[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 235 Introduced in Senate (IS)]

103d CONGRESS
  1st Session
                                 S. 235

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


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

             January 27 (legislative day, January 5), 1993

  Mr. Reid (for himself, Mr. Bryan, Mr. Inouye, Mr. Stevens, and Mr. 
   Bumpers) introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
   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 TAXATION OF CERTAIN PENSION INCOME.

    (a) In General.--Chapter 4 of title 4 of the United States Code is 
amended by adding at the end thereof the following new section:
``Sec. 114. Limitation on State income taxation of pension income
    ``(a) No State may impose an income tax (as defined in section 
110(c)) on the qualified pension income of any individual who is not a 
resident or domiciliary of such State.
    ``(b)(1) For purposes of subsection (a), the term `qualified 
pension income' means any payment from a qualified plan--
            ``(A) which is part of a series of substantially equal 
        periodic payments (not less frequently than annually) made 
        for--
                    ``(i) the life or life expectancy of the recipient 
                or for the joint lives or joint life expectancies of 
                the recipient and the recipient's designated 
                beneficiary, or
                    ``(ii) a period of not less than 10 years, or
            ``(B) which is not described in subparagraph (A) and 
        which--
                    ``(i) is received in a taxable year for which an 
                election under this subsection is in effect, and
                    ``(ii) is received on or after the date on which 
                the recipient has attained the age of 59\1/2\,
        except that the aggregate amount of payments to which this 
        subparagraph may apply for any taxable year shall not exceed 
        $25,000.
    ``(2) For purposes of paragraph (1), the term `qualified plan' 
means--
            ``(A) an employees' trust described in section 401(a) of 
        the Internal Revenue Code of 1986 which is exempt from tax 
        under section 501(a) of such Code,
            ``(B) a simplified employee pension described 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 under section 
        457 of such Code, or
            ``(G) a governmental plan described in section 414(d) of 
        such Code, other than a plan established and maintained by a 
        State or political subdivision of a State, or an agency or 
        instrumentality of either.
    ``(3)(A) An election under paragraph (1)(B), once made for a 
taxable year, may not be made for any other taxable year.
    ``(B) In calendar years beginning after 1993, the $25,000 amount 
referred to in paragraph (1)(B) shall be increased by an amount equal 
to such dollar amount, multiplied by the cost-of-living adjustment 
determined under section 1(f)(3) of such Code for such calendar year by 
substituting `calendar year 1992' for `calendar year 1989' in 
subparagraph (B) thereof.
    ``(c) For purposes of subsection (a), the term `State' includes any 
political subdivision of a State, the District of Columbia, and the 
possessions of the United States.''.
    (b) Clerical Amendment.--The table of sections for such chapter 4 
is amended by adding at the end thereof the following new item:

``114. Limitation on State income taxation of pension income.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

                                 <all>