House Judiciary Committee Approves Mobile Workforce State Income Tax Simplification Act

Press Release

Today the House Judiciary Committee approved the Mobile Workforce State Income Tax Simplification Act of 2015 (H.R. 2315), by a vote of 23-4.

The Mobile Workforce State Income Tax Simplification Act of 2015 is a bipartisan measure, which provides a clear, uniform framework for when states may tax nonresident employees who travel to the taxing state to perform work. In particular, the 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 legislation would substantially simplify state income tax laws by imposing a uniform standard for when a state can tax a nonresident taxation and employer withholding.

Chairman Goodlatte applauded the Committee's passage of the legislation, and the leadership taken by Judiciary Committee member Rep. Mike Bishop (R-Mich.).

Chairman Goodlatte: "The Committee's approval of the Mobile Workforce State Income Tax Simplification Act of 2015 is a significant victory for small and family businesses who are subjected to significant regulatory burdens just because they send employees across state lines to get a job done. The regulatory compliance costs divert the resources of these small businesses away from growth and the higher costs are ultimately passed on to consumers. To demonstrate the legal morass these rules create, one manufacturer testified before the Judiciary Committee this year that it had to issue 50 W-2's for a single employee in a single year.

"On a larger scale, these regulatory costs stifle interstate commerce. The Mobile Workforce State Income Tax Simplification Act of 2015 ensures that a fair balance is struck between states wishing to collect taxes on income earned in the state while limiting the regulatory burden already being imposed on small business and hardworking Americans."

Congressman Bishop: "With so many burdensome regulations in today's tax code, I applaud the House Judiciary Committee on advancing this bipartisan bill to streamline state income tax filing and reporting standards. By simplifying these requirements, we can reduce compliance costs and confusing paperwork for employees and their employers. I will continue fighting for America's workforce and look forward to bringing this legislation to the House floor."

Background on the Mobile Workforce State Income Tax Simplification Act of 2015

Forty-three states and the District of Columbia levy a personal income tax on wages and partnership income.

The state tax laws that determine when a nonresident must pay the foreign state's income tax, and when employers must withhold this tax, are numerous and varied.

The bill provides that an employee is not subject to income tax in a nonresident state unless the employee has worked for at least 30 days in that jurisdiction.

The legislation further provides that an employer is not responsible for withholding on behalf of any employee who is not subject to a state income tax as a result of the bill.

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