Sponsors
The bill protects nonresident taxpayers from retroactive state asset taxes and clarifies tax-timing, but at the cost of limiting states' retroactive revenue claims and enabling timing-based tax avoidance that may weaken perceived fairness.
Nonresident individuals (taxpayers who move between states or own out-of-state assets) are protected from retroactive asset-based state taxes for periods before a state law's enactment, preventing unexpected tax bills.
People who move between states or hold out-of-state assets (taxpayers) face reduced legal uncertainty because the bill clarifies when state asset tax liability can begin.
State governments could lose the ability to collect revenue from nonresidents for past periods, reducing potential state tax receipts.
Taxpayers who can time residence changes may be able to avoid future state asset taxes, creating planning opportunities that reduce the perceived fairness of the tax system.
Based on analysis of 6 sections of legislative text.
Prevents States from retroactively applying asset-value-based taxes to periods before a taxing law's enactment for individuals who were nonresidents on the enactment date.
Introduced February 20, 2026 by Kevin Kiley · Last progress February 20, 2026
Prohibits any State from imposing an asset-based tax retroactively for periods before the taxing law was enacted when the individual taxpayer did not reside in that State on the law’s enactment date. The restriction covers taxes “based on the value of the assets” and any tax attributable to asset value for periods prior to enactment. Takes effect January 1, 2026. The measure is narrowly focused on preventing retroactive application of asset-value taxes against nonresident individuals and does not create new spending programs.