I
104TH CONGRESS
1ST SESSION
H. R. 744
To limit State taxation of certain pension income, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 30, 1995
Mr. PICKETT introduced the following bill; which was referred to the
Committee on the Judiciary
A BILL
To limit State taxation of certain pension income, and for
other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. LIMITATION ON STATE TAXATION OF CERTAIN
PENSION INCOME.
(a) IN GENERAL.—Chapter 4 of title 4, United
States Code, is amended by adding at the end the follow-
ing new section:
‘‘§ 114. Limitation on State income taxation of pen-
sion income
‘‘(a) No State may impose an income tax (as defined
in section 110(c)) on the qualified pension income of any
individual who is not a resident or domiciliary of such
State.
‘‘(b)(1) For purposes of subsection (a), the term
‘qualified pension income’ means any payment from a
qualified plan—
‘‘(A) which 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 recipi-
ent or for the joint lives or joint life
expectancies of the recipient and the recipient’s
designated beneficiary, or
‘‘(ii) a period of not less than 10 years, or
‘‘(B) which is not described in subparagraph
(A) and which—
‘‘(i) is received in a taxable year for
which an election under this subsection is
in effect, and
‘‘(ii) is received on or after the date
on which the recipient has attained the age
of 591⁄2,
except that the aggregate amount of payments to
which this subparagraph may apply for any taxable
year shall not exceed $25,000.
‘‘(2) For purposes of paragraph (1), the term ‘quali-
fied plan’ means—
‘‘(A) an employees’ trust described in section
401(a) of the Internal Revenue Code of 1986 which
is exempt from tax under section 501(a) of such
Code,
‘‘(B) a simplified employee pension described 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
under section 457 of such Code, or
‘‘(G) a governmental plan described in section
414(d) of such Code, other than a plan established
and maintained by a State or political subdivision of
a State, or an agency or instrumentality of either.
‘‘(3)(A) An election under paragraph (1)(B), once
made for a taxable year, may not be made for any other
taxable year.
‘‘(B)(i) If more than 1 State would (but for para-
graph (1)(B)) impose an income tax on qualified pension
income received by an individual during a taxable year,
the dollar amount otherwise applicable under paragraph
(1)(B) for such taxable year shall be allocated among such
States in such amounts as such individual may determine.
‘‘(ii) The Secretary of the Treasury shall prescribe
regulations for the application of paragraph (1)(B) in any
case in which more than 1 individual receive qualified pen-
sion income during a taxable year which is attributable
to services performed by 1 individual.
‘‘(C) In calendar years beginning after 1995, the
$25,000 amount referred to in paragraph (1)(B) shall be
increased by an amount equal to such dollar amount, mul-
tiplied by the cost-of-living adjustment determined under
section 1(f)(3) of such Code for such calendar year by sub-
stituting ‘calendar year 1994’ for ‘calendar year 1992’ in
subparagraph (B) thereof.
‘‘(c) For purposes of subsection (a), the term ‘State’
includes any political subdivision of a State, the District
of Columbia, and the possessions of the United States.’’
(b) CLERICAL AMENDMENT.—The table of sections
for such chapter 4 is amended by adding at the end the
following new item:
‘‘114. Limitation on State income taxation of pension income.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
the date of the enactment of this Act.
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