[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 540 Introduced in Senate (IS)]

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115th CONGRESS
  1st Session
                                 S. 540

To limit the authority of States to tax certain income of employees for 
              employment duties performed in other States.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 7, 2017

    Mr. Thune (for himself, Mr. Brown, Mr. Roberts, Mr. Blunt, Mr. 
 Blumenthal, Mr. Tillis, Mr. Booker, Mr. Perdue, Mr. Reed, Mr. Hoeven, 
 Ms. Stabenow, Mr. Barrasso, Mrs. Murray, Mr. Heller, Mrs. Ernst, Mr. 
  Donnelly, Mr. Isakson, Ms. Hassan, and Mr. Boozman) introduced the 
 following bill; which was read twice and referred to the Committee on 
                                Finance

_______________________________________________________________________

                                 A BILL


 
To limit the authority of States to tax certain income of employees for 
              employment duties performed in other States.

    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 ``Mobile Workforce State Income Tax 
Simplification Act of 2017''.

SEC. 2. LIMITATIONS ON STATE WITHHOLDING AND TAXATION OF EMPLOYEE 
              INCOME.

    (a) In General.--No part of the wages or other remuneration earned 
by an employee who performs employment duties in more than one State 
shall be subject to income tax in any State other than--
            (1) the State of the employee's residence; and
            (2) the State within which the employee is present and 
        performing employment duties for more than 30 days during the 
        calendar year in which the wages or other remuneration is 
        earned.
    (b) Wages or Other Remuneration.--Wages or other remuneration 
earned in any calendar year shall not be subject to State income tax 
withholding and reporting requirements unless the employee is subject 
to income tax in such State under subsection (a). Income tax 
withholding and reporting requirements under subsection (a)(2) shall 
apply to wages or other remuneration earned as of the commencement date 
of employment duties in the State during the calendar year.
    (c) Operating Rules.--For purposes of determining penalties related 
to an employer's State income tax withholding and reporting 
requirements--
            (1) an employer may rely on an employee's annual 
        determination of the time expected to be spent by such employee 
        in the States in which the employee will perform duties 
        absent--
                    (A) the employer's actual knowledge of fraud by the 
                employee in making the determination; or
                    (B) collusion between the employer and the employee 
                to evade tax;
            (2) except as provided in paragraph (3), if records are 
        maintained by an employer in the regular course of business 
        that record the location of an employee, such records shall not 
        preclude an employer's ability to rely on an employee's 
        determination under paragraph (1); and
            (3) notwithstanding paragraph (2), if an employer, at its 
        sole discretion, maintains a time and attendance system that 
        tracks where the employee performs duties on a daily basis, 
        data from the time and attendance system shall be used instead 
        of the employee's determination under paragraph (1).
    (d) Definitions and Special Rules.--For purposes of this Act:
            (1) Day.--
                    (A) Except as provided in subparagraph (B), an 
                employee is considered present and performing 
                employment duties within a State for a day if the 
                employee performs more of the employee's employment 
                duties within such State than in any other State during 
                a day.
                    (B) If an employee performs employment duties in a 
                resident State and in only one nonresident State during 
                one day, such employee shall be considered to have 
                performed more of the employee's employment duties in 
                the nonresident State than in the resident State for 
                such day.
                    (C) For purposes of this paragraph, the portion of 
                the day during which the employee is in transit shall 
                not be considered in determining the location of an 
                employee's performance of employment duties.
            (2) Employee.--The term ``employee'' has the same meaning 
        given to it by the State in which the employment duties are 
        performed, except that the term ``employee'' shall not include 
        a professional athlete, professional entertainer, qualified 
        production employee, or certain public figures.
            (3) Professional athlete.--The term ``professional 
        athlete'' means a person who performs services in a 
        professional athletic event, provided that the wages or other 
        remuneration are paid to such person for performing services in 
        his or her capacity as a professional athlete.
            (4) Professional entertainer.--The term ``professional 
        entertainer'' means a person of prominence who performs 
        services in the professional performing arts for wages or other 
        remuneration on a per-event basis, provided that the wages or 
        other remuneration are paid to such person for performing 
        services in his or her capacity as a professional entertainer.
            (5) Qualified production employee.--The term ``qualified 
        production employee'' means a person who performs production 
        services of any nature directly in connection with a State 
        qualified, certified or approved film, television or other 
        commercial video production for wages or other remuneration, 
        provided that the wages or other remuneration paid to such 
        person are qualified production costs or expenditures under 
        such State's qualified, certified or approved film incentive 
        program, and that such wages or other remuneration must be 
        subject to withholding under such film incentive program as a 
        condition to treating such wages or other remuneration as a 
        qualified production cost or expenditure.
            (6) Certain public figures.--The term ``certain public 
        figures'' means persons of prominence who perform services for 
        wages or other remuneration on a per-event basis, provided that 
        the wages or other remuneration are paid to such person for 
        services provided at a discrete event, in the nature of a 
        speech, public appearance, or similar event.
            (7) 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)), unless such term is defined by the 
        State in which the employee's employment duties are performed, 
        in which case the State's definition shall prevail.
            (8) State.--The term ``State'' means any of the several 
        States.
            (9) Time and attendance system.--The term ``time and 
        attendance system'' means a system in which--
                    (A) the employee is required on a contemporaneous 
                basis to record his work location for every day worked 
                outside of the State in which the employee's employment 
                duties are primarily performed; and
                    (B) the system is designed to allow the employer to 
                allocate the employee's wages for income tax purposes 
                among all States in which the employee performs 
                employment duties for such employer.
            (10) Wages or other remuneration.--The term ``wages or 
        other remuneration'' may be limited by the State in which the 
        employment duties are performed.

SEC. 3. EFFECTIVE DATE; APPLICABILITY.

    (a) Effective Date.--This Act shall take effect on January 1 of the 
second calendar year that begins after the date of the enactment of 
this Act.
    (b) Applicability.--This Act shall not apply to any tax obligation 
that accrues before the effective date of this Act.
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