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The House of Representatives this week, passed the Mobile Workforce State Income Tax Simplification Act (H.R. 1393) by a simple voice vote. Passage of the bill with such broad, bipartisan support should send a message to the Senate that it’s now time for that chamber to act accordingly and deliver its own bill (S. 540) for the president’s signature immediately. Many in the IT industry have been monitoring the proposal closely, as it reflects a changing economic landscape and would streamline some of our tax collection laws.
The Mobile Workforce State Income Tax Simplification Act (“Mobile Workforce Act”) would establish a national standard for state income taxation of non-residents, allowing employee wages or compensation to be taxed only by the employee’s resident state, and those states in which an employee is present and performing employment duties for more than 30 days during a calendar year. The bill does not exempt employees from state taxes, rather it provides much needed clarity for a workforce that’s increasingly on the move. Unfortunately, many individuals are unaware of the current patchwork of non-resident state income tax filing rules, and employers must incur extraordinary expenses to comply with withholding requirements. CompTIA supports legislation that simplifies tax requirements for non-resident employees and employers.
The 21st century has ushered in some pretty radical changes in how we work and travel. Today’s technology allows employees to work remotely, bringing their problem-solving skills with them, and meeting customer needs wherever they may be. The fact is, our economy demands a flexible workforce that can commute to jobsites wherever they may be.
Unfortunately, as is often the case, the nation’s policies haven’t kept pace with this shifting landscape. As has been outlined in this space before, our nation’s current tax laws aren’t all that promising for innovators. Too often these laws are acting as roadblocks to novel ideas and economic growth. Whether it is debilitatingly high rates or confusing requirements, our outdated tax system is stifling growth. And that’s why we are so excited to see the passage of the Mobile Workforce Act in the House of Representatives gain such overwhelming support. This bill would go a long way in streamlining tax laws, and most importantly, reduce risks and burdens for companies and their employees. It’s now up to the Senate to pass its bill to ensure our tax laws enable –not inhibit –growth.
Geoff Lane is CompTIA’s director of government affairs.