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Mobile Workforce State Income Tax Simplification Act of 2012

Floor Speech

Location: Washington, DC


Mr. SMITH of Texas. Madam Speaker, the American workforce is increasingly mobile. Fifty years ago, most people worked in the communities in which they lived. Today, many more Americans travel to other states for work.

The complexity and variation among state income tax laws is a burden on interstate commerce. In some states, for example, a non-resident employee must pay income tax if they work there for only one day. But in other states, income tax liability is not triggered until the 60th day.

Under this current patchwork system, employees who travel out of state for work must file tax returns in other jurisdictions even if their ultimate tax liability to a state is a few dollars.

In addition to burdening our interstate employees, different state income tax laws require employers to comply with a wide variety of tax withholding laws. Many of those employers are small businesses who can least afford these administrative costs.

This bipartisan bill, the Mobile Workforce State Income Tax Simplification Act, is sponsored by the Chairman of the Judiciary Committee's Subcommittee on Courts, Commercial and Administrative Law, Howard Coble. I also appreciate Congressman Hank Johnson's cosponsorship of this legislation.

This bill simplifies state income tax policies without infringing on the rights of states to set their own tax rates. The bill provides that a state may not impose its income tax on non-resident employees unless they earn wages in the state for more than 30 days. The employee would still owe an income tax to their state of residence for wages earned during the first 30 days they work in a non-resident state.

This bill eases the burden that the current patchwork of state income tax laws places on traveling employees and small businesses. So rather than increasing the expense of navigating the maze of tax rules, businesses can use their resources to invest in creating jobs for American workers.

Finally, the bill we consider today reflects a few changes that were made at the request of state taxing authorities. I am pleased that the sponsors of the legislation were able to work cooperatively with all interested parties to bring a compromise version to the floor.

I encourage my colleagues to vote ``yes'' on the bill.


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