I 
109TH CONGRESS 
1ST SESSION H. R. 2558
To amend title 4 of the United States Code to prohibit the double taxation 
of telecommuters and others who work at home. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 23, 2005
Mr. SHAYS (for himself, Ms. DELAURO, and Mr. TOM DAVIS of Virginia) in-
troduced the following bill; which was referred to the Committee on the 
Judiciary 
A BILL 
To amend title 4 of the United States Code to prohibit 
the double taxation of telecommuters and others who 
work at home.
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 2005’’.
SEC. 2. PROHIBITION ON DOUBLE TAXATION OF 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. Prohibition on double taxation of telecom-
muters and others who work at home 
‘‘(a) PHYSICAL PRESENCE REQUIRED.—
‘‘(1) IN GENERAL.—In applying its income tax 
laws to the salary of a nonresident individual, a 
State may only deem such nonresident individual to 
be present in or working in such State for any pe-
riod of time if such nonresident individual is phys-
ically present in such State for such period and such 
State may not impose nonresident income taxes on 
such salary with respect to any period of time when 
such nonresident individual is physically present in 
another State. 
‘‘(2) DETERMINATION
OF
PHYSICAL
PRES-
ENCE.—For purposes of determining physical pres-
ence, no State may deem a nonresident individual to 
be present in or working in such State on the 
grounds that such nonresident individual is present 
at or working at home for the nonresident individ-
ual’s convenience. 
‘‘(b) DEFINITIONS.—As used in this section—
‘‘(1) STATE.—The term ‘State’ includes any po-
litical subdivision of a State, the District of Colum-
bia, and the possessions of the United States. 
‘‘(2) INCOME TAX.—The term ‘income tax’ has 
the meaning given such term by section 110(c). 
‘‘(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) SALARY.—The term ‘salary’ means the 
compensation, wages, or other remuneration earned 
by an individual for personal services performed as 
an employee or as an independent contractor. 
‘‘(c) 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 
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. Prohibition on double taxation of telecommuters and others who work at 
home.’’.
(c) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on the date of enactment of 
this Act.
Æ