Goodlatte Praises Passage of Bill to Simplify Regulations for Employees Working Across State Lines 

Washington, D.C. -- The House of Representatives today approved the Mobile Workforce State Income Tax Simplification Act of 2017 (H.R. 1393) by voice vote.  House Judiciary Committee Chairman Bob Goodlatte (R-Va.) issued the following statement applauding the passage of this Committee product. Chairman Goodlatte: “American small businesses should not face added regulatory burdens just because they must occasionally send their employees across state lines to conduct their business. When a small business owner is faced with additional compliance requirements for employees in different states, those costs can add up and ultimately hurt the growth of the business as a whole. “The Mobile Workforce State Income Tax Simplification Act eases the regulatory burdens on small businesses and their employees who work across state lines, while creating a fair balance with states wishing to collect taxes on income earned in the state.” Background: The Mobile Workforce State Income Tax Simplification Act of 2017 is a bipartisan measure, which provides a clear, uniform framework for when states may tax nonresident employees who travel to the taxing state to perform work. In particular, the bill prevents states from imposing income tax compliance burdens on nonresidents who work in a foreign state for fewer than 31 days in a year. This uniform standard would substantially simplify state income tax law compliance for both employers and employees.

• Forty-three states and the District of Columbia levy a personal income tax on wages and partnership income.
• The state tax laws that determine when a nonresident must pay the foreign state’s income tax, and when employers must withhold this tax, are numerous and varied.
• The bill provides that an employee is not subject to income tax in a nonresident state unless the employee has worked for more than 30 days in that jurisdiction.
• Similarly, an employer is not responsible for withholding on behalf of such an employee who is only temporarily present in the taxing state.