Mobile Workforce State Income Tax Simplification Act of 2012
Floor Speech
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Mr. JOHNSON of Georgia. Mr. Speaker, I yield myself such time as I may consume.
I rise today in strong support of H.R. 1864, the Mobile Workforce State Income Tax Simplification Act. This is an important bipartisan bill that will help all workers across the country. It will also help businesses, large and small.
I have been working on this bill since I was a freshman in the 110th Congress, at which time Chris Cannon from Utah, a former Member, was the lead sponsor. In the 111th Congress, I was the lead sponsor on H.R. 1864 as it is known now. This term, the 112th Congress, Mr. Coble, whom I have been quite pleased to work with, has been the lead sponsor. Again, he is a good friend of mine, and I appreciate the opportunity to work with him.
H.R. 1864 provides for a uniform and easily administered law that would ensure the correct amount of taxes withheld and paid to the States without the undue burden the current system places on employees and employers. From a national perspective, the Mobile Workforce bill will vastly simplify the patchwork of inconsistent and confusing State rules. It would also reduce administrative costs to States and lessen compliance burdens on American workers.
Take my home State of Georgia, for instance. If an Atlanta-based employee of a St. Louis company travels to headquarters on a business trip once per year, that employee is required to file a Missouri tax return, even if her annual visit only lasts for 1 day. However, if that employee travels to Maine, she would not be required to file a Maine tax return unless her trips lasts for 10 days. If she travels to Arizona on business, she would only have to file an Arizona income tax return if she was in the State for more than 60 days.
In each case, her employer is also liable for withholding those States' taxes out of her paycheck, and the only way she can avoid double taxation is if she files for a credit for each State's tax in her resident State.
H.R. 1864 would fix this problem by establishing a uniform threshold before State income tax laws would apply to traveling employees. This bill would protect employees who perform employment duties in a nonresident State if they work in the State for less than 30 days. Until that threshold is reached, they will continue to pay in their State of residency.
When I initially started working on this bill, the withholding threshold was 60 days. In response to the concerns by the Federation of Tax Administrators, I sought a compromise and lowered the threshold to 30 days. I understand that the FTA may still have some concerns about the bill, but I believe that it is a good bill that addresses the bulk of their concerns. The FTA's concerns have certainly not been ignored.
In addition to lowering the day threshold, we also worked to clarify that the bill's operating rules were not drafted to avoid paying withholding tax, and clarified if an employer has a time and attendance system designed to allocate wages among States, it must be used.
At a time when more and more Americans find themselves traveling for their job, this bill is a commonsense solution that helps workers who are employed in multiple States by simplifying the tax reporting requirements for them and for their employers.
Madam Speaker, for the vast majority of States, this bill carries a minimal or no revenue impact. In fact, this bill will greatly increase compliance rates. This bill will end up saving States the administrative costs of processing and remitting thousands of small returns from nonresidents.
While nothing is perfect, and the Federation of Tax Administrators may still have some concerns, this bill is truly the product of years of working with the States on an approach that balances their concerns with administrative ease and efficiency for employers and employees. This is truly a bipartisan effort that seeks to simplify State tax compliance, not reduce State taxes.
I yield back the balance of my time.
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