Senators John Thune (R., SD) and Catherine Cortez Masto (D., NV) introduced the Mobile Workforce State Income Tax Simplification Act of 2025 (the Act), a legislative proposal aimed at regulating state income tax obligations for employees who work in multiple states. The Act seeks to limit the authority of states to impose income taxes on wages earned by employees performing duties across state lines. Under the Act, employees would only be subject to state income tax in their state of residence and in any state where they work for more than 30 days within a calendar year.

The Act outlines specific rules for determining tax obligations, including the reliance on employee records for time spent working in different states, unless an employer maintains a precise time and attendance system. If passed, the Act would take effect on January 1 of the second calendar year following its enactment and would not apply to tax obligations accruing before its effective date. Note that similar proposals have been submitted during numerous legislative sessions in the past without sufficient agreement to pass.

Fuente: KPMG