Skip to content

Congress to Hear Testimony on Simplifying Rules for Business Traveler Taxes

1 min readBy: Joseph Bishop-Henchman

On April 13, the U.S. House Small Business Committee’s Subcommittee on Economic Growth, TaxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. , and Capital Access will be holding two hearings on improving the tax system. The second afternoon hearing at 2:30 PM will be testimony by IRS Commissioner John Koskinen, and the tax community will be eager to see what he has to say. The first hearing at 11:00 AM shouldn’t be missed either, though, because it will focus on the proposed Mobile Workforce bill.

The Mobile Workforce State Income Tax Simplification Act of 2015 (H.R. 2315 / S. 386) limits states from imposing or collecting individual income taxAn individual income tax (or personal income tax) is levied on the wages, salaries, investments, or other forms of income an individual or household earns. The U.S. imposes a progressive income tax where rates increase with income. The Federal Income Tax was established in 1913 with the ratification of the 16th Amendment. Though barely 100 years old, individual income taxes are the largest source of tax revenue in the U.S. on those who are in the state for less than 30 days. Most states technically require such payments when someone is in the state for even a day (see map), and even withholdingWithholding is the income an employer takes out of an employee’s paycheck and remits to the federal, state, and/or local government. It is calculated based on the amount of income earned, the taxpayer’s filing status, the number of allowances claimed, and any additional amount of the employee requests. to be set up in advance. We’re increasingly hearing horror stories of states trying to collect these sums. Since all states provide a credit for taxes paid to another state, making people fill out 20 or 30 tax returns for a net national wash is lunacy. Most everyone, except New York officials and state tax administrators, support this legislation. (State tax administrators instead urge states to voluntarily adopt a more convoluted model, which no state has.) However, the bill excludes entertainers and athletes from its protections, which it shouldn’t.

Lead sponsors of Mobile Workforce are Reps. Mike Bishop (R-MI) and Hank Johnson (D-GA) on the House side and Sen. Sherrod Brown (D-OH) and John Thune (R-SD) on the Senate side.