Senator Sherrod Brown, a Democrat from Ohio, introduced the AICPA-backed Mobile Workforce State Income Tax Simplification Act of 2011, S. 3485, on Aug. 2, 2012. The bill would establish a uniform national standard governing the withholding of state income taxes for nonresident employees. It includes several key components designed to alleviate the burden the current state income tax withholding system places on traveling employees and their employers. For the vast majority of states, the legislation contains minimal or no revenue impact.
“By introducing this legislation, Senator Brown helps continue the momentum in the Senate that we gained by the bill’s passage in the House,” said Barry C. Melancon, CPA, CGMA, president and CEO of the American Institute of CPAs.
The U.S. House of Representatives passed H.R. 1864, its version of the Mobile Workforce State Income Tax Simplification Act of 2011, by voice vote on May 15.
Both bills would establish a uniform requirement that nonresidents would have to work in a state for more than thirty days before becoming subject to out-of-state income taxes. The change would make state income tax withholding easier to administer and would help ensure that states and local jurisdictions get the taxes they are owed.
The AICPA is a leading member of the Mobile Workforce Coalition, which is working with Senators to pass the legislation. Recently, the AICPA was a signatory to a Coalition letter sent to Senate Majority Leader Harry Reid and Senate Minority Leader Mitch McConnell urging that S. 3485 be considered by the Senate.
The AICPA is coordinating grassroots efforts with the state CPA societies and with members of the Mobile Workforce Coalition to obtain Senate cosponsors to S. 3485.
“Senator Brown’s legislation is an important first step in the Senate. We applaud his effort, and we look forward to working with him to gain passage of this important measure and to it being signed into law,” Melancon added.