[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 1097 Introduced in Senate (IS)]







109th CONGRESS
  1st Session
                                S. 1097

   To amend title 4 of the United States Code to prohibit the double 
         taxation of telecommuters and others who work at home.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 23, 2005

Mr. Dodd (for himself and Mr. Lieberman) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
   To amend title 4 of the United States Code to prohibit the double 
         taxation of telecommuters and others who work at home.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Telecommuter Tax Fairness Act of 
2005''.

SEC. 2. PROHIBITION ON DOUBLE TAXATION OF TELECOMMUTERS.

    (a) In General.--Chapter 4 of title 4, United States Code, is 
amended by adding at the end the following new section:
``Sec. 127. Prohibition on double taxation of telecommuters and others 
              who work at home
    ``(a) Physical Presence Required.--
            ``(1) In general.--In applying its income tax laws to the 
        salary of a nonresident individual, a State may only deem such 
        nonresident individual to be present in or working in such 
        State for any period of time if such nonresident individual is 
        physically present in such State for such period and such State 
        may not impose nonresident income taxes on such salary with 
        respect to any period of time when such nonresident individual 
        is physically present in another State.
            ``(2) Determination of physical presence.--For purposes of 
        determining physical presence, no State may deem a nonresident 
        individual to be present in or working in such State on the 
        grounds that such nonresident individual is present at or 
        working at home for the nonresident individual's convenience.
    ``(b) Definitions.--As used in this section--
            ``(1) State.--The term `State' includes any political 
        subdivision of a State, the District of Columbia, and the 
        possessions of the United States.
            ``(2) Income tax.--The term `income tax' has the meaning 
        given such term by section 110(c).
            ``(3) Income tax laws.--The term `income tax laws' includes 
        any statutes, regulations, administrative practices, 
        administrative interpretations, and judicial decisions.
            ``(4) Nonresident individual.--The term `nonresident 
        individual' means an individual who is not a resident of the 
        State applying its income tax laws to such individual.
            ``(5) Salary.--The term `salary' means the compensation, 
        wages, or other remuneration earned by an individual for 
        personal services performed as an employee or as an independent 
        contractor.
    ``(c) No Inference.--Nothing in this section shall be construed as 
bearing on--
            ``(1) any tax laws other than income tax laws,
            ``(2) the taxation of corporations, partnerships, trusts, 
        estates, limited liability companies, or other entities, 
        organizations, or persons other than nonresident individuals in 
        their capacities as employees or independent contractors,
            ``(3) the taxation of individuals in their capacities as 
        shareholders, partners, trust and estate beneficiaries, members 
        or managers of limited liability companies, or in any similar 
        capacities, and
            ``(4) the income taxation of dividends, interest, 
        annuities, rents, royalties, or other forms of unearned 
        income.''.
    (b) Clerical Amendment.--The table of sections of such chapter 4 is 
amended by adding at the end the following new item:

``127. Prohibition on double taxation of telecommuters and others who 
                            work at home.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of enactment of this Act.
                                 <all>