PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

H.R. 1393: “Mobile Workforce State Income Tax Simplification Act of 2017”

By at 28 March, 2017, 9:23 pm

The Honorable Michael D. Bishop

U.S. House of Representatives

Washington, DC 20515

 

The Honorable Hank Johnson

U.S. House of Representatives

Washington, DC 20515

 

Dear Representatives Bishop and Johnson:

The Small Business & Entrepreneurship Council (SBE Council) and our nationwide membership of small business owners and entrepreneurs support H.R. 1393, the “Mobile Workforce State Income Tax Simplification Act of 2017.”

In today’s dynamic, mobile economy, many in the entrepreneurial sector of our economy live in one state, but work in another, or spend multiple days working in assorted states. As a result, multi-state tax jurisdictions and payments turn out to be challenges for many small business owners, self-employed entrepreneurs, and employees.

In fact, when small business owners and employees travel, state tax laws often vary widely in terms of calculating income taxes owed. This, of course, increases tax complexity and confusion, raises costs, and creates uncertainty, with the costs naturally falling heaviest on individuals and small businesses.

H.R. 1393 prohibits one state from taxing work being performed in another state. Instead, income taxation is limited to the state in which the employee lives, and any state within which an employee is present and working for more than 30 days during a calendar year. In addition, it follows that the bill exempts employers from income tax withholding and reporting requirements for employees not subject to the tax in a state.

This establishes a much-needed uniform, clear and consistent physical presence standard for nonresident income taxation, withholding, and filing requirements. It eliminates confusion and complexity, reduces costs, and fosters certainty. This fair, common-sense measure would be good news for small businesses and their employees.

Thank you for your leadership on this important issue for entrepreneurs, small business owners and their employees. SBE Council looks forward to working with you to advance H.R. 1393 into law.

Sincerely,

Karen Kerrigan, President & CEO

 

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