[Congressional Record Volume 141, Number 209 (Wednesday, December 27, 1995)]
[Senate]
[Pages S19296-S19297]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     PASSAGE OF THE SOURCE TAX BILL

 Mr. REID. Mr. President, I am extremely pleased to announce 
that the source tax bill has again passed both houses of Congress. As 
many of you know, this legislation was passed in the 102d and 103d 
Congresses, and again in the 104th Congress as an amendment to the 
budget bill, only to be struck because of the so called Byrd rule. I 
have been working on this issue virtually since I came to Congress.
  There are many people who have been essential to the bill's passage, 
and I wish to acknowledge some of them now. This issue was brought to 
my attention by a Nevadan named Bill Hoffman. He told me about the 
unjust cases of retirees being taxed by States they no longer were 
living in. Many of these stories were very tragic, because the retiree 
relied completely on their pension incomes to survive.
  Bill and his wife Joanne heard so many of these tragic stories that 
eventually they started an organization known as Retirees to Eliminate 
State Income Source Tax [RESIST]. RESIST was founded in July of 1988 in 
Carson City, NV. In less than 4 years, it had grown in membership to 
tens of thousands of members. It includes members of every State of the 
Union. RESIST is truly a nonprofit, grass roots organization, and I 
congratulate and thank Bill and Joanne today for their tireless 
efforts. Without their help the source tax bill would not have made it 
to this stage today.
  I would also like to extend my sincere thanks to Chairman Roth and 
Senator Moynihan, their staff, and especially the Finance Committee 
staff, for all of their help getting the source tax bill out of 
committee and to the floor. With everything that has been going on in 
recent weeks, they made this bill a priority and I am very grateful for 
their hard work.
  I also extend my thanks to Senator Bryan and Congresswoman Barbara 
Vucanovich and her staff. The Congresswoman has also been working on 
this bill for a very long time, and my colleague, Senator Bryan, has 
been continually supportive and essential in the passage of this bill.
  Currently, retirees may be forced to pay taxes to States where they 
do not reside, and from which they receive no benefits. This is truly 
an unfair practice, especially for those retirees with relatively low 
incomes. This bill prohibits States from taxing the retirement income 
of nonresidents. It ends taxation without representation. It will 
protect all income received from pension plans recognized as qualified 
under the Internal Revenue Code. It will also exempt income received 
under certain nonqualified deferred compensation plans.
  Often times, the pension income retirees receive is the only income 
they have on which to live. I have heard many stories of the 
devastating effects of taxing these pensions. One story, which I have 
told on this floor before, is of an older woman from Fallon, NV who had 
an annual income of between $12,000 and $13,000 a year. One day she 

[[Page S19297]]
receives a notice from California saying she owes taxes on her pension 
income from California, plus the penalties and interest on those taxes.
  The California Franchise Board had gone back to 1978 and calculated 
her tax debt to be about $6,000. That is half of her annual income. 
This story, as unfair and unequitable as it sounds, is unfortunately 
not unique. That is why this legislation is such a big victory for all 
retirees in this country.

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