Last week, the U.S. House of Representatives passed the Mobile Workforce State Income Tax Simplification Act of 2017 (H.R. 1393). The bill, which has been supported by the American Institute of Certified Public Accountants (AICPA), would help alleviate the burden and confusion employers and employees experience when dealing with inconsistent state income tax laws when working in multiple states.
Currently, some states, including Pennsylvania, Maryland, Delaware, and Vermont, require nonresident employees to pay state income taxes even if the employee is working only one day in their state. Under the Companion Bill, S.540, employees would not be subject to another state’s income tax law unless they worked in that state for more than 30 days within a calendar year. However, the bill would not apply to professional athletes, professional entertainers, production employees, and public figures, who would still need to pay income taxes to the state where they are working.
AICPA President and CEO Barry Melancon commended the U.S. House for passing the H.R. 1393 saying the “enactment of H.R. 1393 would eliminate the need for much of the complex recordkeeping that employers face when their employees cross state lines to work. It also would relieve many workers of the burden of filing state income tax returns for states in which they worked only a few days during the year.”
The bill has been introduced and reintroduced since 2006, and although it has passed the U.S. House before, it has yet to advance in the Senate. AICPA and other H.R. 1393 bill supporters are hoping this time will be different, and the bill will push through the U.S. Senate.
Whether you have multiple businesses in different states or you just have one company, but conduct work in several states, complying with the intricate state laws and regulations is not only time-consuming but challenging. At Trout CPA our multistate tax professionals have the education, experience, and reputation to help your business strategize and navigate through the complexity of multistate taxation. Our knowledgeable professionals will develop a comprehensive understanding of your business activities and operations. We will then apply a customized multistate tax approach that will align with your current and future business goals.
For additional information on our State & Local Tax Services, please complete the form below.
