Chamber-backed mobile workforce bill passes U.S. House

The U.S. House passed an important measure backed by the Kentucky Chamber that will simplify the state taxation of employees who travel to work in non-resident states. H.R. 1864, the Mobile Workforce State Income Tax Simplification Act, establishes a 30-day national standard for non-resident withholding of state income taxes.

Currently, states have varying and inconsistent standards for employees to file personal income taxes when traveling to a non-resident state for temporary work periods, and for employers to withhold income taxes for those workers. Kentucky and other states require non-resident tax withholding after just one day of travel, while other states have different standards. In all, 41 states tax non-residents for work performed in their state, subjecting employers and employees to onerous administrative burdens. To ease compliance, H.R. 1864 creates a uniform standard – only non-residents who work more than 30 days in a single state are subject to that state’s income tax.

The bill now moves to the U.S. Senate.