WASHINGTON - Today, Congresswoman Jahana Hayes (CT-05) co-leads with Representatives Jim Himes (CT-04), Chris Pappas (NH-01), and Annie Kuster (NH-02) to introduce the Multi-State Worker Tax Fairness Act. This bill will prevent the over-taxation of individuals who telework in one state for companies located in another.
The number of Americans telecommuting and working from home at least part-time has increased in recent years with technological advancements. The coronavirus pandemic served to supercharge this trend as millions of Americans switched to telework last year. Unfortunately, a patchwork of conflicting state tax rules burdens workers and discourages telecommuting.
The bill introduction comes the same week that the Supreme Court of the United States rejected a lawsuit by New Hampshire opposing Massachusetts collection of income tax from nearly 80,000 New Hampshire residents who are employed by Massachusetts companies, but have been working remotely in New Hampshire.
“The residents of Connecticut should not be double taxed based on where they live and where they work. In a time of growing telework, it is important this discrepancy be resolved. Many of my constituents never cross state lines during their workday, and should be taxed accordingly,” said Hayes.
“If you wake up every morning in Connecticut, and walk downstairs to your home office in Connecticut, it only makes sense that you should be paying taxes to Connecticut, not to New York or whatever state your company’s headquarters happens to be in,” said Himes. “It’s the fairest, simplest way to avoid over-taxation and ensure tax revenue goes to the logical jurisdiction. If the Supreme Court won’t act to make this right, the answer is clearly in this legislation.”
“Following the Supreme Court’s decision on Monday, it’s clear the most effective path forward to protect workers from unfair, out-of-state taxes is to pass the Multi-State Workers Tax Fairness Act,” said Pappas. “The ability of Massachusetts or any other state to tax you should stop at the state line, and that’s what this legislation will ensure. For the nearly one in five Granite Staters employed by companies out of state, every dollar they can keep in their pockets makes a difference, especially as we recover from the pandemic. I will continue to fight for this legislation so that we can get tax relief to our workers as quickly as possible.”
“Hardworking families in New Hampshire deserve peace of mind knowing they are not being unfairly taxed just because their employer’s headquarters is located in a different state,” said Kuster. “I’m proud to help introduce the Multi-State Worker Tax Fairness Act to protect Granite State workers and ensure no state has the authority to infringe upon the economic freedom and liberty of our New Hampshire citizens.”
The Multi-State Worker Tax Fairness Act establishes a uniform standard based on physical presence in a state. In doing so, the bill prohibits a state from taxing a nonresident’s income earned when the individual was not physically in that state.