HR 2600 IHCommentsClose CommentsPermalink

To amend title 4 of the United States Code to limit the extent to which States may tax the compensation earned by nonresident telecommuters.CommentsClose CommentsPermalink

May 21, 2009CommentsClose CommentsPermalink

Mr. HIMES (for himself, Mr. WOLF, Mr. NYE, Mr. CONNOLLY of Virginia, Mr. MCGOVERN, Mr. SARBANES, Mr. JOHNSON of Georgia, Ms. DELAURO, Mr. LANCE, and Ms. BEAN) introduced the following bill; which was referred to the Committee on the JudiciaryCommentsClose CommentsPermalink

To amend title 4 of the United States Code to limit the extent to which States may tax the compensation earned by nonresident telecommuters.CommentsClose CommentsPermalink

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,CommentsClose CommentsPermalink

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘Telecommuter Tax Fairness Act of 2009’.CommentsClose CommentsPermalink

SEC. 2. LIMITATION ON STATE TAXATION OF COMPENSATION EARNED BY NONRESIDENT TELECOMMUTERS.

(a) In General- Chapter 4 of title 4, United States Code, is amended by adding at the end the following new section:CommentsClose CommentsPermalink

‘Sec. 127. Limitation on State taxation of compensation earned by nonresident telecommuters

‘(a) In General- In applying its income tax laws to the compensation of a nonresident individual, a State may deem such nonresident individual to be present in or working in such State for any period of time only if such nonresident individual is physically present in such State for such period and such State may not impose nonresident income taxes on such compensation with respect to any period of time when such nonresident individual is physically present in another State.CommentsClose CommentsPermalink





‘(b) Determination of Physical Presence- For purposes of determining physical presence, no State may deem a nonresident individual to be present in or working in such State on the grounds that--CommentsClose CommentsPermalink





‘(1) such nonresident individual is present at or working at home for convenience, orCommentsClose CommentsPermalink





‘(2) such nonresident individual’s work at home or office at home fails any convenience of the employer test or any similar test.CommentsClose CommentsPermalink





‘(c) Determination of Periods of Time With Respect to Which Compensation Is Paid- For purposes of determining the periods of time with respect to which compensation is paid, no State may deem a period of time during which a nonresident individual is physically present in another State and performing certain tasks in such other State to be--CommentsClose CommentsPermalink





‘(1) time that is not normal work time unless such individual’s employer deems such period to be time that is not normal work time,CommentsClose CommentsPermalink





‘(2) nonworking time unless such individual’s employer deems such period to be nonworking time, orCommentsClose CommentsPermalink





‘(3) time with respect to which no compensation is paid unless such individual’s employer deems such period to be time with respect to which no compensation is paid.CommentsClose CommentsPermalink





‘(d) Definitions- As used in this section--CommentsClose CommentsPermalink





‘(1) STATE- The term ‘State’ means each of the several States (or any subdivision thereof), the District of Columbia, and any territory or possession of the United States.CommentsClose CommentsPermalink





‘(2) INCOME TAX- The term ‘income tax’ has the meaning given such term by section 110(c).CommentsClose CommentsPermalink





‘(3) INCOME TAX LAWS- The term ‘income tax laws’ includes any statutes, regulations, administrative practices, administrative interpretations, and judicial decisions.CommentsClose CommentsPermalink





‘(4) NONRESIDENT INDIVIDUAL- The term ‘nonresident individual’ means an individual who is not a resident of the State applying its income tax laws to such individual.CommentsClose CommentsPermalink





‘(5) EMPLOYEE- The term ‘employee’ means an employee as defined by the State in which the nonresident individual is physically present and performing personal services for compensation.CommentsClose CommentsPermalink





‘(6) EMPLOYER- The term ‘employer’ means the person having control of the payment of an individual’s compensation.CommentsClose CommentsPermalink





‘(7) COMPENSATION- The term ‘compensation’ means the salary, wages, or other remuneration earned by an individual for personal services performed as an employee or as an independent contractor.CommentsClose CommentsPermalink





‘(e) No Inference- Nothing in this section shall be construed as bearing on--CommentsClose CommentsPermalink





‘(1) any tax laws other than income tax laws,CommentsClose CommentsPermalink





‘(2) the taxation of corporations, partnerships, trusts, estates, limited liability companies, or other entities, organizations, or persons other than nonresident individuals in their capacities as employees or independent contractors,CommentsClose CommentsPermalink





‘(3) the taxation of individuals in their capacities as shareholders, partners, trust and estate beneficiaries, members or managers of limited liability companies, or in any similar capacities, andCommentsClose CommentsPermalink





‘(4) the income taxation of dividends, interest, annuities, rents, royalties, or other forms of unearned income.’.CommentsClose CommentsPermalink





(b) Clerical Amendment- The table of sections of such chapter 4 is amended by adding at the end the following new item:CommentsClose CommentsPermalink





‘127. Limitation on State taxation of compensation earned by nonresident telecommuters.’.CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall take effect on the date of the enactment of this Act.CommentsClose CommentsPermalink