H.R. 10142

I
  119TH CONGRESS
  2D SESSION
  H. R. 10142
  To amend title 4 of the United States Code to limit the extent to which
  States may tax the compensation earned by nonresident telecommuters
  and other multi-State workers.
  IN THE HOUSE OF REPRESENTATIVES
  AUGUST 24, 2026
  Mr. HIMES (for himself, Mr. PAPPAS, and Mr. GOTTHEIMER) introduced the
  following bill; which was referred to the Committee on the Judiciary
  A BILL
  To amend title 4 of the United States Code to limit the
  extent to which States may tax the compensation earned
  by nonresident telecommuters and other multi-State
  workers.
1Be it enacted by the Senate and House of Representa-
  2 tives of the United States of America in Congress assembled,
3   SECTION 1. SHORT TITLE.
4This Act may be cited as the ‘‘Multi-State Worker
  5 Tax Fairness Act of 2026’’.
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1   SEC. 2. LIMITATION ON STATE TAXATION OF COMPENSA-
2TION EARNED BY NONRESIDENT TELECOM-
3MUTERS AND OTHER MULTI-STATE WORK-
4ERS.
5(a) IN GENERAL.—Chapter 4 of title 4, United
  6 States Code, is amended by adding at the end the fol-
  7 lowing:
  8 ‘‘§ 127. Limitation on State taxation of compensation
9earned  by        nonresident  telecommuters
10and other multi-State workers
11‘‘(a) IN GENERAL.—In applying its income tax laws
  12 to the compensation of a nonresident individual, a State
  13 may deem such nonresident individual to be present in or
  14 working in such State for any period of time only if such
  15 nonresident individual is physically present in such State
  16 for such period and such State may not impose non-
  17 resident income taxes on such compensation with respect
  18 to any period of time when such nonresident individual
  19 is physically present in another State.
20‘‘(b) DETERMINATION OF PHYSICAL PRESENCE.—
  21 For purposes of determining physical presence, no State
  22 may deem a nonresident individual to be present in or
  23 working in such State on the grounds that—
24‘‘(1) such nonresident individual is present at
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25or working at home for convenience, or
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1‘‘(2) such nonresident individual’s work at
2home or office at home fails any convenience of the
3employer test or any similar test.
4‘‘(c) DETERMINATION OF PERIODS OF TIME WITH
  5 RESPECT TO WHICH COMPENSATION IS PAID.—For pur-
  6 poses of determining the periods of time with respect to
  7 which compensation is paid, no State may deem a period
  8 of time during which a nonresident individual is physically
  9 present in another State and performing certain tasks in
  10 such other State to be—
11‘‘(1) time that is not normal work time unless
12such individual’s employer deems such period to be
13time that is not normal work time,
14‘‘(2) nonworking time unless such individual’s
15employer deems such period to be nonworking time,
16or
17‘‘(3) time with respect to which no compensa-
18tion is paid unless such individual’s employer deems
19such period to be time with respect to which no com-
20pensation is paid.
21‘‘(d) DEFINITIONS.—As used in this section—
22‘‘(1) STATE.—The term ‘State’ means each of
23the several States (or any subdivision thereof), the
24District of Columbia, and any territory or possession
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25of the United States.
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1‘‘(2) INCOME TAX.—The term ‘income tax’ has
2the meaning given such term by section 110(c).
3‘‘(3) INCOME TAX LAWS.—The term ‘income
4tax laws’ includes any statutes, regulations, adminis-
5trative practices, administrative interpretations, and
6judicial decisions.
7‘‘(4) NONRESIDENT  INDIVIDUAL.—The  term
8‘nonresident individual’ means an individual who is
9not a resident of the State applying its income tax
10laws to such individual.
11‘‘(5) EMPLOYEE.—The term ‘employee’ means
12an employee as defined by the State in which the
13nonresident individual is physically present and per-
14forming personal services for compensation.
15‘‘(6) EMPLOYER.—The term ‘employer’ means
16the person having control of the payment of an indi-
17vidual’s compensation.
18‘‘(7) COMPENSATION.—The term ‘compensa-
19tion’ means the salary, wages, or other remuneration
20earned by an individual for personal services per-
21formed as an employee or as an independent con-
22tractor.
23‘‘(e) NO INFERENCE.—Nothing in this section shall
  24 be construed as bearing on—
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25‘‘(1) any tax laws other than income tax laws,
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1‘‘(2) the taxation of corporations, partnerships,
2trusts, estates, limited liability companies, or other
3entities, organizations, or persons other than non-
4resident individuals in their capacities as employees
5or independent contractors,
6‘‘(3) the taxation of individuals in their capac-
7ities as shareholders, partners, trust and estate
8beneficiaries, members or managers of limited liabil-
9ity companies, or in any similar capacities, and
10‘‘(4) the income taxation of dividends, interest,
11annuities, rents, royalties, or other forms of un-
12earned income.’’.
13(b) CLERICAL AMENDMENT.—The table of sections
  14 of such chapter 4 is amended by adding at the end the
  15 following new item:
  ‘‘127. Limitation on State taxation of compensation earned by nonresident tele-
  commuters and other multi-State workers.’’.
16(c) EFFECTIVE DATE.—The amendments made by
  17 this section shall take effect on the date of the enactment
  18 of this Act.
  Æ
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