Sponsor
Craig A. Goldman
Representative · R-TX
Representative · R-TX
The bill simplifies withholding and payroll rules for many remote workers and eases employer compliance by exempting short‑duration nonresident work and providing clearer rules and a delayed start, but it shifts revenue risk onto States and creates potential privacy, fairness, and interstate‑consistency problems.
Multistate employees and remote workers: wages for work performed in a nonresident State for 30 days or fewer will generally not be subject to that State's income tax withholding, simplifying tax obligations for many remote and hybrid workers.
Employers and payroll departments: reduced cross‑state withholding/reporting and protection from withholding penalties when relying in good faith on an employee's annual time estimate will lower payroll administrative burden and compliance risk, and clearer statutory definitions improve predictability.
Taxpayers and businesses: the law's delayed effective date (Jan 1 of the second calendar year after enactment) gives individuals, employers, and states time to prepare for the new rules.
State governments and residents: States may lose income tax revenue from nonresident workers who work under the 30‑day threshold, potentially reducing funds for state services or prompting tax increases elsewhere.
Employees, employers, and states: allowing States to narrow the meaning of 'wages or other remuneration' risks inconsistent rules across States, creating uncertainty for workers and payroll departments about what income is covered.
Employees and small employers: if employers implement daily tracking to determine where work occurred, workers could face privacy intrusions and both parties could face added administrative burden.
Based on analysis of 3 sections of legislative text.
Limits a state's ability to tax or require withholding on wages to the employee's resident state and nonresident states where the employee works more than 30 days per year.
Official title: To limit the authority of States to tax certain income of employees for employment duties performed in other States.
Introduced September 3, 2026 by Craig A. Goldman · Last progress September 3, 2026
Limits when a state may tax or require withholding on wages for employees who work in more than one state by allowing taxation only by the employee’s state of residence and any nonresident state where the employee performs duties for more than 30 days in a calendar year. Sets rules for when employers must withhold or report, provides safe harbors for relying on employees’ annual time estimates, and requires employers who use daily time-and-attendance systems to use those records for state allocation. Defines counting rules for a "day" of work, who counts as an employee and employer for these rules, and excludes certain categories (professional athletes, entertainers, some public figures, and qualified production employees). The rule takes effect January 1 of the second calendar year after enactment and does not apply to tax obligations that accrued before that date.