Coble and Johnson introduce tax simplification bill
(Washington, D.C.)----In an effort to assist workers in an increasingly-mobile economy who are employed in multiple jurisdictions, representatives from North Carolina and Georgia are introducing legislation to simplify workers’ tax reporting requirements. U.S. Reps. Howard Coble (R-NC) and Hank Johnson (D-GA) today introduced the Mobile Workforce State Income Tax Simplification Act of 2011 (H.R. 1864).
“This legislation provides for a uniform, fair and easily administered law and would ensure that the correct amount of tax is withheld and paid to the states without the undue burden that the current system places on employees and employers,” Rep. Coble stated. “Consistent with current law, the bill provides that an employee’s earnings are subject to full tax in his/her state of residence. In addition, under the legislation, an employee’s earnings would be subject to tax in the state(s) within which the employee is present and performing employment duties for more than 30 days during the calendar year.”
Longtime champion of this legislation and original sponsor Rep. Hank Johnson of Georgia added, “This not only simplifies the system, but makes it fair for people who work in multiple jurisdictions.”
States currently have widely varying and inconsistent standards regarding the requirements for employees to file personal income tax returns when traveling to a nonresident state for temporary work periods and for employers to withhold income tax on employees who travel outside of their state of residence for temporary work periods. Employees who travel outside of their state of residence for business purposes are subject to onerous administrative burdens because, in addition to filing federal and resident state income tax returns, they may also be legally required to file an income tax return in every other state into which they traveled, even if they were there for only one day. Employers are required to incur extraordinary expenses in their efforts to comply with the states’ widely divergent withholding requirements for employees’ travel to nonresident states for temporary work periods.
“The bottom line is simple,” Rep. Coble concluded. “It would prevent Americans who work in multiple jurisdictions from being taxed by state and local governments other than the places in which they live or perform duties over an extended period.”
Rep. Coble is Chairman and Rep. Johnson is a member of the House Judiciary Subcommittee on Courts, Commercial and Administrative Law. The bill is expected to be referred to that subcommittee for consideration.