CONYERS Statement on H.R. 1393, the "Mobile Workforce State Income Tax Simplification Act of 2017"

Dean of the U.S. House
of Representatives
John Conyers, Jr.

H.R. 1393, the “Mobile Workforce State Income Tax Simplification Act,” helps to clarify various record-keeping and state income tax liability issues.  Nevertheless, the bill requires further revision before I can support it.

On the positive side, H.R. 1393 attempts to solve a legitimate problem presented by employee tax liability and employer withholding requirements.

Many employers are subject to multiple tax compliance record-keeping requirements for their mobile workers. 

These workers, in turn, are often subject to potentially conflicting and thereby confusing multiple state income tax requirements.

The paperwork that both employers and workers must file can be complicated and time-consuming.

And the filings, especially for sometimes miniscule amounts of income, can even be burdensome to state revenue departments.

Unfortunately, H.R. 1393, if enacted, could result in some states losing millions of dollars in revenue.

In fact, New York could lose upwards of $100 million in revenue.

Fortunately, this legislation only needs some simple changes to eliminate these negative impacts. 

For example, the bill currently has a 30-day threshold before an employee would be required to pay income taxes in a state. A much lower threshold would be fairer to the states and still provide certainty to employers and employees.

In addition, the bill’s timekeeping requirements could be tightened to help prevent tax avoidance.

A solution appears to potentially close and, accordingly, I look forward to working with my colleagues and the various stakeholders to finally achieve this goal.

I would be remiss if I did not take this opportunity to urge my colleagues to pass a fair and uniform framework to allow states to collect taxes owed on remote sales, rather than proceed with this flawed bill.

By staying silent since the Supreme Court’s 1992 Quill decision, Congress has failed to ensure that states have the authority to collect the sales and use tax on internet purchases.

While this decision may have made sense in 1992, it does not stand up well over time. In 2015 alone $26 billion dollars owed to states went uncollected.

Lost tax revenues mean that state and local governments will have fewer resources to provide their residents essential services, such as education and health care.

This Congress, House Republicans are advancing both TrumpCare and a disastrous budget that would both cut untold amounts of federal assistance to the states.

In light of these looming funding cuts, the loss of billions of dollars in state revenue is more pressing than ever.  This committee should move swiftly to close the internet tax loophole by passing legislation this Congress.

I thank the Chairman and yield back the balance of my time.

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