[Congressional Record Volume 162, Number 143 (Wednesday, September 21, 2016)]
[House]
[Pages H5768-H5772]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
MOBILE WORKFORCE STATE INCOME TAX SIMPLIFICATION ACT OF 2015
Mr. GOODLATTE. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 2315) to limit the authority of States to tax certain income
of employees for employment duties performed in other States.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 2315
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 2015''.
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, 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 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) 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.
(6) 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.
(7) State.--The term ``State'' means any of the several
States.
(8) 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.
(9) 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 2d 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.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
[[Page H5769]]
Virginia (Mr. Goodlatte) and the gentleman from New York (Mr. Nadler)
each will control 20 minutes.
The Chair recognizes the gentleman from Virginia.
General Leave
Mr. GOODLATTE. Mr. Speaker, I ask unanimous consent that all Members
may have 5 legislative days within which to revise and extend their
remarks and include extraneous materials on H.R. 2315, currently under
consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Virginia?
There was no objection.
Mr. GOODLATTE. Mr. Speaker, I yield myself such time as I may
consume.
The Mobile Workforce State Income Tax Simplification Act provides a
clear, uniform framework for when States may tax nonresident employees
who travel to the taxing State to perform work. In particular, this
bill prevents States from imposing income tax compliance burdens on
nonresidents who work in a foreign State for fewer than 30 days in a
year.
The State tax laws that determine when a nonresident must pay a
foreign State's income tax and when employers must withhold this tax
are numerous and varied. Some States tax income earned within their
borders by nonresidents even if the employee only works in the State
for just 1 day. These complicated rules impact everyone who travels for
work and many industries.
As just one example, the Judiciary Committee heard testimony in 2015
that the patchwork of State laws resulted in a manufacturing company
issuing 50 W-2s to a single employee for a single year. The company
executive also noted, regarding the compliance burden: many of our
affected employees make less than $50,000 per year and have limited
resources to seek professional advice.
States generally allow a credit for income taxes paid to another
State. However, it is not always dollar for dollar when local taxes are
factored in. Credits also do not relieve workers of substantial
paperwork burdens.
There are substantial burdens on employers as well. The committee
heard testimony in 2014 that businesses, including small businesses,
that operate interstate are subject to significant regulatory burdens
with regard to compliance with nonresident State income tax withholding
laws. These burdens distract from productive activity and job creation.
Nevertheless, some object that the States will lose revenue if the
bill is enacted. However, an analysis from Ernst & Young found that the
bill's revenue impact is minimal.
There is little motive for fraud and gaming because the amount of
money at issue--taxes on less than 30 days' wages--is minimal. Also,
the income tax generally has to be paid; the question is merely to
whom.
I commend the bill's lead sponsors, Representatives Bishop and
Johnson, and thank all of the bill's cosponsors. I urge the bill's
passage.
Mr. Speaker, I reserve the balance of my time, and I ask unanimous
consent to yield control of my time to the gentleman from Michigan (Mr.
Bishop).
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Virginia?
There was no objection.
Mr. NADLER. Mr. Speaker, I yield 4 minutes to the distinguished
gentleman from Michigan (Mr. Conyers).
Mr. CONYERS. Mr. Speaker, I rise in opposition to H.R. 2315.
A large and broad coalition of 11 large labor and tax organizations
all oppose this bill because it is an attempt to impose standardized
criteria for a uniform framework for the tax treatment of out-of-state
residents, would cause certain States to lose massive State income tax
revenues, and would facilitate tax liability avoidance through
manipulation by employers and employees alike.
It achieves this flawed result in several ways. To begin with, rather
than promoting uniformity, H.R. 2315 would have a significant adverse
impact on income tax revenues for certain States.
According to the Congressional Budget Office, for example, as the
gentleman from New York (Mr. Nadler) will explain, New York could lose
between $50 million and $125 million annually if this measure were
signed into law. Other States that would also be adversely impacted and
affected include Illinois, Massachusetts, and California.
As a result of the lost revenues from nonresident taxpayers, these
States would be forced to make up these losses by shifting the tax
burden to resident taxpayers. It may even cause these States to cut
government services, such as funding for education and critical
infrastructure improvements.
Another problem with H.R. 2315 is that it essentially provides a
roadmap for State income tax liability avoidance.
{time} 1900
By allowing an employer to rely on an employee's determination of the
time he or she is expected to spend working in another State during the
year, the bill prevents the employer from withholding an employee's
State income taxes to a nonresident State.
This would be the result even if the employer is aware that the
employee has been working in a State for more than 30 days, as long as
that State cannot prove that the employee committed fraud in making his
annual determination and the employer knew it.
Rather than proceeding with this flawed bill, I urge my colleagues to
pass a fair and uniform framework to allow States to collect taxes owed
on remote sales. By staying silent since the Supreme Court's 1992 Quill
decision, the Congress has failed to ensure that States have the
authority to collect sales and use tax on Internet purchases. I am
disappointed that, rather than moving the bipartisan eFairness
legislation that our communities need, we are considering this measure
instead.
For these concerns and other reasons, I hope that you will join me in
opposing H.R. 2315.
Mr. BISHOP of Michigan. Mr. Speaker, I yield myself such time as I
may consume.
Mr. Speaker, I appreciate the opportunity to address my colleagues
regarding my bipartisan, bicameral, H.R. 2315, the Mobile Workforce
State Income Tax Simplification Act.
Mr. Speaker, according to the 10th Amendment, States are generally
free to set their own public policy. It is important, however, that
they do so in a way that does not place a substantial burden upon the
Commerce Clause of the United States Constitution.
As the American workforce becomes increasingly more mobile, Congress
has the constitutional duty to ensure that State public policy does not
interfere with interstate economic activity.
As an attorney and businessowner, I have seen firsthand how
complicated all these different State income tax laws are for those who
travel and work. These burdens affect small businesses in particular,
as well as their employees, because they simply do not have the
resources to comply with all the varying State income tax requirements
that exist today.
Employees are currently being punished with complex reporting
standards and the expense that results from filing all of this
paperwork simply because they must travel outside their home State for
work. And rather than expanding payroll or reducing prices for consumer
goods, businesses are being forced to spend their hard-earned and
scarce resources on complying with convoluted State income tax laws.
This certainly fits the definition, in my opinion, of government red
tape.
During the subcommittee hearing on my bill last year, one witness
testified that his employer had filed 10,500 W-2s on behalf of their
numerous employees, primarily because they had crossed State lines for
work. He went on to tell us that one of his coworkers had to file 50 W-
2s just for himself.
Imagine an individual making less than $50,000 a year having to file
50, 20, or even 10 W-2s. It is simply unacceptable to place that burden
on our workforce today, and, moreover, it is unacceptable for us to let
it go unresolved any longer.
The Constitution grants Congress the authority to enact laws to
protect the free flow of commerce among the States. It is imperative
that Congress respects the 10th Amendment, but States must not use that
power to prey upon workers from different States simply to raise
revenues.
That said, the complex array of State income tax laws in this Nation
deserve
[[Page H5770]]
a serious overhaul, and that is why conservative states' rights
legislative groups such as the American Legislative Exchange Council
agree and support this legislation, specifically identifying H.R. 2315
as the type of interstate commerce regulation Congress should enact. In
fact, that is why more than 300 outside organizations, to date, have
pledged their support for this bill.
With the help of my colleague, Representative Hank Johnson, on the
other side of the aisle, our Mobile Workforce State Income Tax
Simplification Act is a carefully crafted, bipartisan, bicameral
measure that streamlines income tax laws across the Nation. It creates
a uniform 30-day threshold before which a nonresident cannot be exposed
to another State's income tax liability. This ensures employees will
have a clear understanding of their tax liability, and it gives
employers a clear and consistent rule so that they can plan and
accurately withhold taxes, knowing that the same rule applies for all
States with an income tax. And best of all, it means much less
paperwork and reduced compliance costs for everyone involved--
businessowners and employees.
The goal of H.R. 2315 is to protect our mobile workforce, and that
includes traveling emergency workers, first responders, trade union
workers, nonprofit staff, teachers, and Federal, State, and local
government employees. Any organization that has employees that cross
State lines for temporary periods will benefit from this law.
I would also note that great care was taken with this bill to
diminish the impact on State revenues. My colleague across the aisle
suggested concerns with this, and I would point out that a 2015 study
the chairman raised earlier, conducted by Ernst & Young, found that
H.R. 2315 would actually raise tax revenues in some States, while other
States would only see a de minimis change.
Mr. Speaker, I would like to take this opportunity to thank the 308
members of the Mobile Workforce Coalition who support the bill. I want
to thank Chairman Goodlatte for all of his time and effort, all 180 of
my colleagues who have cosponsored this House bill, as well as Senator
Thune, Senator Brown, and nearly half of the United States Senate that
have cosponsored our companion bill so far.
The Mobile Workforce State Income Tax Simplification Act is a simple
way to reduce obvious administrative burdens with so much red tape
interwoven in today's Tax Code. This bill is just a plain commonsense
way to cut through the clutter and simplify part of the filing process
moving forward.
Together, we can make our workforce a priority and help our small
businesses grow and save. I strongly urge my colleagues to pass H.R.
2315.
Mr. Speaker, I reserve the balance of my time.
Mr. NADLER. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise in opposition to H.R. 2315. This bill represents
a major assault on the sovereignty of the States, and does particular
damage to my home State of New York, depriving it of more than $100
million of its own tax revenue. The Mobile Workforce State Income Tax
Simplification Act would prohibit States from collecting income tax
from an individual unless the person works more than 30 days in that
State in a calendar year.
Simplifying and harmonizing the rules on tax collection across the
country is a worthy goal, but this bill would block States from setting
their own tax policy within their own borders. That is both highly
questionable, as a matter of constitutional law, and deeply troubling,
as a matter of policy.
The power to tax is a key index of sovereignty, yet this legislation
tells States they may not tax activity solely within their borders
except as prescribed in the bill. I find this constitutionally dubious.
Although I take a broad view generally of the Commerce Clause, I do not
think it extends to a State's ability to tax a person doing business
within its own borders.
Setting aside that concern, however, this bill would do great harm to
a number of States, most especially to New York. According to some
estimates, New York State could lose up to $125 million annually if
this bill were enacted.
New York City's unique location as the center of commerce for the
Nation as well as its physical proximity to two other States means that
many individuals go there throughout the year for business purposes.
But if you work fewer than 30 days, which is up to six 5-day workweeks,
this bill would strip New York of its right to tax any of your business
activity within its borders. That is both grossly unfair and extremely
costly. While a de minimis exception might make sense, I hardly think
that 6 weeks and $125 million is de minimis.
This bill comes at a time when Congress is intent on shifting more
and more responsibilities to the States. As States continue to struggle
with budgets that are stretched ever thinner, we should not further
limit their authority to tax and deprive them of yet more revenue. The
fiscal impact of this bill on certain States may be quite minimal but,
on others like New York, it would be catastrophic. If we deprive a
State of $125 million each year, vital services like education, law
enforcement, and health care could all be on the chopping block.
During consideration of H.R. 2315 in the Judiciary Committee, I
offered two amendments that would have mitigated its impact. The first
would have reduced the bill's 30-day threshold to a more reasonable 14
days, which is still almost 3 weeks of work without being subject to
taxation. The other would have added highly paid individuals to the
bill's list of exemptions, which would help avoid loopholes that could
allow wealthy people to escape millions of dollars of taxation.
Had my amendments been accepted, the expected impact on New York
would have been reduced from more than $100 million to roughly $20
million a year. While still causing a significant drain on resources,
these amendments would have gone a long way toward making the bill
fairer, while still achieving its underlying goals. Unfortunately, they
were defeated and, therefore, I must oppose the bill.
When the gentleman speaks of a company with 50 W-2 forms for one
employee, if those W-2 forms total a few million dollars, that is not
very burdensome. If they are for $50,000, I understand the point. My
amendment would have taken care of that.
I should note that this is not just about New York and that several
other States would be similarly affected by this legislation. In
addition, the bill is opposed by a broad coalition of labor and tax
organizations, including the AFL-CIO, AFSCME, SEIU, the International
Union of Police Associations, the Federation of Tax Administrators, the
Multistate Tax Commission, and many others.
We should not be depriving States of the ability to tax within their
own borders as we are transferring more functions to the States and
cutting back on Federal spending. I urge my colleagues to join me in
opposing this unfair and misguided legislation.
I reserve the balance of my time.
Mr. BISHOP of Michigan. Mr. Speaker, I yield myself such time as I
may consume.
Mr. Speaker, in response to the previous speaker, my colleague from
across the aisle, I would respectfully respond to his concerns about
states' rights. This bill does not violate federalism principles. On
the contrary, it is an exercise of Congress' Commerce Clause authority
in precisely the situation for which it was intended.
The Supreme Court has explained that the Commerce Clause was informed
by structural concerns about the effects of State regulation on the
national economy. Under the Articles of Confederation, State taxes and
duties hindered and suppressed interstate commerce. The Framers
intended the interstate Commerce Clause as a cure for these structural
ills. This bill fits squarely within the authority by bringing
uniformity to cases of de minimis presence by interstate workers in
order to reduce compliance costs.
I might also say, Mr. Speaker, in regard to this bill, this bill
enjoys broad bipartisan support. It has 180 cosponsors from both sides
of the aisle. This bill will minimize compliance burdens on both
workers and employers so that they can get back to being productive,
creating and performing jobs. We have received letters of support from
hundreds of entities across the employment spectrum.
But this bill is not just about business; it is about individuals.
[[Page H5771]]
One businessowner told the Judiciary Committee that the compliance
burdens from the patchwork of State laws falls on the employees who
``make less than $50,000 per year and have limited resources to seek
professional advice.''
{time} 1915
It may not seem like a lot to those who oppose this bill, but for
folks that make that kind of money, it is a great burden.
It has been questioned whether there will be revenue loss to these
States. Analysis shows that the impact is minimal, affecting mainly the
allocation of revenues, not the overall size of the tax revenue pot.
This legislation is a great example of Congress working in a
bipartisan way to relieve burdens on hardworking Americans.
Mr. Speaker, I urge Members to support the bill.
I reserve the balance of my time.
Mr. NADLER. Mr. Speaker, I yield 5 minutes to the gentleman from
Georgia (Mr. Johnson).
Mr. JOHNSON of Georgia. Mr. Speaker, I thank the gentleman from New
York for the time.
Mr. Speaker, I rise in support of H.R. 2315, the Mobile Workforce
State Income Tax Simplification Act of 2015, which is an important
bipartisan bill that will help workers and small businesses across the
country.
As a proud sponsor of this legislation in both the 110th and 111th
Congresses, I am very familiar with this issue.
H.R. 2315 would provide for a uniform and easily administrable law
that will simplify the patchwork of existing inconsistent and confusing
State rules. It would also reduce administrative costs to the States
and lessen compliance burdens on consumers.
From a national perspective, the mobile workforce bill will vastly
simplify the patchwork of existing inconsistent and confusing State
rules. It would also reduce administrative costs to States and lessen
compliance burdens on consumers.
Take my home State of Georgia as an example. If an Atlanta-based
employee of a St. Louis company travels to headquarters on a business
trip once a year, that employee would be subject to Missouri tax, even
if his annual visit only lasts a day. However, if that employee travels
to Maine, her trip would only be subject to tax if her trip lasts for
10 days. If she travels to New Mexico on business, she would only be
subject to tax if she was in the State for 15 days.
For example, in Georgia, Acuity Brands is a leading lighting
manufacturer that employs over 1,000 associates and has over 3,200
associates nationwide who travel extensively across the country for
training, conferences, and other business.
Mr. Speaker, I include in the Record a letter in support of H.R.
2315.
Acuity Brands,
Conyers, GA, September 19, 2016.
Re H.R. 2315, the Mobile Workforce State Income Tax
Simplification Act.
Hon. Hank Johnson,
Washington, DC.
Dear Representative Johnson: We are writing to express our
strong support for H.R. 2315, the Mobile Workforce State
Income Tax Simplification Act, and urge you to support the
legislation when the bill is considered by the House this
week.
H.R. 2315, which would establish unified, clear rules and
definitions for nonresident personal income tax reporting and
withholding, is supported by 300+ organizations comprising
the Mobile Workforce Coalition, and has over 170 bipartisan
co-sponsors. The bill was approved by the House Judiciary
Committee in June 2015, and a nearly identical version of the
legislation was passed by voice vote in the House during the
112th Congress (H.R. 1864).
Acuity Brands, Inc. is one of the leading manufacturers of
lighting and controls equipment in the world. We are a U.S.
corporation based in Georgia with offices, manufacturing
facilities, and training centers across the United States. We
employee over 4,000 associates in the United States, and our
fiscal year 2015 net sales totaled over $2.7 billion.
Acuity Brands is a large multinational company with
locations in many states and customers in all 50 states,
which requires a large number of our associates to travel
outside of their respective states of residency in order to
properly manage and grow our business. Our associates travel
all over the country for training, conferences, intracompany
business, and volunteer activities for communities or non-
for-profit entities. Many of these activities contribute to
the economy of those non-resident states. Our associates,
some of the country's foremost experts on matters impacting
the lighting industry, also travel at the invitation of state
legislators and regulators to provide testimony and technical
expertise on energy-related issues.
Given the extensive travel required of our associates, some
of which is done at the behest of others, the current state-
by-state system of nonresident personal income tax reporting
and withholding imposes substantial operational and
administrative burdens on Acuity Brands and our associates.
The current requirements vary by state and are often
changing, which presents significant compliance challenges.
Furthermore, state laws are not always clear on what
constitutes work travel or work days, or what exclusions
apply. Thus, significant resources are expended trying to
interpret various states' requirements and then attempting to
satisfy them.
H.R. 2315 would simplify the current system and greatly
reduce the burden on Acuity Brands and other businesses.
Unified, simple rules and definitions for nonresident
reporting and withholding obligations would undoubtedly
improve compliance rates and it would strike the correct
balance between state sovereignty and ensuring that America's
modern mobile workforce is not unduly encumbered.
In light of the foregoing, we would sincerely appreciate
your support on this legislation.
Thank you very much for your consideration.
Sincerely,
Cheryl English,
VP, Government & Industry Relations,
Acuity Brands.
Mr. JOHNSON of Georgia. In a letter, Richard Reece, Acuity's
executive vice president, writes that current State laws are numerous,
varied, and often changing, requiring that the company expend
significant resources merely interpreting and satisfying States'
requirements.
He concludes that:
Unified, clear rules and definitions for nonresident
reporting and withholding obligations would undoubtedly
improve compliance rates, and it would strike the correct
balance between State sovereignty and ensuring that America's
modern mobile workforce is not unduly encumbered.
We should heed the calls of Acuity and numerous other businesses
across the country by enacting H.R. 2315 into law. With over 175
cosponsors this Congress, it is clear that mobile workforce is an idea
whose time has come.
I thank my colleagues for their work on the bill, and, in particular,
Congressman Bishop of Michigan for his leadership on this bill in the
114th Congress; also Chairman Goodlatte for allowing this bill to come
to the floor. Congressman Bishop has carried the torch for our esteemed
former colleague, the late Howard Coble, who fought alongside me in
support of this bill when it passed out of the House by a voice vote in
the 112th Congress.
I also thank our staffs who have worked tirelessly to build support
for this legislation along bipartisan lines. This bill is a testament
to the good that can come from working across the aisle on bipartisan
tax fairness reforms.
I am optimistic that the passage of H.R. 2315 augers well for the
passage of e-fairness legislation, which is critical to countless small
businesses across the country this Congress.
Mr. Speaker, in closing, I urge my colleagues in the Senate to bring
this bill up for a vote as soon as possible. This country's employees
and businesses deserve quick action.
Mr. BISHOP of Michigan. Mr. Speaker, I reserve the balance of my
time.
Mr. NADLER. Mr. Speaker how much time do I have remaining?
The SPEAKER pro tempore. The gentleman from New York has 7\1/2\
minutes remaining.
Mr. NADLER. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, whatever the gentleman may say, the fact is this bill,
since it deals only with earnings earned completely within a State,
represents a major assault on the sovereignty of the States. It is one
thing to say that interstate commerce must be regulated, that the
State's ability to extend its tax out, its tax through a company
without much nexus to the State that sells into the State can be
regulated, but that is not this.
What this says is: We are going to limit the State's ability to tax
economic activity that occurs entirely within the State.
Now, one might argue that if someone only spends a couple days in the
State, you shouldn't tax that because it will discourage doing business
in the State; and maybe if I were still a member of the State
legislature, maybe I
[[Page H5772]]
would argue that. But that is an argument for the State legislature. It
is not an argument for Congress. That is an argument on the economic
merits of the State's exercise of its own tax powers and its own
judgment within its own borders. For Congress to step in and say: New
York must forgo $125 million in revenue or some other State must forgo
$55 million or maybe $22.38 entirely based on economic activity within
that State is, frankly, none of our business.
Today we talk about the burden that this imposes. Yes, a State might
be wise to exempt small amounts of income so you don't need 50 W-2s to
someone who earns a total of $50,000, but for someone who earns $50
million and may earn $20 million in a couple of days in a State, that
State ought to be able to tax it, and it ought to be up to the economic
and political judgment of that State as to how, in the interests of
economic intelligence, to limit its exercise of its taxing power so as
not to discourage business. That is a State's decision.
We hear a lot of rhetoric about States' rights and sovereignty and
yielding power to the States on the floor, but here is an example going
much farther than anything else I have seen, frankly, of the Federal
Government stepping in and saying to a State: You may not exercise your
taxing power within your State when it has nothing to do with another
State.
If someone comes into the State and earns $50 million in 10 days or 3
weeks or 4\1/2\ weeks, why shouldn't that State be able to tax it if it
wishes to? By what right does Congress tell it that it can't? By what
right does Congress tell New York: You must forgo $100 to $125 million
in revenue?
Even the efficiency argument doesn't make much sense with today's
computers and computer ability.
So I think that this is an invasion of States' rights. It is an
invasion of the core ability of the State to tax within its own
borders. It is an invasion of--it is not a theft--it is a deprivation,
my own State is about $125 million, which our taxpayers will have to
make up, and it is wrong for that reason.
Now, I understand why ALEC might support this bill. ALEC wants
government to do nothing, wants the Federal Government not to tax, the
State governments not to tax, and have as little power as possible.
That is a view, but it is not a view that justifies the Federal
Government telling a State and telling the States' voters that, whether
they like it or not, they shouldn't tax economic activity within that
State, they should come up with the money some other way or they should
have less State services. That is for the States' taxpayers, the
States' voters to decide.
This bill is an imposition on the States. It is an imposition on the
people of the States. It is wrong.
Mr. Speaker, I yield back the balance of my time.
Mr. BISHOP of Michigan. Mr. Speaker, how much time is remaining?
The SPEAKER pro tempore. The gentleman has 9\1/2\ minutes remaining.
Mr. BISHOP of Michigan. Mr. Speaker, I yield myself such time as I
may consume.
Mr. Speaker, before I came to the United States Congress, I served as
general counsel and chief legal officer for a small business. One of my
primary functions was to ensure compliance on the patchwork of
government requirements and issues that presented itself every day. It
was a huge burden for our company. It was a huge burden for the
employees of our company.
This is exactly what we are talking about today. This is the exact
kind of compliance that is choking out small business and really,
really falling on the shoulders of those who can least afford it.
Mr. Speaker, this is a commonsense solution to a real problem. We
live in a global economy. It is something we can't deny. Our mobile
workforce is there, and it is going to continue to grow. We cannot
continue to penalize companies and individuals for that fact.
We have 180 cosponsors for this that accede the exact basis for what
we are trying to accomplish here. These are bipartisan folks--
Republicans and Democrats. The same is true with a companion bill in
the Senate. There are lots and lots of outside groups that support it,
not just specific legislative groups, but businesses that deal with
this every day.
So I am very proud of this bill. I am grateful to Representative
Johnson of Georgia for his work on the bill.
Mr. Speaker, I urge all Members to support the bill.
I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Michigan (Mr. Bishop) that the House suspend the rules
and pass the bill, H.R. 2315.
The question was taken; and (two-thirds being in the affirmative) the
rules were suspended and the bill was passed.
A motion to reconsider was laid on the table.
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