IIA
103D CONGRESS
2D SESSION
H. R. 546
IN THE SENATE OF THE UNITED STATES
OCTOBER 3 (legislative day, SEPTEMBER 12), 1994
Received
OCTOBER 8 (legislative day, SEPTEMBER 12), 1994
Read twice and referred to the Committee on Finance
AN ACT
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 INCOME TAXATION OF
CERTAIN PENSION INCOME.
(a) AMENDMENT.—Chapter 4 of title 4, United
States Code, is amended by adding at the end the follow-
ing:
‘‘§ 114. Limitation on State income taxation of certain
pension income
‘‘(a) Except as provided in subsection (b), no State
may impose an income tax on any qualified pension in-
come of an individual who is not a resident or domiciliary
of such State (as determined under the laws of such
State).
‘‘(b)(1) Subsection (a) shall not apply to the extent
that the aggregate amount of qualified pension income of
an individual for any calendar year exceeds $30,000.
There shall not be taken into account under the preceding
sentence any amount which is exempt from State taxation
by reason of other Federal law.
‘‘(2) If more than 1 State would (but for this section)
impose an income tax on qualified pension income received
by an individual during a calendar year, the dollar amount
otherwise applicable under paragraph (1) for such cal-
endar year shall be allocated among such States in such
amounts as such individual may determine.
‘‘(3) If more than 1 individual receives qualified pen-
sion income during a calendar year which is attributable
to services performed by 1 individual—
‘‘(A) all such individuals receiving such income
shall be treated as 1 individual, and
‘‘(B) the dollar amount applicable under para-
graph (1) shall be allocated among such individuals
in proportion to their respective shares of such in-
come received during such calendar year.
‘‘(c) For purposes of this section:
‘‘(1) The term ‘qualified pension income’ means
any income from—
‘‘(A) a qualified trust under section 401(a)
of the Internal Revenue Code that is exempt
under section 501(a) from taxation;
‘‘(B) a simplified employee pension as de-
fined 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 sec-
tion 403(b) of such Code;
‘‘(E) an individual retirement plan de-
scribed in section 7701(a)(37) of such Code;
‘‘(F) an eligible deferred compensation
plan (as defined in section 457 of such Code);
‘‘(G) a governmental plan (as defined in
section 414(d) of such Code); or
‘‘(H) 
a 
trust 
described 
in 
section
501(c)(18) of such Code.
Such term includes any retired or retainer pay of a
member or former member of a uniform service com-
puted under chapter 71 of title 10, United States
Code.
‘‘(2) The term ‘income tax’ has the meaning
given such term by section 110(c).
‘‘(3) The term ‘State’ includes any political sub-
division of a State, the District of Columbia, and the
possessions of the United States.
‘‘(d) In the case of any calendar year after 1995, the
dollar amount contained in subsection (b) shall be in-
creased by the amount determined by the Secretary of the
Treasury to be equal to such dollar amount, multiplied
by the cost-of-living adjustment determined under section
1(f)(3) of such Code by substituting ‘calendar year 1994’
for ‘calendar year 1992’ in subparagraph (B) thereof. If
any increase determined under the preceding sentence is
not a multiple of $1,000, such increase shall be rounded
to the nearest multiple of $1,000. Not later than Decem-
ber 1 of each calendar year, the Secretary of the Treasury
shall publish in the Federal Register the amount deter-
mined under this subsection which is applicable to the fol-
lowing calendar year.
‘‘(e) Nothing in this section shall be construed as hav-
ing any effect on the application of section 514 of the Em-
ployee Retirement Income Security Act of 1974.’’
(b) CONFORMING AMENDMENT.—The table of sec-
tions for chapter 4 of title 4, United States Code, is
amended by adding at the end the following:
‘‘114. Limitation on State income taxation of certain pension income.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to amounts received after Decem-
ber 31, 1994.
Passed the House of Representatives October 3,
1994.
Attest:
DONNALD K. ANDERSON,
Clerk.