In 2019, a bill is advancing to the U.S. Senate Committee on Finance that could significantly change how construction employers who work in multiple states handle their payroll taxes.
The proposed S. 604, currently known as the Mobile Workforce State Income Tax Simplification Act of 2019, seeks to “limit the authority of States to tax certain income of employees for employment duties performed in other States.” If passed as currently written, the income of employees who perform work in multiple states will only be taxable by a state other than their residence if they perform employment duties there for more than 30 days during the calendar year. Such employees would be exempt from both withholding and reporting requirements in additional states.
As of April 2019, the bill makes no exceptions for construction employees working on out-of-state job sites.
This is not the first year that the Mobile Workforce State Income Tax Simplification Act has seen Capitol Hill. Most recently, the U.S. House of Representatives passed H.R. 1393 without amendment in 2017 — but not in time for the Senate to vote before that congressional session ended.
Read the full text and track the status of the proposed Senate bill.