Western South Dakota News

U.S. Senators John Thune and Catherine Cortez Masto have introduced the Mobile Workforce State Income Tax Simplification Act. This bipartisan effort aims to streamline and standardize state income tax collection for employees working temporarily outside their home state. Currently, tax reporting requirements differ significantly across states based on length of stay and income earned.

The proposed bill intends to establish a uniform 30-day threshold for state income tax filing. This approach seeks to ensure fair taxation in the jurisdiction where the work is performed while reducing the administrative burden for both employees and employers.

Thune highlighted the unfairness of the current system: "It is complicated and unfair for an individual who lives in a state like South Dakota, with no state income tax, to have to file income taxes in multiple states for simply temporarily working in those states – in some cases, for as little as 24 hours – and not be able to recover any income tax payments he or she has to make."

Cortez Masto also emphasized the need for reform, stating, "Mobile workers who temporarily work outside of their home state should not find a surprise tax bill come April."

Support for the legislation comes from various industry leaders. Tommy Pollema, executive director of the South Dakota CPA Society, said the act would offer "much-needed clarity and consistency in state income tax obligations for remote and mobile workers." The Mobile Workforce Coalition, representing over 300 industries and organizations, also commended the bill, with executive director Maureen Riehl highlighting the necessity of a national standard.

Watson M. McLeish from the U.S. Chamber of Commerce endorsed the legislation, describing it as a "long-sought, common-sense standard" that would ease tax compliance burdens. The American Institute of Certified Public Accountants supports the measure, with Melanie Lauridsen praising it for balancing states' taxation rights with business efficiency needs.

Pat Reynolds from the Council on State Taxation noted, "The legislation, which would simplify reporting requirements for traveling nonresident employees and their employers, is long overdue, and will bring much needed clarity to an area that fosters widespread confusion and noncompliance."

The bill has enjoyed bipartisan support in Congress and proponents hope it will become law, bringing clarity to mobile workforce tax obligations.