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NTU urges all Representatives to vote “YES” on H.R. 1864, the Mobile Workforce State Income Tax Simplification Act.
May 14, 2012
NTU urges all Representatives to vote “YES” on H.R. 1864, the Mobile Workforce State Income Tax Simplification Act. This legislation will begin the important task of clarifying the issue of tax filing and withholding requirements for workers who perform duties of a temporary nature in states where they do not reside.
In today’s economy, millions of Americans accept temporary assignments outside their state of residence or traditional workplace location. Yet, some state and local tax laws are horrendously out of touch with this fact, causing unnecessary compliance headaches for workers and employers alike. H.R. 1864 would set federal guidelines for the way states and localities can impose earnings taxes on most nonresidents, including a minimum threshold of time spent in-state (more than 30 days) before compliance requirements are triggered. All other tax obligations in the worker’s or employer’s home state would remain unchanged.
Complex and burdensome multistate tax policies have often failed to adapt to the realities of a 21st Century economy. Indeed, many such policies have acted to impede development of modern, competitive business practices. Among these are flexible, mobile workforces capable of engaging in productive activity wherever their immediate presence may be required, even if their office may be based in one state or their home. Unfortunately, these situations can ensnare unsuspecting individuals with complex filing procedures while heaping more withholding rules on employers. As NTU’s most recent “Taxing Trend” study noted, federal corporate and personal income tax laws are onerous on their own, imposing some 6 billion hours in paperwork burdens. NTU calculates the value of this time at more than $194.3 billion. State and local laws only compound this deadweight loss.
Much more work remains to be done – at all levels of government – toward simplifying tax provisions so as to improve America’s competitiveness and economic prosperity. H.R. 1864 is an important step in the right direction.
A “YES” vote on H.R. 1864 will be considered the pro-taxpayer position for our annual Rating of Congress.
If you have any questions, please contact NTU Federal Affairs Manager Nan Swift at (703) 683-5700