June 21, 2017
The U.S. House of Representatives has passed the Mobile Workforce State Income Tax Simplification Act of 2017, H.R. 1393, which is intended to simplify state income tax reporting and withholding rules for employees who sometimes work outside their home states.
The bipartisan legislation had the active backing of Texas U.S. Representatives Mike Conaway (R-11), John Culberson (R-7), Louie Gohmert (R-1), Jeb Hensarling (R-5), Will Hurd (R-23), Sheila Jackson Lee (D-18), Michael McCaul (R-10), Pete Sessions (R-32) and Lamar Smith (R-21).
“We appreciate the support of members of our congressional delegation who sponsored the measure. Their involvement was instrumental in the bill’s passage,” said Texas Society of CPAs (TSCPA) Executive Director/CEO Jodi Ann Ray.
“The House’s passage of the Mobile Workforce State Income Tax Simplification Act of 2017 is a victory for taxpayers and their employers,” Barry C. Melancon, CPA, CGMA, president and CEO of the American Institute of CPAs (AICPA), stated. “Enactment of H.R. 1393 would eliminate the need for much of the complex recordkeeping that employers face when their employees cross state lines to work. It also would relieve many workers of the burden of filing state income tax returns for states in which they worked only a few days during the year.”
The legislation calls for the creation of a uniform national standard that would eliminate the compliance maze many employers and employees currently confront. Employee earnings would not be subject to state income tax and withholding outside their home state unless the employee worked in a state for more than 30 days during the calendar year.
Identical legislation, S. 540, is awaiting Senate consideration. “TSCPA joins AICPA in urging the Senate to pass its companion bill soon so that thousands of employers and employees can be relieved of the burden imposed by inconsistent state tax laws,” said Ray.