employer’ means 
the person having control of the payment of an indi-
vidual’s compensation. 
‘‘(7) COMPENSATION.—The term ‘compensa-
tion’ means the salary, wages, or other remuneration 
earned by an individual for personal services per-
formed as an employee or as an independent con-
tractor. 
‘‘(e) NO INFERENCE.—Nothing in this section shall 
be construed as bearing on— 
‘‘(1) any tax laws other than income tax laws, 
‘‘(2) the taxation of corporations, partnerships, 
trusts, estates, limited liability companies, or other 
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entities, organizations, or persons other than non-
resident individuals in their capacities as employees 
or independent contractors, 
‘‘(3) the taxation of individuals in their capac-
ities as shareholders, partners, trust and estate 
beneficiaries, members or managers of limited liabil-
ity companies, or in any similar capacities, and 
‘‘(4) the income taxation of dividends, interest, 
annuities, rents, royalties, or other forms of un-
earned income.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
of such chapter 4 is amended by adding at the end the 
following new item: 
‘‘127. Limitation on State taxation of compensation earned by nonresident tele-
commuters.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on the date of the enactment 
of this Act. 
Æ 
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