Date: 2012-05-15
Speaker: JACKSON LEE (democrat)
Chamber: H
State: Texas

Madam Speaker. I rise in strong support of H.R. 1864. The Mobile Workforce State Income Tax Simplification Act of 2011. This is a commonsense. bipartisan piece of legislation. Every day millions of American workers travel outside their home state for business purposes. Each state into which they travel has its own set of unique requirements for filing a nonresident personal income tax return. As a result. in addition to filing a federal and any applicable home state income tax returns. these workers may be legally required to file an income tax return and pay nonresident state taxes in virtually every other state into which they have travelled. H.R. 1864. the "Mobile Workforce State Income Tax Simplification Act of 2011." would simplify the onerous burdens placed on employees who travel outside their resident states for temporary periods and on employers who have corresponding withholding requirements. The bill would establish fair. administrable and uniform rules to ensure that the appropriate amount of tax is paid to state and local jurisdictions without placing excessive burdens on employees and their employers. This bill was reported out of the Judiciary Committee. by a bipartisan voice vote. which speaks volumes. I hope you will join me in supporting this important legislation impacting millions of American employees who travel for work to support their families. Fortyone states currently impose a personal income tax on income earned within their borders regardless of whether an individual is a resident of the statethereby requiring nonresident employees who must travel to other states for work purposes to pay tax after performing work there for even a limited amount of time. Employers are required to withhold that states income tax on behalf of the employee and remit it to the state at the end of the year. The committee notes that while some states require an employer to withhold income tax on the first day of the employees travel. others use a hybrid system of time spent and dollars earned to trigger withholding. requiring individuals who travel for work to track and comply with the income tax laws of up to 41 different states. For instance. a nonresidents income tax liability is triggered in New York the moment he or she earns wages in the state. but the employers withholding requirement is not triggered until the 14th day of wageearning. In Idaho. meanwhile. a nonresidents income tax liability is not triggered until after he or she makes $1.000 in wages in the state. I note that some committee Democrats oppose the bill because they fear it will lead to severe state revenue losses but believe that this is a solid bipartisan piece of legislation. This bill limits the authority of states to tax the income of nonresident employees who work for a limited amount of time in the state. allowing such individuals to be taxed only if they work in the state for 31 days or more. Those limits would become effective on January 1 of the second year that begins after the bills date of enactment. and it would not apply to any tax obligation that accrues before that time. The bill prohibits states from taxing the wages or other earnings of nonresidents unless they work in the state for 31 days or more during the calendar year. Similarly. states could not subject such income to state income tax withholding and reporting requirements. unless more than 30 days of work was performed. Under the measure. an individual is considered to be present and performing employment duties within a state for a day if that individual performs more of his or her work within that state than in any other state during the day. If an individual works during one day both in his or her resident state and in just one nonresident state. the individual would be considered to have performed more of his or her employment duties in the nonresident state. Portions of the day during which an individual is in transit would not be considered in determining the location of where work was performed. The bill provides that for purposes of determining state income tax withholding and reporting requirements. an employer could rely on an employees determination of the time expected to be spent working for the employer in other nonresident states (absent the employers actual knowledge of fraud by the employee in making the determination. or collusion between the employer and the employee to evade tax). Employers could rely on an employees determination even if the employer regularly maintains records of the location of employees. but if the employer maintains a time and attendance system that tracks where an employee works on a daily basis the data from the time and attendance system must be used instead of the employees determination. The bill stipulates that the term "employee" has the same meaning given to it by the state in which employment duties are performedexcept the term would not include professional athletes. professional entertainers or certain public figures. States could. therefore. continue to tax those nonresidents as they do now. I urge my colleagues to join me in supporting this bill.