Remote and Mobile Worker Relief Act of 2020

II 116TH CONGRESS 2D SESSION S. 3995 To limit the authority of States or other taxing jurisdictions to tax certain income of employees for employment duties performed in other States or taxing jurisdictions, and for other purposes. IN THE SENATE OF THE UNITED STATES JUNE 18, 2020 Mr. THUNE (for himself and Mr. BROWN) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To limit the authority of States or other taxing jurisdictions to tax certain income of employees for employment duties performed in other States or taxing jurisdictions, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Remote and Mobile 4 Worker Relief Act of 2020’’. 5 VerDate Sep 11 2014 22:14 Jul 03, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S3995.IS S3995 pbinns on DSKJLVW7X2PROD with BILLS 2 •S 3995 IS SEC. 2. LIMITATIONS ON WITHHOLDING AND TAXATION OF 1 EMPLOYEE INCOME. 2 (a) IN GENERAL.—No part of the wages or other re- 3 muneration earned by an employee who performs employ- 4 ment duties in more than one taxing jurisdiction shall be 5 subject to income tax in any taxing jurisdiction other 6 than— 7 (1) the taxing jurisdiction of the employee’s res- 8 idence; and 9 (2) the taxing jurisdiction within which the em- 10 ployee is present and performing employment duties 11 for more than 30 days during the calendar year in 12 which the wages or other remuneration is earned. 13 (b) WAGES OR OTHER REMUNERATION.—Wages or 14 other remuneration earned in any calendar year shall not 15 be subject to income tax withholding and reporting re- 16 quirements with respect to any taxing jurisdiction unless 17 the employee is subject to income tax in such taxing juris- 18 diction under subsection (a). Income tax withholding and 19 reporting requirements under subsection (a)(2) shall apply 20 to wages or other remuneration earned as of the com- 21 mencement date of employment duties in the taxing juris- 22 diction during the calendar year. 23 (c) OPERATING RULES.—For purposes of deter- 24 mining penalties related to an employer’s income tax with- 25 VerDate Sep 11 2014 22:14 Jul 03, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S3995.IS S3995 pbinns on DSKJLVW7X2PROD with BILLS 3 •S 3995 IS holding and reporting requirements with respect to any 1 taxing jurisdiction— 2 (1) an employer may rely on an employee’s an- 3 nual determination of the time expected to be spent 4 by such employee in the taxing jurisdictions in which 5 the employee will perform duties absent— 6 (A) the employer’s actual knowledge of 7 fraud by the employee in making the determina- 8 tion; or 9 (B) collusion between the employer and the 10 employee to evade tax; 11 (2) except as provided in paragraph (3), if 12 records are maintained by an employer in the reg- 13 ular course of business that record the location of an 14 employee, such records shall not preclude an employ- 15 er’s ability to rely on an employee’s determination 16 under paragraph (1); and 17 (3) notwithstanding paragraph (2), if an em- 18 ployer, at its sole discretion, maintains a time and 19 attendance system that tracks where the employee 20 performs duties on a daily basis, data from the time 21 and attendance system shall be used instead of the 22 employee’s determination under paragraph (1). 23 (d) DEFINITIONS AND SPECIAL RULES.—For pur- 24 poses of this Act: 25 VerDate Sep 11 2014 22:14 Jul 03, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S3995.IS S3995 pbinns on DSKJLVW7X2PROD with BILLS 4 •S 3995 IS (1) DAY.— 1 (A) Except as provided in subparagraph 2 (B), an employee is considered present and per- 3 forming employment duties within a taxing ju- 4 risdiction for a day if the employee performs 5 more of the employee’s employment duties with- 6 in such taxing jurisdiction than in any other 7 taxing jurisdiction during a day. 8 (B) If an employee performs employment 9 duties in a resident taxing jurisdiction and in 10 only one nonresident taxing jurisdiction during 11 one day, such employee shall be considered to 12 have performed more of the employee’s employ- 13 ment duties in the nonresident taxing jurisdic- 14 tion than in the resident taxing jurisdiction for 15 such day. 16 (C) For purposes of this paragraph, the 17 portion of the day during which the employee is 18 in transit shall not be considered in determining 19 the location of an employee’s performance of 20 employment duties. 21 (2) EMPLOYEE.—The term ‘‘employee’’ has the 22 same meaning given to it by the taxing jurisdiction 23 in which the employment duties are performed, ex- 24 cept that the term ‘‘employee’’ shall not include a 25 VerDate Sep 11 2014 22:14 Jul 03, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S3995.IS S3995 pbinns on DSKJLVW7X2PROD with BILLS 5 •S 3995 IS professional athlete, professional entertainer, quali- 1 fied production employee, or certain public figures. 2 (3) PROFESSIONAL ATHLETE.—The term ‘‘pro- 3 fessional athlete’’ means a person who performs 4 services in a professional athletic event, provided 5 that the wages or other remuneration are paid to 6 such person for performing services in his or her ca- 7 pacity as a professional athlete. 8 (4) PROFESSIONAL ENTERTAINER.—The term 9 ‘‘professional entertainer’’ means a person of promi- 10 nence who performs services in the professional per- 11 forming arts for wages or other remuneration on a 12 per-event basis, provided that the wages or other re- 13 muneration are paid to such person for performing 14 services in his or her capacity as a professional en- 15 tertainer. 16 (5) QUALIFIED PRODUCTION EMPLOYEE.—The 17 term ‘‘qualified production employee’’ means a per- 18 son who performs production services of any nature 19 directly in connection with a taxing jurisdiction 20 qualified, certified or approved film, television or 21 other commercial video production for wages or 22 other remuneration, provided that the wages or 23 other remuneration paid to such person are qualified 24 production costs or expenditures under such taxing 25 VerDate Sep 11 2014 22:14 Jul 03, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S3995.IS S3995 pbinns on DSKJLVW7X2PROD with BILLS 6 •S 3995 IS jurisdiction’s qualified, certified or approved film in- 1 centive program, and that such wages or other re- 2 muneration must be subject to withholding under 3 such film incentive program as a condition to treat- 4 ing such wages or other remuneration as a qualified 5 production cost or expenditure. 6 (6) CERTAIN PUBLIC FIGURES.—The term 7 ‘‘certain public figures’’ means persons of promi- 8 nence who perform services for wages or other remu- 9 neration on a per-event basis, provided that the 10 wages or other remuneration are paid to such person 11 for services provided at a discrete event, in the na- 12 ture of a speech, public appearance, or similar event. 13 (7) EMPLOYER.—The term ‘‘employer’’ has the 14 meaning given such term in section 3401(d) of the 15 Internal Revenue Code of 1986 (26 U.S.C. 3401(d)), 16 unless such term is defined by the taxing jurisdiction 17 in which the employee’s employment duties are per- 18 formed, in which case the taxing jurisdiction’s defi- 19 nition shall prevail. 20 (8) TAXING JURISDICTION.—The term ‘‘taxing 21 jurisdiction’’ means any of the several States, the 22 District of Columbia, or any territory or possession 23 of the United States, any municipality, city, county, 24 township, parish, transportation district, or assess- 25 VerDate Sep 11 2014 22:14 Jul 03, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S3995.IS S3995 pbinns on DSKJLVW7X2PROD with BILLS 7 •S 3995 IS ment jurisdiction, or any other political subdivision 1 within the territorial limits of the United States with 2 the authority to impose a tax, charge, or fee. 3 (9) TIME AND ATTENDANCE SYSTEM.—The 4 term ‘‘time and attendance system’’ means a system 5 in which— 6 (A) the employee is required on a contem- 7 poraneous basis to record his work location for 8 every day worked outside of the taxing jurisdic- 9 tion in which the employee’s employment duties 10 are primarily performed; and 11 (B) the system is designed to allow the em- 12 ployer to allocate the employee’s wages for in- 13 come tax purposes among all taxing jurisdic- 14 tions in which the employee performs employ- 15 ment duties for such employer. 16 (10) WAGES OR OTHER REMUNERATION.—The 17 term ‘‘wages or other remuneration’’ may be limited 18 by the taxing jurisdiction in which the employment 19 duties are performed. 20 (e) ADJUSTMENT DURING CORONAVIRUS PAN- 21 DEMIC.—With respect to calendar year 2020, in the case 22 of any employee who performs employment duties in any 23 taxing jurisdiction other than the taxing jurisdiction of the 24 employee’s residence during such year as a result of the 25 VerDate Sep 11 2014 22:14 Jul 03, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S3995.IS S3995 pbinns on DSKJLVW7X2PROD with BILLS 8 •S 3995 IS COVID–19 public health emergency, subsection (a)(2) 1 shall be applied by substituting ‘‘90 days’’ for ‘‘30 days’’. 2 SEC. 3. STATE AND LOCAL TAX CERTAINTY. 3 (a) STATUS OF EMPLOYEES DURING COVERED PE- 4 RIOD.—Notwithstanding section 2(a)(2) or any provision 5 of law of a taxing jurisdiction, with respect to any em- 6 ployee who is working remotely within such taxing juris- 7 diction during the covered period— 8 (1) except as provided under paragraph (2), 9 any wages earned by such employee during such pe- 10 riod shall be deemed to have been earned at the pri- 11 mary work location of such employee; and 12 (2) if an employer, at its sole discretion, main- 13 tains a system that tracks where such employee per- 14 forms duties on a daily basis, wages earned by such 15 employee may, at the election of such employer, be 16 treated as earned at the location in which such du- 17 ties were remotely performed. 18 (b) STATUS OF BUSINESSES DURING COVERED PE- 19 RIOD.—Notwithstanding any provision of law of a taxing 20 jurisdiction— 21 (1) in the case of an out-of-state business which 22 has any employees working remotely within such ju- 23 risdiction during the covered period, the duties per- 24 formed by such employees within such jurisdiction 25 VerDate Sep 11 2014 22:14 Jul 03, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S3995.IS S3995 pbinns on DSKJLVW7X2PROD with BILLS 9 •S 3995 IS during such period shall not be sufficient to create 1 any nexus or establish any minimum contacts or 2 level of presence that would otherwise subject such 3 business to any registration, taxation, or other re- 4 lated requirements for businesses operating within 5 such jurisdiction; and 6 (2) except as provided under subsection (a)(2), 7 with respect to any tax imposed by such taxing ju- 8 risdiction which is determined, in whole or in part, 9 based on net or gross receipts or income, for pur- 10 poses of apportioning or sourcing such receipts or 11 income, any duties performed by an employee of an 12 out-of-state business while working remotely during 13 the covered period— 14 (A) shall be disregarded with respect to 15 any filing requirements for such tax; and 16 (B) shall be apportioned and sourced to 17 the tax jurisdiction which includes the primary 18 work location of such employee. 19 (c) DEFINITIONS.—For purposes of this section— 20 (1) COVERED PERIOD.—The term ‘‘covered pe- 21 riod’’ means, with respect to any employee working 22 remotely, the period— 23 (A) beginning on the date on which such 24 employee began working remotely; and 25 VerDate Sep 11 2014 22:14 Jul 03, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S3995.IS S3995 pbinns on DSKJLVW7X2PROD with BILLS 10 •S 3995 IS (B) ending on the earlier of— 1 (i) the date on which the employer al- 2 lows, at the same time— 3 (I) such employee to return to 4 their primary work location; and 5 (II) not less than 90 percent of 6 their permanent workforce to return 7 to such work location; or 8 (ii) December 31, 2020. 9 (2) EMPLOYEE.—The term ‘‘employee’’ has the 10 same meaning given to it by the taxing jurisdiction 11 in which the employment duties are performed. 12 (3) EMPLOYER.—The term ‘‘employer’’ has the 13 same meaning given such term under section 14 2(d)(7). 15 (4) OUT-OF-STATE BUSINESS.—The term ‘‘out- 16 of-state business’’ means, with respect to any tax ju- 17 risdiction, any business entity which, excepting any 18 employees of such business who are working re- 19 motely within such jurisdiction during the covered 20 period, would not otherwise be subject to any tax fil- 21 ing requirements under the existing law of such tax- 22 ing jurisdiction. 23 (5) PRIMARY WORK LOCATION.—The term ‘‘pri- 24 mary work location’’ means, with respect to an em- 25 VerDate Sep 11 2014 22:14 Jul 03, 2020 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S3995.IS S3995 pbinns on DSKJLVW7X2PROD with BILLS 11 •S 3995 IS ployee, the address of the employer where the em- 1 ployee is regularly assigned to work when such em- 2 ployee is not working remotely during the covered 3 period. 4 (6) TAXING JURISDICTION.—The term ‘‘taxing 5 jurisdiction’’ has the same meaning given such term 6 under section 2(d)(8). 7 (7) WAGES.—The term ‘‘wages’’ means all 8 wages and other remuneration paid to an employee 9 that are subject to tax or withholding requirements 10 under the law of the taxing jurisdiction in which the 11 employment duties are deemed to be performed 12 under subsection (a) during the covered period. 13 (8) WORKING REMOTELY.—The term ‘‘working 14 remotely’’ means the performance of duties by an 15 employee at a location other than the primary work 16 location of such employee at the direction of their 17 employer due to conditions resulting from the public 18 health emergency relating to the virus SARS–CoV– 19 2 or coronavirus disease 2019 (referred to in this 20 paragraph as ‘‘COVID–19’’), including— 21 (A) to comply with any government order 22 relating to COVID–19; 23 (B) to prevent the spread of COVID–19; 24 and 25 VerDate Sep 11 2014 22:14 Jul 03, 2020 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S3995.IS S3995 pbinns on DSKJLVW7X2PROD with BILLS 12 •S 3995 IS (C) due to the employee or a member of 1 the employee’s family contracting COVID–19. 2 (d) PRESERVATION OF AUTHORITY OF TAXING JU- 3 RISDICTIONS.—This section shall not be construed as 4 modifying, impairing, superseding, or authorizing the 5 modification, impairment, or supersession of the law of 6 any taxing jurisdiction perta [Text truncated for display. 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