109th CONGRESS
2d Session
H. R. 6167
To limit the authority of States and localities to tax certain
income of employees for employment duties performed in other States and
localities.
IN THE HOUSE OF REPRESENTATIVES
September 25, 2006
Mr. CANNON introduced the following bill; which was referred to the Committee
on the Judiciary
A BILL
To limit the authority of States and localities to tax certain
income of employees for employment duties performed in other States and
localities.
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 Fairness
and Simplification Act of 2006'.
SEC. 2. LIMITATIONS ON STATE AND LOCALITY WITHHOLDING AND TAXATION OF
EMPLOYEE INCOME.
(a) In General- No part of the wages or other remuneration paid to an employee
who performs duties in more than one State or locality shall be subject
to the income tax laws of any State or locality other than--
(1) the State or locality of the employee's residence; and
(2) the State or locality in which the employee is physically present
performing duties for more than 60 days during the calendar year in which
the income is taxed.
(b) Wages or Other Remuneration- Wages or other remuneration paid in any
calendar year are not subject to State or locality income tax withholding
and reporting unless the employee is subject to income tax under subsection
(a). Income tax withholding and reporting under subsection (a)(2) shall
apply to wages or other remuneration paid as of the commencement date of
duties in the State or locality during the calendar year.
(c) Operating Rules- For purposes of determining an employer's State income
tax withholding and information return obligations--
(1) an employer may rely on an employee's determination of the time expected
to be spent by such employee in the States or localities in which the
employee will perform duties absent--
(A) actual knowledge of fraud by the employee in making the estimate;
or
(B) collusion between the employer and the employee to evade tax; and
(2) if records are maintained by an employer recording the location of
an employee for other business purposes, such records shall not preclude
an employer's ability to rely on an employee's determination as set forth
in paragraph (1).
(d) Definitions and Special Rules- For purposes of this Act:
(1) DAY- An employee will be considered physically present and performing
duties in a State or locality for a day if the employee performs more
than 50 percent of the employee's employment duties in such State or locality
for such day.
(2) EMPLOYEE- The term `employee' shall be defined by the State or locality
in which the duties are performed, except that the term `employee' shall
not include a professional athlete or entertainer.
(3) 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)) or shall
be defined by the State or locality in which the duties are performed.
(4) LOCALITY- The term `locality' means any political subdivision, agency,
or instrumentality of a State.
(5) STATE- The term `State' means each of the several States (or any subdivision
thereof), or any territory or possession of the United States.
(6) WAGES OR OTHER REMUNERATION- The term `wages or other remuneration'
shall be defined by the State or locality in which the employment duties
are performed.
END
