A bill relating to withholding by the United States of certain taxes imposed by States, and political subdivisions thereof, in the case of Federal employees.

Directs the Secretary of the Treasury to enter into agreements with States imposing income taxes to provide that the head of each agency of the United States shall comply with the requirements of a State's withholding statute in the case of employees of the agency who are subject to the tax and whose regular place of Federal employment is within the State or political subdivision with which the agreement is made. States that such agreement may not apply to pay for service as a member of the Armed Forces.