This bill would add a new section to title 4 of the U.S. Code that limits how States can tax wages and other pay earned by nonresident telecommuters and other workers who work in more than one State. A State could treat a nonresident as present and tax their pay for a period only if the person is physically present in that State for that period. A State could not tax pay for time when the worker is physically present in another State.
The bill bars States from counting a person as present just because they work at home for convenience or because the worker fails a "convenience of the employer" test or similar test. It also says States cannot reclassify time a person spends in another State as nonwork time, unpaid time, or time that is not normal work time unless the employer calls it that.
The bill defines terms such as State, income tax, income tax laws, nonresident individual, employee, employer, and compensation. It says the section applies only to income tax laws and does not change how other taxes or the taxes of businesses and other entities are handled. The changes take effect when the bill is enacted.
If enacted, the bill would limit when a State can tax pay for people who work across State lines or telework from another State. A State could tax your wage for a period only if you are physically in that State during that time. States could not use a convenience-of-the-employer rule to treat you as working in their State when you are physically elsewhere. Employers would have the authority to designate whether time is normal work time, nonworking time, or unpaid time for these purposes.
The rule applies only to State income taxes and only to pay for personal services by employees or independent contractors.
No publicly available information on projected federal costs or State revenue effects is included in the bill text or metadata.
No publicly available information.
No publicly available information.