109 HR 6167 IH: Mobile Workforce State Income Tax U.S. House of Representatives 2006-09-25 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.

I 109th CONGRESS 2d Session H. R. 6167 IN THE HOUSE OF REPRESENTATIVES September 25, 2006 Mr. Cannon introduced the following bill; which was referred to the Committee on the Judiciary A BILL To limit the authority of States and localities to tax certain income of employees for employment duties performed in other States and localities.

1.

Short title

This Act may be cited as the Mobile Workforce State Income Tax Fairness and Simplification Act of 2006.

2.

Limitations on state and locality withholding and taxation of employee income

(a)

In general

No part of the wages or other remuneration paid to an employee who performs duties in more than one State or locality shall be subject to the income tax laws of any State or locality other than— (1)the State or locality of the employee’s residence; and (2)the State or locality in which the employee is physically present performing duties for more than 60 days during the calendar year in which the income is taxed. (b)

Wages or other remuneration

Wages or other remuneration paid in any calendar year are not subject to State or locality income tax withholding and reporting unless the employee is subject to income tax under subsection (a). Income tax withholding and reporting under subsection (a)(2) shall apply to wages or other remuneration paid as of the commencement date of duties in the State or locality during the calendar year. (c)

Operating rules

For purposes of determining an employer's State income tax withholding and information return obligations— (1)an employer may rely on an employee's determination of the time expected to be spent by such employee in the States or localities in which the employee will perform duties absent— (A)actual knowledge of fraud by the employee in making the estimate; or (B)collusion between the employer and the employee to evade tax; and (2)if records are maintained by an employer recording the location of an employee for other business purposes, such records shall not preclude an employer’s ability to rely on an employee’s determination as set forth in paragraph (1). (d)

Definitions and special rules

For purposes of this Act: (1)

Day

An employee will be considered physically present and performing duties in a State or locality for a day if the employee performs more than 50 percent of the employee’s employment duties in such State or locality for such day. (2)

Employee

The term employee shall be defined by the State or locality in which the duties are performed, except that the term employee shall not include a professional athlete or entertainer. (3)

Employer

The term employer has the meaning given such term in section 3401(d) of the Internal Revenue Code of 1986 (26 U.S.C. 3401(d)) or shall be defined by the State or locality in which the duties are performed. (4)

Locality

The term locality means any political subdivision, agency, or instrumentality of a State. (5)

State

The term State means each of the several States (or any subdivision thereof), or any territory or possession of the United States. (6)

Wages or other remuneration

The term wages or other remuneration shall be defined by the State or locality in which the employment duties are performed.