Bob Goodlatte: “The Mobile Workforce State Income Tax Simplification Act provides a clear, uniform framework for when States may tax…”

“The Mobile Workforce State Income Tax Simplification Act provides a clear, uniform framework for when States may tax nonresident employees who travel to the taxing State to perform work. In particular, this 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 State tax laws that determine when a nonresident must pay a foreign State's income tax and when employers must withhold this tax are numerous and varied. Some States tax income earned within their borders by nonresidents even if the employee only works in the State for just 1 day. These complicated rules impact everyone who travels for work and many industries. As just one example, the Judiciary Committee heard testimony in 2015 that the patchwork of State laws resulted in a manufacturing company issuing 50 W-2s to a single employee for a single year. The company executive also noted, regarding the compliance burden: many of our affected employees make less than $50,000 per year and have limited resources to seek professional advice. States generally allow a credit for income taxes paid to another State. However, it is not always dollar for dollar when local taxes are factored in. Credits also do not relieve workers of substantial paperwork burdens. There are substantial burdens on employers as well.…”