Mr. Speaker, I rise in support of a common sense bill, H.R. 1393 which would set a national standard of 30 days for states to subject non-residents to income tax requirements within that state. Under current law, many of the 41 states with a broad based personal income tax rate subject out of state residents to income tax in that state on the first day they ``work'' in the state.
This patchwork of state laws have created a confusing and unworkable nationwide system where individuals who travel to another state for a conference or meeting can find themselves subject to income tax requirements in a state where they only spent a few days. In fact, these overburdensome requirements can create a scenario in which a company of 7,000 employees who travel for domestic business may have to file 10,500 W-2's over the course of a given year.
This burden can be even worse for a small business.
One small business, which operates several customer service centers throughout the United States and has 600 employees working in 46 states, faces a significant burden trying to comply. Most of these 600 employees work out of one of the customer service centers, but 12 employees travel out of state to do a job occasionally.
The manager of this company has to spend 3 plus hours every week figuring out the tax reporting requirements for these employees, even though most of them only pay $30 to $100 a year into these different taxing authorities. Is this really a good use of the time of a small business?
Wouldn't we rather have these individuals working to create jobs and grow our economy then wasting time complying with the burdensome reporting requirements for 42 different taxing authorities? H.R. 1393 is a common sense solution to this problem.
30 days is a fair baseline standard that can be applied nationwide. It allows U.S. workers to travel and work around the country for a reasonable amount of time without subjecting them to reporting requirements for taxation in all of the jurisdictions in which they travel.
If they stay longer than 30 days in any particular state then the state is free to tax them according to their own state laws. With this new standard, American business will know what the rules of the road are across the country and they can plan their business accordingly.
I thank the Chairman for moving this important bill through the committee, and urge your support.