Simplifying State Income Tax Rules Key to Modern, Mobile Workforce


NTU urges all Representatives to vote “YES” on H.R. 1393, the “Mobile Workforce State Income Tax Simplification Act.” This legislation would clarify the issue of tax filing and withholding requirements for workers who perform duties of a temporary nature in states where they do not reside.

Greater numbers of Americans today – including those who are self-employed – find themselves accepting short-term assignments outside their states of residence. Unfortunately, these situations can ensnare unsuspecting individuals with complex filing procedures while heaping more withholding rules on employers. This exacerbates an already burdensome task, both in terms of time and financial resources.

H.R. 1393 helps to address this problem by establishing sensible guidelines within which states and localities can enact tax policies affecting nonresidents. The bill stipulates that a temporarily assigned employee’s earnings are only subject to a given jurisdiction’s tax laws when he or she works in the jurisdiction for more than 30 days out of a calendar year. The employee’s compensation would still be fully liable for whatever taxes may apply in his or her state of residence. The same standard would apply to employers for withholding purposes.

This is an important step toward simplifying complex and burdensome multistate tax provisions that have so far failed to adapt to the realities of a 21st Century economy. Building a flexible, mobile workforce capable of engaging in productive activity wherever their immediate presence may be required will improve America’s competitiveness and economic prosperity.

Roll call votes on H.R. 1393 will be included in our annual Rating of Congress and a “YES” vote will be considered the pro-taxpayer position.

If you have any questions, please contact NTU Federal Affairs Manager Nan Swift at (703) 683-5700