House Committee Approves Bill Limiting State Taxation of Business Travelers

November 17, 2011

Today, the House Judiciary Committee approved H.R. 1864, the Mobile Workforce State Income Tax Simplification Act, on a bipartisan vote. The bill sets a minimum threshold for states to subject individuals to their state income tax: presence of at least 30 days in the state. Currently, most states require tax payments and even tax withholding for workers in the state for much shorter periods of time, including as little as a day.

The vote occurred after an alternative (14 day threshold and no protection for those earning over $130,000) was defeated.

Growing state efforts to raid revenue from business travelers who are in the state for only a few days have created needless complexity and threaten to harm interstate commerce. The Constitution empowers Congress to limit the power of states to tax interstate commerce. Prohibiting states from requiring payment or withholding of income taxes from someone in the state for less than 30 days is a fair balance. However, the exclusion of professional athletes—many of whom are not wealthy stars—is unfortunate.

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