[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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