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Dec. 12 — The 2017 political landscape may set the stage for Congress to take long-awaited action on several bills impacting taxes at the state and local level.
A number of bills, or earlier iterations, have been long-pending before federal lawmakers. Some include:
“It’s a totally new world,” Arthur Rosen, a partner with McDermott Will & Emery LLP, said during a Dec. 9 panel at the New York University Institute on State and Local Taxation. “Everything has changed. Everything you knew before about how politics works, what’s going to happen to Washington, is not necessarily valid anymore.”
Rosen said many congressional members and staff prefer to handle all or some of the bills together, so that a combination of bills “is not unlikely” in 2017.
The House passed the Mobile Workforce bill (H.R. 2315) by voice vote Sept. 21, but the Senate didn’t take action on the bill this session. A companion piece to the House legislation, S. 386, has been in the Senate Finance Committee.
Under the bill, states can’t assess income tax liability on nonresidents conducting business in the state for 30 or fewer days each year. Likewise, states would be prohibited from requiring employers to withhold the same. The bill carves out the earnings of professional athletes, professional entertainers and certain public figures compensated on a per-event basis.
“As a stand-alone bill, virtually everybody supports the concepts behind Mobile Workforce,” Rosen said. However, he explained that politics have largely obstructed the bill from becoming law—including “wheeling and dealing” that accompanies lawmaking and resistance from lawmakers. New York, in particular, has voiced opposition over the bill’s impact on state revenue.
While businesses wait for Congress to take action, they aren’t without a defense in certain circumstances. Rosen explained that protections are available under the federal due process and commerce clauses—and companies can seek guidance or assurances from state officials.
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