State Income Tax Compliance Should Keep Up With Modern, Mobile Workforce

NTU urges all Representatives to vote “YES” on H.R. 2315, the “Mobile Workforce State Income Tax Simplification Act of 2015.” This legislation would 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.

While travel has long been requisite to more than a few professions, 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.

H.R. 2315 addresses this 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.

Complex and burdensome multistate tax policies have often failed to adapt to the realities of a 21st Century economy. It is essential that our tax policies reflect the needs of today’s 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.  H.R. 2315 is an important step toward maintaining this competitive edge and ensuring our future prosperity.

Roll call votes on H.R. 2315 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