[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 3995 Introduced in Senate (IS)]
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116th CONGRESS
2d Session
S. 3995
To limit the authority of States or other taxing jurisdictions to tax
certain income of employees for employment duties performed in other
States or taxing jurisdictions, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
June 18, 2020
Mr. Thune (for himself and Mr. Brown) introduced the following bill;
which was read twice and referred to the Committee on Finance
_______________________________________________________________________
A BILL
To limit the authority of States or other taxing jurisdictions to tax
certain income of employees for employment duties performed in other
States or taxing jurisdictions, 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. SHORT TITLE.
This Act may be cited as the ``Remote and Mobile Worker Relief Act
of 2020''.
SEC. 2. LIMITATIONS ON 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 taxing
jurisdiction shall be subject to income tax in any taxing jurisdiction
other than--
(1) the taxing jurisdiction of the employee's residence;
and
(2) the taxing jurisdiction 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 income tax
withholding and reporting requirements with respect to any taxing
jurisdiction unless the employee is subject to income tax in such
taxing jurisdiction 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 taxing jurisdiction during the calendar year.
(c) Operating Rules.--For purposes of determining penalties related
to an employer's income tax withholding and reporting requirements with
respect to any taxing jurisdiction--
(1) an employer may rely on an employee's annual
determination of the time expected to be spent by such employee
in the taxing jurisdictions 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 taxing jurisdiction for a
day if the employee performs more of the employee's
employment duties within such taxing jurisdiction than
in any other taxing jurisdiction during a day.
(B) If an employee performs employment duties in a
resident taxing jurisdiction and in only one
nonresident taxing jurisdiction during one day, such
employee shall be considered to have performed more of
the employee's employment duties in the nonresident
taxing jurisdiction than in the resident taxing
jurisdiction 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 taxing jurisdiction 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 taxing
jurisdiction 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 taxing jurisdiction'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
taxing jurisdiction in which the employee's employment duties
are performed, in which case the taxing jurisdiction's
definition shall prevail.
(8) Taxing jurisdiction.--The term ``taxing jurisdiction''
means any of the several States, the District of Columbia, or
any territory or possession of the United States, any
municipality, city, county, township, parish, transportation
district, or assessment jurisdiction, or any other political
subdivision within the territorial limits of the United States
with the authority to impose a tax, charge, or fee.
(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 taxing jurisdiction 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 taxing jurisdictions 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 taxing jurisdiction
in which the employment duties are performed.
(e) Adjustment During Coronavirus Pandemic.--With respect to
calendar year 2020, in the case of any employee who performs employment
duties in any taxing jurisdiction other than the taxing jurisdiction of
the employee's residence during such year as a result of the COVID-19
public health emergency, subsection (a)(2) shall be applied by
substituting ``90 days'' for ``30 days''.
SEC. 3. STATE AND LOCAL TAX CERTAINTY.
(a) Status of Employees During Covered Period.--Notwithstanding
section 2(a)(2) or any provision of law of a taxing jurisdiction, with
respect to any employee who is working remotely within such taxing
jurisdiction during the covered period--
(1) except as provided under paragraph (2), any wages
earned by such employee during such period shall be deemed to
have been earned at the primary work location of such employee;
and
(2) if an employer, at its sole discretion, maintains a
system that tracks where such employee performs duties on a
daily basis, wages earned by such employee may, at the election
of such employer, be treated as earned at the location in which
such duties were remotely performed.
(b) Status of Businesses During Covered Period.--Notwithstanding
any provision of law of a taxing jurisdiction--
(1) in the case of an out-of-state business which has any
employees working remotely within such jurisdiction during the
covered period, the duties performed by such employees within
such jurisdiction during such period shall not be sufficient to
create any nexus or establish any minimum contacts or level of
presence that would otherwise subject such business to any
registration, taxation, or other related requirements for
businesses operating within such jurisdiction; and
(2) except as provided under subsection (a)(2), with
respect to any tax imposed by such taxing jurisdiction which is
determined, in whole or in part, based on net or gross receipts
or income, for purposes of apportioning or sourcing such
receipts or income, any duties performed by an employee of an
out-of-state business while working remotely during the covered
period--
(A) shall be disregarded with respect to any filing
requirements for such tax; and
(B) shall be apportioned and sourced to the tax
jurisdiction which includes the primary work location
of such employee.
(c) Definitions.--For purposes of this section--
(1) Covered period.--The term ``covered period'' means,
with respect to any employee working remotely, the period--
(A) beginning on the date on which such employee
began working remotely; and
(B) ending on the earlier of--
(i) the date on which the employer allows,
at the same time--
(I) such employee to return to
their primary work location; and
(II) not less than 90 percent of
their permanent workforce to return to
such work location; or
(ii) December 31, 2020.
(2) Employee.--The term ``employee'' has the same meaning
given to it by the taxing jurisdiction in which the employment
duties are performed.
(3) Employer.--The term ``employer'' has the same meaning
given such term under section 2(d)(7).
(4) Out-of-state business.--The term ``out-of-state
business'' means, with respect to any tax jurisdiction, any
business entity which, excepting any employees of such business
who are working remotely within such jurisdiction during the
covered period, would not otherwise be subject to any tax
filing requirements under the existing law of such taxing
jurisdiction.
(5) Primary work location.--The term ``primary work
location'' means, with respect to an employee, the address of
the employer where the employee is regularly assigned to work
when such employee is not working remotely during the covered
period.
(6) Taxing jurisdiction.--The term ``taxing jurisdiction''
has the same meaning given such term under section 2(d)(8).
(7) Wages.--The term ``wages'' means all wages and other
remuneration paid to an employee that are subject to tax or
withholding requirements under the law of the taxing
jurisdiction in which the employment duties are deemed to be
performed under subsection (a) during the covered period.
(8) Working remotely.--The term ``working remotely'' means
the performance of duties by an employee at a location other
than the primary work location of such employee at the
direction of their employer due to conditions resulting from
the public health emergency relating to the virus SARS-CoV-2 or
coronavirus disease 2019 (referred to in this paragraph as
``COVID-19''), including--
(A) to comply with any government order relating to
COVID-19;
(B) to prevent the spread of COVID-19; and
(C) due to the employee or a member of the
employee's family contracting COVID-19.
(d) Preservation of Authority of Taxing Jurisdictions.--This
section shall not be construed as modifying, impairing, superseding, or
authorizing the modification, impairment, or supersession of the law of
any taxing jurisdiction pertaining to taxation except as expressly
provided in subsections (a) through (c).
SEC. 4. EFFECTIVE DATE; APPLICABILITY.
(a) Effective Date.--This Act shall apply to calendar years
beginning after December 31, 2019.
(b) Applicability.--This Act shall not apply to any tax obligation
that accrues before January 1, 2020.
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