Bipartisan, bicameral legislation reintroduced by U.S. Rep. Mike Bishop (R-MI) on Tuesday would simplify income tax requirements for those who spend multiple days per year working outside of their home state.
The Mobile Workforce State Income Tax Simplification Act would establish that an employee’s earnings are subject to the full tax of his or her home state — unless the employee spends more than 30 days per calendar year working in another state.
“Our state income tax structure is too complicated and costly for today’s workforce,” Bishop said. “Right now, workers who must travel out of state and their respective employers face dozens of erroneous reporting requirements, many of which depend on varying length of travel and income levels. The goal of our bipartisan legislation is to create one simplified system for Americans to do their state income taxes, eliminating the burdensome paperwork and reducing compliance costs for everyone involved.”
Under current tax law, many employees are required to file income tax returns in each state they travel to for work, and businesses are required to comply with varying state requirements for employee travel.
U.S. Rep. Hank Johnson (D-GA), who sponsored the bill with Bishop, said the measure would streamline the tax code while reflecting the needs of various industries around the country.
“Simplifying our tax system in this manner will help Americans who work across multiple jurisdictions from paying local or state taxes in places other than where they live or work for an extended period of time,” Johnson said.
The House approved the bill during the 114th Congress with bipartisan support. The legislation is led by U.S. Sens. John Thune (R-SD) and Sherrod Brown (D-OH) in the Senate.