House Judiciary Committee Markup Scheduled

On Wednesday, March 22, 2017, the House Judiciary Committee is scheduled to hold a markup of H.R. 1393, the Mobile Workforce State Income Tax Simplification Act of 2017. The Mobile Workforce Coalition applauds the Committee for taking action on this vital bipartisan legislation so early in the 115th Congress.

The bill was introduced on March 7, 2017 by Representative Mike Bishop (R-MI-8) and Representative Hank Johnson, Jr. (D-GA-4). In just two short weeks, the bill has already gained 32 additional cosponsors from 15 states. In a press release on the day of introduction, Representative Bishop stressed the importance of this step towards tax simplification:

“Our state income tax structure is too complicated and costly for today’s workforce,” said Rep. Bishop. “Right now, workers who must travel out of state and their respective employers face dozens of erroneous reporting requirements, many of which depend on varying length of travel and income levels. The goal of our bipartisan legislation is to create one simplified system for Americans to do their state income taxes, eliminating the burdensome paperwork and reducing compliance costs for everyone involved. Our Mobile Workforce bill passed unanimously in the House last Congress, and I am optimistic we can get even more done in today’s tax reform climate.”

Representative Johnson echoed similar sentiments:

“This important bipartisan effort streamlines the tax code, while reflecting the needs of various industries throughout the country,” said Rep. Johnson. “Simplifying our tax system in this manner will help Americans who work across multiple jurisdictions from paying local or state taxes in places other than where they live or work for an extended period of time.”

During the 114th Congress, Chairman Bob Goodlatte (R-VA-6) voiced his support of Mobile Workforce legislation, as well:

“American small businesses should not face added regulatory burdens just because they must 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.”

Including Chairman Goodlatte, ten members of the House Judiciary Committee are cosponsors of the Mobile Workforce bill. Additionally, a total of 308 organizations support the Mobile Workforce bill (to read our coalition letter, click here).

To watch the March 22nd markup, visit this link to view a livestream (or video archive if the markup has concluded). Follow @MWFCoalition on Twitter for live updates during the Committee proceedings, as well.

Traveling for work? Did you know you might owe nonresident state income taxes in every state you set foot in?

We live and work in an interconnected, mobile economy. The modern workforce isn’t stationary—many people travel all over the country to do their jobs. Right now, employees who travel outside of their states of residence for business purposes are subject to onerous administrative burdens because, in addition to filing federal and resident state income tax returns, they may also be legally required to file an income tax return in every other state into which they traveled, even if they were there for only one day. These employees and their employers are forced to comply with a patchwork of confusing, outdated, and sometimes predatory nonresident state income tax laws. 

The Mobile Workforce State Income Tax Simplification Act, a bill with bipartisan support and 153 cosponsors, would create a simple, streamlined system that makes it easier for employers and employees to comply with and pay nonresident state income taxes when they travel for work. To date, 295 supporters have joined us. We invite you to learn how the Mobile Workforce Coalition, in partnership with our Congressional cosponsors, proposes to fix the current system. (Want to send a letter to Congress? Click here.)

What can you do? Keep reading to learn more, or you can: 

Here's the Problem

Employees who travel outside of their states of residence for business purposes are subject to onerous administrative burdens because they may be legally required to file an income tax return in every state into which they traveled, even if they were only there for one day. Employers are required to incur extraordinary expenses in their efforts to comply with the states' widely divergent withholding requirements for employees’ travel to nonresident states for temporary work periods. And in some cases, requirements for employees and employers aren't the same. 

Keeping track of the requirements imposed by states on employers when it comes to withholding income taxes in nonresident states is incredibly complex due to the different requirements between states. In more than half of the states that have a personal income tax, employers are required to withhold tax from a nonresident employee's wages when they have worked in that state for only one day (maroon states in the map below). In many others, there are disparate rules, making it difficult for employers and employees to keep track of (teal states in the map below). In some of these states, withholding requirements are based on a dollar amount, some are based on the state's standard deduction, and still others are based on specific number of days. (Click here for details on teal states.)

As a result, compliance with these laws is often low.  

 

Luckily, There's A Solution

The Mobile Workforce State Income Tax Simplification Act provides for a uniform, fair, and easily administered law and helps to ensure that the correct amount of tax is withheld and paid to the states without the undue burden that the current system places on employees and employers. The Act provides a uniform 30-day threshold before the liability attaches and withholding is required. 

After 30 days, existing state laws will apply. Consistent with current law, the Act provides that an employee’s earnings are subject to full tax in his or her state of residence. Further, an employee’s earnings would be subject to income tax in the state(s) in which the employee is present and performing duties for more than 30 days during the calendar year. 

Nonresident employees who visit a state and perform employment duties for more than 30 days during a calendar year are subject to tax—and employers are required to withhold taxes—in the nonresident state from the commencement of the duties performed by the employee in the nonresident state. 

As under current law, nonresident employees who visit a state for longer than 30 days (and are therefore subject to that state’s nonresident filing and withholding rules) will still be able to take a credit against their resident state personal income tax liability for amounts paid to other states. 

This legislation does not cover certain uncommon types of employees, such as professional entertainers, professional athletes, and certain public figures. They remain subject to each state’s laws. 

Help pass Mobile Workforce! Use our website to send a letter to your Senator.

Did you know that you can ask your Senators to support the Mobile Workforce State Income Tax Simplification Act right here from our website? Right now, we're working to get as many cosponsors in the Senate as we canand you can help! 

We currently have 11 Senate cosponsors from 9 states. Click here for a full list, or check out the map below. Let's make this map completely green!

Sending a letter to your Senators only takes a few minutes, a few clicks, and some very brief contact information from you. All you have to do is input your contact info and we do the rest! Based on your location, our tool knows if your Senators are cosponsors of S. 386 or not, and creates letters either thanking them for their support or asking them to sign on as a cosponsor. Then, the website automatically populates the individual letters with your unique contact information.

We need to show as much grassroots support for S. 386 as we can. Please take a moment today to send a letter (click here to do so), and encourage your colleagues and friends to do so, too. The more the merrier!