Reps. Johnson, Coble introduce tax simplification bill

WASHINGTON, D.C. - In an effort to assist workers in an increasingly mobile economy who are employed in multiple jurisdictions, representatives from North Carolina and Georgia are introducing bipartisan legislation to simplify workers’ tax reporting requirements. U.S. Reps. Hank Johnson (D-GA) and Howard Coble (R-NC) today introduced the Mobile Workforce State Income Tax Simplification Act of 2011 (H.R. 1864).

“Under current law, some workers must file income tax forms for doing work in states other than where they reside or their employer is headquartered,” said Johnson. “This hurts small businesses and individuals, especially as we recover from the recession. Our Mobile Workforce legislation not only simplifies the system, but makes it uniform for people who work in multiple jurisdictions.”

States currently have widely varying and inconsistent standards regarding the requirements for employees to file personal income tax returns when traveling to a nonresident state for temporary work periods and for employers to withhold income tax on employees who travel outside of their state of residence for temporary work periods.

“This legislation provides for a uniform, fair and easily administered law,” Rep. Coble added.

Employees who travel outside of their state of residence for business purposes are subject to onerous administrative burdens because, in addition to filing federal and resident state income tax returns, they may also be legally required to file an income tax return in every other state into which they traveled, even if they were there for only one day. Employers are required to incur extraordinary expenses in their efforts to comply with the states’ widely divergent withholding requirements for employees’ travel to nonresident states for temporary work periods.

“The tax system is already too burdensome and complicated as it is. This simplifies the code and would prevent Americans who work in multiple jurisdictions from being taxed by state and local governments other than the places in which they live or perform duties over an extended period.” Rep. Johnson concluded.

Rep. Johnson is a member of the House Judiciary Subcommittee on Courts, Commercial and Administrative Law; Mr. Coble is Chairman. The bill is expected to be referred to that subcommittee for consideration.

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