[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 546 Engrossed in House (EH)]

103d CONGRESS
  2d Session
                                H. R. 546

_______________________________________________________________________

                                 AN ACT


 
   To limit State taxation of certain pension income, and for other 
                               purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. LIMITATION ON STATE INCOME TAXATION OF CERTAIN PENSION 
              INCOME.

    (a) Amendment.--Chapter 4 of title 4, United States Code, is 
amended by adding at the end the following:
``Sec. 114. Limitation on State income taxation of certain pension 
              income
    ``(a) Except as provided in subsection (b), no State may impose an 
income tax on any qualified pension income of an individual who is not 
a resident or domiciliary of such State (as determined under the laws 
of such State).
    ``(b)(1) Subsection (a) shall not apply to the extent that the 
aggregate amount of qualified pension income of an individual for any 
calendar year exceeds $30,000. There shall not be taken into account 
under the preceding sentence any amount which is exempt from State 
taxation by reason of other Federal law.
    ``(2) If more than 1 State would (but for this section) impose an 
income tax on qualified pension income received by an individual during 
a calendar year, the dollar amount otherwise applicable under paragraph 
(1) for such calendar year shall be allocated among such States in such 
amounts as such individual may determine.
    ``(3) If more than 1 individual receives qualified pension income 
during a calendar year which is attributable to services performed by 1 
individual--
            ``(A) all such individuals receiving such income shall be 
        treated as 1 individual, and
            ``(B) the dollar amount applicable under paragraph (1) 
        shall be allocated among such individuals in proportion to 
        their respective shares of such income received during such 
        calendar year.
    ``(c) For purposes of this section--
            ``(1) The term `qualified pension income' means any income 
        from--
                    ``(A) a qualified trust under section 401(a) of the 
                Internal Revenue Code that is exempt under section 
                501(a) from taxation;
                    ``(B) a simplified employee pension as defined in 
                section 408(k) of such Code;
                    ``(C) an annuity plan described in section 403(a) 
                of such Code;
                    ``(D) an annuity contract described in section 
                403(b) of such Code;
                    ``(E) an individual retirement plan described in 
                section 7701(a)(37) of such Code;
                    ``(F) an eligible deferred compensation plan (as 
                defined in section 457 of such Code);
                    ``(G) a governmental plan (as defined in section 
                414(d) of such Code); or
                    ``(H) a trust described in section 501(c)(18) of 
                such Code.
        Such term includes any retired or retainer pay of a member or 
        former member of a uniform service computed under chapter 71 of 
        title 10, United States Code.
            ``(2) The term `income tax' has the meaning given such term 
        by section 110(c).
            ``(3) The term `State' includes any political subdivision 
        of a State, the District of Columbia, and the possessions of 
        the United States.
    ``(d) In the case of any calendar year after 1995, the dollar 
amount contained in subsection (b) shall be increased by the amount 
determined by the Secretary of the Treasury to be equal to such dollar 
amount, multiplied by the cost-of-living adjustment determined under 
section 1(f)(3) of such Code by substituting `calendar year 1994' for 
`calendar year 1992' in subparagraph (B) thereof. If any increase 
determined under the preceding sentence is not a multiple of $1,000, 
such increase shall be rounded to the nearest multiple of $1,000. Not 
later than December 1 of each calendar year, the Secretary of the 
Treasury shall publish in the Federal Register the amount determined 
under this subsection which is applicable to the following calendar 
year.
    ``(e) Nothing in this section shall be construed as having any 
effect on the application of section 514 of the Employee Retirement 
Income Security Act of 1974.''
    (b) Conforming Amendment.--The table of sections for chapter 4 of 
title 4, United States Code, is amended by adding at the end the 
following:

``114. Limitation on State income taxation of certain pension 
                            income.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to amounts received after December 31, 1994.

            Passed the House of Representatives October 3, 1994.

            Attest:






                                                                 Clerk.
103d CONGRESS

  2d Session

                               H. R. 546

_______________________________________________________________________

                                 AN ACT

   To limit State taxation of certain pension income, and for other 
                               purposes.