II
109th CONGRESS
1st Session
S. 1097
IN THE SENATE OF THE UNITED STATES
May 23, 2005
Mr. Dodd (for himself and Mr. Lieberman) introduced the following bill; which was read twice and referred to the Committee on Finance
A BILL
To amend title 4 of the United States Code to prohibit the double taxation of telecommuters and others who work at home.
Short title
This Act may be cited as the
Telecommuter Tax Fairness Act of
2005
.
Prohibition on double taxation of telecommuters
In general
Chapter 4 of title 4, United States Code, is amended by adding at the end the following new section:
Prohibition on double taxation of telecommuters and others who work at home
Physical presence required
In general
In applying its income tax laws to the salary of a nonresident individual, a State may only deem such nonresident individual to be present in or working in such State for any period of time if such nonresident individual is physically present in such State for such period and such State may not impose nonresident income taxes on such salary with respect to any period of time when such nonresident individual is physically present in another State.
Determination of physical presence
For purposes of determining physical presence, no State may deem a nonresident individual to be present in or working in such State on the grounds that such nonresident individual is present at or working at home for the nonresident individual’s convenience.
Definitions
As used in this section—
State
The term State includes any political subdivision of a State, the District of Columbia, and the possessions of the United States.
Income tax
The term income tax has the meaning given such term by section 110(c).
Income tax laws
The term income tax laws includes any statutes, regulations, administrative practices, administrative interpretations, and judicial decisions.
Nonresident individual
The term nonresident individual means an individual who is not a resident of the State applying its income tax laws to such individual.
Salary
The term salary means the compensation, wages, or other remuneration earned by an individual for personal services performed as an employee or as an independent contractor.
No inference
Nothing in this section shall be construed as bearing on—
any tax laws other than income tax laws,
the taxation of corporations, partnerships, trusts, estates, limited liability companies, or other entities, organizations, or persons other than nonresident individuals in their capacities as employees or independent contractors,
the taxation of individuals in their capacities as shareholders, partners, trust and estate beneficiaries, members or managers of limited liability companies, or in any similar capacities, and
the income taxation of dividends, interest, annuities, rents, royalties, or other forms of unearned income.
.
Clerical amendment
The table of sections of such chapter 4 is amended by adding at the end the following new item:
127. Prohibition on double taxation of telecommuters and others who work at home.
.
Effective date
The amendments made by this section shall take effect on the date of enactment of this Act.