Lawmakers have introduced legislation that would provide a month-long safe harbor from income tax and withholding requirements for traveling employees and their employers.
[IMGCAP(1)]The Mobile Workforce State Income Tax Simplification Act of 2015 was introduced in the House on Thursday as H.R. 2315 by Rep. Mike Bishop, R-Mich., and Hank Johnson, D-Ga. Both lead sponsors are members of the House Judiciary Committee, where H.R. 2315 will likely be referred.
Joining them as original co-sponsors are Rep. Jason Chaffetz, R-Utah, Lamar Smith, R-Texas, Mark Walker, R-N.C., Dennis Ross, R-Fla., Patrick Murphy, D-Fla., David Cicilline, D-R.I., and Eric Swalwell, D-Calif.
The legislation would set a 30-day safe harbor from personal income tax and withholding obligations for traveling employees and their employers, including businesses, associations, governments and unions. Employees traveling to a nonresident state for fewer than 30 days would incur no personal income tax liability in the nonresident state, and the employer would have no withholding obligation.
[IMGCAP(2)]Employers and employees would continue to fulfill their tax obligations to the state of residency during the 30-day safe harbor. The language of the bill is identical to one that passed the full House of Representatives in May 2012 (H.R. 1864).
"We're very pleased that Representative Bishop and Representative Johnson have introduced H.R. 2315, the Mobile Workforce State Income Tax Simplification Act of 2015,” said Douglas L. Lindholm, president and chief executive of the Council On State Taxation (COST), the association leading the 270-plus member coalition of supporting organizations.
“This important bill strikes a balance between state sovereignty and the need to ensure that the mobility of our national workforce is not encumbered by 50 separate state rules applicable to nonresident traveling employees and their employers,” he said. “We look forward to working with our sponsors to move the bill forward this Congress,”
The Senate companion bill, S.386, was introduced on Feb. 5, 2015 by Sen. John Thune, R-S.D., and Sherrod Brown, D-Ohio.
The bill would not affect issues such as those highlighted in the Hillenmeyer v. Cleveland Board of Review case, in which an NFL player contested the “Games Played” allocation by Cleveland of his salary subject to local tax, according to Lindholm (see Cleveland Appeals Denial of Games Played’ Allocation for Former NFL Player in Deflategate’ Motion).
“It does not cover athletes, entertainers and other prominent individuals who are paid on a per event basis and therefore should be well aware of their tax obligations,” he said.
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