Sponsors
The bill prevents retroactive state wealth/asset taxes on nonresidents and improves predictability for people who move between states, but it limits states' revenue-raising options and creates administrative burdens for state tax systems.
Nonresident taxpayers (especially those with significant assets) are protected from retroactive state wealth/asset taxes tied to periods when they did not live in the state, avoiding unexpected large tax bills.
Individuals living outside a state gain greater predictability and perceived fairness because liability cannot be applied retroactively based on past asset values, reducing legal and financial uncertainty.
States' ability to raise revenue from wealth- or asset-based taxes is constrained, which could shift tax burdens onto in-state residents or require higher taxes/fee increases elsewhere.
States may face added administrative complexity and costs to determine residence as of the enactment date and to separate pre-enactment vs. post-enactment valuation periods for assets.
Based on analysis of 6 sections of legislative text.
Stops states from imposing retroactive asset-value taxes on people who were not residents on the state-law enactment date for valuation periods before that enactment.
Prohibits states from imposing retroactive taxes based on the value of assets on individuals who were not residents of the state on the date the state law was enacted, where the tax would apply to valuation periods that end before that enactment. The federal restriction is effective January 1, 2026, and applies to asset-value taxes attributed to pre-enactment valuation periods for nonresidents. The measure limits state authority to collect retroactive asset-based taxes from nonresidents, reducing legal and financial risk for people who hold assets in states where they do not live while preserving states’ ability to impose such taxes prospectively or on residents.
Introduced February 20, 2026 by Kevin Kiley · Last progress February 20, 2026