II
Calendar No. 296
104TH CONGRESS
1ST SESSION H. R. 394
IN THE SENATE OF THE UNITED STATES
DECEMBER 18, 1995
Received; read twice and referred to the Committee on Finance
DECEMBER 20, 1995
Committee Discharged; ordered to be placed on the calendar
AN ACT
To amend title 4 of the United States Code to limit State
taxation of certain pension income.
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) IN GENERAL.—Chapter 4 of title 4, United
States Code, is amended by adding at the end the follow-
ing:
HR 394 PCS
‘‘§ 114. Limitation on State income taxation of certain
pension income
‘‘(a) No State may impose an income tax on any re-
tirement income of an individual who is not a resident or
domiciliary of such State (as determined under the laws
of such State).
‘‘(b) For purposes of this section—
‘‘(1) The term ‘retirement income’ means any
income from—
‘‘(A) a qualified trust under section 401(a)
of the Internal Revenue Code of 1986 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);
‘‘(H) 
a 
trust 
described 
in 
section
501(c)(18) of such Code; or
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‘‘(I) any plan, program, or arrangement
described in section 3121(v)(2)(C) of such
Code, if such income—
‘‘(i) is part of a series of substantially
equal periodic payments (not less fre-
quently than annually) made for—
‘‘(I) the life or life expectancy of
the recipient (or the joint lives or joint
life expectancies of the recipient and
the designated beneficiary of the re-
cipient), or
‘‘(II) a period of not less than 10
years, or
‘‘(ii) is a payment received after ter-
mination of employment and under a plan,
program, or arrangement (to which such
employment relates) maintained solely for
the purpose of providing retirement bene-
fits for employees in excess of the limita-
tions imposed by 1 or more of sections
401(a)(17), 
401(k), 
401(m), 
402(g),
403(b), 408(k), or 415 of such Code or
any other limitation on contributions or
benefits in such Code on plans to which
any of such sections apply.
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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.
‘‘(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, 1995.
Passed the House of Representatives December 18
(legislative day, December 15), 1995.
Attest:
ROBIN H. CARLE,
Clerk.