The House Judiciary Committee approved the Mobile Workforce State Income Tax Simplification Act of 2017 on March 22 and sent it to the full U.S. House of Representatives for a vote. The House bill, H.R. 1393, and an identical Senate companion bill, S. 540, were introduced on March 7. The bills are endorsed by the American Institute of CPAs (AICPA).
H.R. 1393 and S. 540 were introduced by Representatives Mike Bishop (R-Mich.) and Hank Johnson (D-Ga.) and Senators John Thune (R-S.D.) and Sherrod Brown (D-Ohio). H.R. 1393 has 36 co-sponsors and S. 540 has 19 co-sponsors.
The legislation would simplify the complex tax reporting rules employers and employees face as a result of numerous state income tax withholding laws and varying de minimis exemption periods when employees work outside their home states. The legislation would create a uniform national standard and would significantly simplify compliance with all the different state laws. The earnings of employees would not be subject to state income tax and withholding outside their home state unless the employee works in a state for more than 30 days during the calendar year.
The AICPA worked with the sponsors of the legislation to add helpful modifications to the legislation that is similar to what has been introduced in previous Congresses. H.R. 1393 and S. 540 clarify that the exemption from the 30-day de minimis period applies to professional athletes, professional entertainers and public figures. So, notable individuals still have to pay tax to the state where they are appearing, but non-headline performers, including dancers and musicians, would be covered by the 30-day national standard.
In a statement released following introduction of the bills, Barry C. Melancon, CPA, CGMA, president and CEO of the AICPA, stated, “The AICPA strongly supports the Mobile Workforce State Income Tax Simplification Act of 2017. This legislation strikes an equitable balance, and we urge Congress to take swift action so the bill can become law and relieve the burden imposed on countless U.S. employers and employees by inconsistent state tax laws.”
“The AICPA appreciates the leadership of Representatives Bishop and Johnson and Senators Thune and Brown in championing the Mobile Workforce State Income Tax Simplification Act of 2017,” Melancon stated. “The large number of original co-sponsors on both bills is an indication of the broad, bi-partisan support for this legislation and a reflection of the momentum that built up on this issue in the last Congress that culminated in the House’s passage of similar legislation.”
Watch the AICPA video for more details about the mobile workforce legislation.