On February 28, 2019, federal legislation — the ‘‘Mobile Workforce State Income Tax Simplification Act of 2019’’ or S. 604 — was introduced in the Senate by Senator John Thune (R-SD); he has been joined by a bipartisan group of cosponsors. If enacted, S. 604, would limit a state’s ability to require withholding and payment of personal income taxes unless an employee (1) is a resident of the state, or (2) has been present and performing employment duties in the state for more than 30 days during the calendar year. Similar legislation has been introduced in previous sessions of Congress, but failed to pass both the House and Senate.
On March 13, 2019, Senator Thune, joined by Senator Wyden (D-OR), introduced the Digital Goods and Services Tax Fairness Act of 2019 (S. 765), which, like the Mobile Workforce legislation, has also been introduced in several prior sessions of Congress. S. 765 is designed to provide certain limits on state and local taxation of digital goods and services and bring some uniformity to such taxation. Please stay tuned to TWIST for further updates on the progress of these and other bills affecting state and local taxation.