A bipartisan group of U.S. Senators introduced the “Mobile Workforce State Income Tax Simplification Act” in the Senate on March 1, 2019. The bill, which has more than two dozen co-sponsors from both political parties, is the same as legislation that has passed the House on several occasions but has not been approved by the Senate. The same legislation is expected to be introduced in the House again this session.
The proposed legislation would hold that a nonresident working in a state must work there for at least 30 days during the year to be taxable in the state. It would eliminate a problem created by each state imposing its own rules on when and if out-of-state workers become taxable. Worldwide ERC® continues to support the legislation.
Once introduced in the House, it is expected that the legislation will again move forward. Last year’s effort accumulated some 61 co-sponsors in the Senate, and easily passed the House.
However, success is once again uncertain. The legislation is opposed by the powerful New York delegation in the House and Senate because it would cost New York millions in lost taxes. Senate Minority Leader Schumer (NY) has until now prevented the legislation from achieving a vote of the full senate. However, the legislation has the backing of a coalition of large corporations, which will continue to work for its passage.
Worldwide ERC® members currently operate in a confusing environment which requires a state-by-state determination of when taxation and withholding should begin. The Mobile Workforce Act would resolve that problem in a very favorable way.