Mobile Workforce State Income Tax Simplification Act of 2025
Sponsored By: Senator Thune, John [R-SD]
Introduced
Summary
Limits state income tax to a worker's home state and states where they spend more than 30 days working. This bill would create a national rule for when states can tax wages and when employers must withhold for employees who perform work in more than one State.
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- Employees: Most multi-state workers would only face state income tax in their resident state and any nonresident state where they perform duties for more than 30 days in a calendar year.
- Employers: Employers could rely on an employee's annual estimate of where they will work to decide withholding, unless the employer knows of fraud or collusion. If an employer uses a daily time-and-attendance system that tracks work location, that system's data must be used instead.
- States: States could require withholding and reporting only when a worker meets the 30-day test or is a resident, and states can limit what counts as "wages or other remuneration" for their tax rules.
- Exemptions: The bill excludes certain categories from the employee definition, including professional athletes, professional entertainers, qualified production employees tied to state film incentives, and some public figures paid per event.
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Bill Overview
Analyzed Economic Effects
2 provisions identified: 1 benefits, 0 costs, 1 mixed.
Where states may tax your pay
If enacted, this bill would limit which States can tax your wages when you work in more than one State. Only your State of residence and any State where you are present and performing work for more than 30 days in the calendar year could tax your wages. A day counts for the State where you did more work that day. If you work in your home State and exactly one other State in a day, that day counts for the other State. Time spent traveling does not count. The bill would start on January 1 of the second calendar year after enactment and would not apply to taxes that accrued before that date. Some workers, like many pro athletes, pro entertainers, certain film production workers, and some public figures, are excluded from the Act's employee rules.
Employer withholding rules and protections
If enacted, the bill would limit when employers must withhold state income tax. Employers would only need to withhold for a State if the worker is taxable there under the 30-day rule. Employers may rely on a worker's yearly estimate of how many days they will work in each State unless the employer actually knows the worker committed fraud or colluded to evade tax. If an employer voluntarily keeps a daily time-and-attendance system that tracks work location, the employer must use that system's data instead of the worker's estimate. The bill also sets rules for penalties tied to these withholding and reporting duties.
Sponsors & CoSponsors
Sponsor
Thune, John [R-SD]
SD • R
Cosponsors
Sen. Cortez Masto, Catherine [D-NV]
NV • D
Sponsored 4/10/2025
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov