Telecommuter Tax Fairness Act of 2011 - Prohibits a state from imposing an income tax on the compensation of a nonresident individual for any period in which such individual is not physically present in or working in such state or from deeming such nonresident individual to be present in or working in such state on the grounds that: (1) such individual is present at or working at home for convenience, or (2) such individual's work at home fails any convenience of the employer test or any similar test.
[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 1811 Introduced in Senate (IS)]
112th CONGRESS
1st Session
S. 1811
To amend title 4 of the United States Code to limit the extent to which
States may tax the compensation earned by nonresident telecommuters.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
November 7, 2011
Mr. Lieberman (for himself and Mr. Blumenthal) introduced the following
bill; which was read twice and referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend title 4 of the United States Code to limit the extent to which
States may tax the compensation earned by nonresident telecommuters.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Telecommuter Tax Fairness Act of
2011''.
SEC. 2. LIMITATION ON STATE TAXATION OF COMPENSATION EARNED BY
NONRESIDENT TELECOMMUTERS.
(a) In General.--Chapter 4 of title 4, United States Code, is
amended by adding at the end the following new section:
``Sec. 127. Limitation on State taxation of compensation earned by
nonresident telecommuters
``(a) In General.--In applying its income tax laws to the
compensation of a nonresident individual, a State may deem such
nonresident individual to be present in or working in such State for
any period of time only if such nonresident individual is physically
present in such State for such period and such State may not impose
nonresident income taxes on such compensation with respect to any
period of time when such nonresident individual is physically present
in another State.
``(b) Determination of Physical Presence.--For purposes of
determining physical presence, no State may deem a nonresident
individual to be present in or working in such State on the grounds
that--
``(1) such nonresident individual is present at or working
at home for convenience, or
``(2) such nonresident individual's work at home or office
at home fails any convenience of the employer test or any
similar test.
``(c) Determination of Periods of Time With Respect to Which
Compensation Is Paid.--For purposes of determining the periods of time
with respect to which compensation is paid, no State may deem a period
of time during which a nonresident individual is physically present in
another State and performing certain tasks in such other State to be--
``(1) time that is not normal work time unless such
individual's employer deems such period to be time that is not
normal work time,
``(2) nonworking time unless such individual's employer
deems such period to be nonworking time, or
``(3) time with respect to which no compensation is paid
unless such individual's employer deems such period to be time
with respect to which no compensation is paid.
``(d) Definitions.--As used in this section--
``(1) State.--The term `State' means each of the several
States (or any subdivision thereof), the District of Columbia,
and any territory or possession of the United States.
``(2) Income tax.--The term `income tax' has the meaning
given such term by section 110(c).
``(3) Income tax laws.--The term `income tax laws' includes
any statutes, regulations, administrative practices,
administrative interpretations, and judicial decisions.
``(4) Nonresident individual.--The term `nonresident
individual' means an individual who is not a resident of the
State applying its income tax laws to such individual.
``(5) Employee.--The term `employee' means an employee as
defined by the State in which the nonresident individual is
physically present and performing personal services for
compensation.
``(6) Employer.--The term `employer' means the person
having control of the payment of an individual's compensation.
``(7) Compensation.--The term `compensation' means the
salary, wages, or other remuneration earned by an individual
for personal services performed as an employee or as an
independent contractor.
``(e) No Inference.--Nothing in this section shall be construed as
bearing on--
``(1) any tax laws other than income tax laws,
``(2) the taxation of corporations, partnerships, trusts,
estates, limited liability companies, or other entities,
organizations, or persons other than nonresident individuals in
their capacities as employees or independent contractors,
``(3) the taxation of individuals in their capacities as
shareholders, partners, trust and estate beneficiaries, members
or managers of limited liability companies, or in any similar
capacities, and
``(4) the income taxation of dividends, interest,
annuities, rents, royalties, or other forms of unearned
income.''.
(b) Clerical Amendment.--The table of sections of such chapter 4 is
amended by adding at the end the following new item:
``127. Limitation on State taxation of compensation earned by
nonresident telecommuters.''.
(c) Effective Date.--The amendments made by this section shall take
effect on the date of the enactment of this Act.
<all>
Introduced in Senate
Read twice and referred to the Committee on Finance.
Llama 3.2 · runs locally in your browser
Ask anything about this bill. The AI reads the full text to answer.
Enter to send · Shift+Enter for new line