Filing State Income
Tax Withholding Reforms
Mobile Workforce State
Income Tax Simplification
Act (S. 386/H.R. 2315)
Issue Background
States currently have varying and inconsistent standards regarding the tax requirements for employees to
file personal income tax returns when traveling across
state lines for short periods of time. Standards also
are inconsistent about requiring employers to withhold
income tax on those employees who travel for work to
multiple states. For example, in some states, nonresident workers may be legally required to file an income
tax return even if they were only in the state for one day.
In other states, anyone traveling to that state to close a
sale, meet with a client or simply attend a conference
will have to file a W-2 with that state.
WorldatWork’s Position
WorldatWork supports the Mobile Workforce State
Income Tax Simplification Act (S. 386/H.R. 2315).
The legislation would establish a 30-day threshold test
for state income tax withholding purposes and alleviate
the complicated tax reporting burdens some employees
face when they travel for work to multiple states within
the United States.
As a result, employers are required to incur extraordinary expenses in their efforts to comply with the states’
widely divergent withholding requirements for employee
travel to nonresident states for temporary work periods.
This requirement can lead to scenarios in which a
company with 7,000 employees traveling for domestic
WorldatWork is a member of the Mobile Workforce
Coalition, a group of more than 275 companies and
organizations supporting the Mobile Workforce
State Income Tax Simplification Act in the 114th
U.S. Congress.
Nonresident Personal Income Tax Withholding
Nonresident Personal Income Tax Withholding, by U.S. State
WA
MT
ME
ND
OR
VT
MN
ID
WI
SD
MI
NY
WY
UT
CA
IL
NJ
OH
IN
WV
CO
KS
AZ
PA
IA
NE
NV
MO
OK
NM
VA
KY
DE
MD
NC
TN
AR
Nonresident employees
subject to tax after reaching
state time threshold
SC
MS
AK
TX
NH
MA
CT
RI
Nonresident employees
subject to tax on first day
of travel
GA
AL
No general personal income
tax or no tax on nonresidents
(D.C.)
LA
HI
FL
Source: Council on State Taxation, www.cost.org
Key
Nonresident employees subject to tax withholding on first day of travel
Nonresident employees subject to tax withholding after reaching threshold (see Appendix A for details)
No general personal income tax (or, in the case of Washington, DC, no tax on nonresidents)
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Filing State Income
Tax Withholding Reforms
business may have to file 10,500 W-2s on behalf of its
workforce each year. This administrative burden is much
higher on employees in states with no income tax, as
they cannot apply for a credit or refund.
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Smaller businesses that depend on a national salesforce
but only have a single HR generalist can face the difficult
situation of issuing, in some situations, 20 or 30 W-2s for
each employee whose job requires frequent travel to other
states. This taxing obligation and heavy record-keeping
requirement can result in errors or noncompliance.
The legislation will greatly simplify state income
tax filings by creating a uniform system that
only subjects traveling workers to a state’s
income tax if they are present and performing
employment duties for more than 30 days
during the calendar year.
Congressional Legislation
The Mobile Workforce State Income Tax Simplification
Act was first introduced during the 112 th Congress
as H.R. 1864. It passed the full U.S. House of
Representatives on May 15, 2012, but was never
passed by the Senate. The bill was then reintroduced
in 2013 as H.R. 1129/S. 1645.
that the correct amount of tax is withheld and paid to
the states without the undue paperwork and tracking
burden that the current system places on employees and
employers. There are exceptions written into the statute
for professional athletes and public figures who get paid
on a per-event basis.
In the 114th Congress, this session’s bill (H.R. 2315)
passed in the U.S. House Judiciary Committee by a vote
of 23-4 on June 17, 2015. The legislation will now move to
a vote in the full House.
The House bill currently has 123 co-sponsors, and the
companion Senate bill (S. 386) has 10 co-sponsors.
The legislation will greatly simplify state income tax
filings by creating a uniform system that only subjects
traveling workers to a state’s income tax if they are
present and performing employment duties for more
than 30 days during the calendar year. This would ensure
The Mobile Workforce Coalition is working with U.S.
House leadership to secure a vote in the full House later
this session.
For more updates on that status of this legislation, visit www.worldatwork.com/publicpolicy
and click the “Legislative Tracker” icon.
For more information about this legislation, please contact:
WorldatWork Washington, D.C. Office | 1100 13th Street, N.W., Suite 800 | Washington, D.C. 20005-4281 | 202-315-5500 | www.worldatwork.org | @worldatwork_dc
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