U.S. Sen. John Thune (R-S.D.) today discussed his Remote and Mobile Worker Relief Act, a bipartisan provision included in the Health, Economic Assistance, Liability Protection, and Schools (HEALS) Act, the next coronavirus relief package that Senate Republicans introduced yesterday. Thune’s provision would ensure medical professionals from around the country who supported areas hard hit by the COVID-19 pandemic do not face unexpected or increased state income tax bills. The provision would also address potential problems remote workers are facing during the pandemic, including the possibility of having their state income taxes become out of balance because they worked from home in a different state than their ordinary place of employment during the pandemic.
Excerpt of Thune’s remarks below:
“Mr. President, yesterday I was privileged to be able to pay my respects to Representative John Lewis as he lies in state in the Capitol Rotunda – a fitting place for an American hero.
“His death is a loss, but his dauntless courage and deep conviction have carved out for him a permanent place in American history.
“When we tell stories of those who have made America greater, John Lewis’s name will always be among them.
“Mr. President, yesterday Senate Republicans introduced the next phase of our coronavirus relief effort – the Health, Economic Assistance, Liability Protection, and Schools Act, or HEALS Act.
“This bill has been carefully targeted to address the most pressing issues facing our nation right now – getting kids back to school, getting workers back to work, and ensuring that we have the health care resources necessary to defeat this virus.
“The HEALS Act will provide economic incentives to help businesses retain workers.
“It will give additional support to hard-hit small businesses.
“It will provide checks to American families to help them weather the economic challenges they’re facing.
“It will give schools more than $100 billion to help them safely reopen, so kids and college students aren’t missing out on the academic, social, and emotional benefits of in-person learning.
“It will direct funds to diagnosis, treatment, and vaccines.
“It will ensure that medical professionals, small businesses, and school districts doing their best to protect Americans don’t face frivolous lawsuits from predatory trial lawyers.
“It will provide incentives for manufacturing personal protective equipment in the United States, to help ensure that we never again face the kind of shortages we’ve seen with the coronavirus.
“Now it’s time for Democrats to come to the negotiating table so that we can arrive at a bipartisan bill and get this relief into the hands of Americans.
“I was disappointed to hear the Democrat leader’s partisan screeds yesterday and today on the Senate floor – although I did appreciate his ability to, with a straight face, simultaneously characterize Republican relief efforts as insufficient while touting a House bill that mentions the word “cannabis” more often than the word “job” and contains less money for schools than Republicans’ legislation.
“Mr. President, no one is going to get everything they want with this bill.
“And Democrats are not going to be able to implement their socialist wish list.
“But if we work together, we can get real relief into the hands of Americans.
“I hope Democrats will join us.
“Mr. President, during New York’s toughest moments during the pandemic, medical professionals from around the country came to hard-hit New York City to help.
“They formed an essential part of the city’s medical response, and they undoubtedly saved lives.
“They are deserving of New York’s profound gratitude.
“And apparently of something else: tax bills.
“In May, New York Governor Andrew Cuomo announced that New York would be levying income tax on any money these medical professionals made while they were there.
“Now, individuals can generally receive a tax credit in their home state for income tax paid to another state, thus avoiding double taxation of their income.
“But since New York has one of the highest income taxes in the country, a lot of these medical professionals will be facing a higher than normal tax bill on any money they earned in New York.
“The situation is even worse for residents of states without an income tax, like my home state of South Dakota.
“Medical professionals from those states will simply have to absorb the full cost of this unexpected bill.
“Mr. President, the health care workers who traveled to New York are not alone in facing a complicated tax situation.
“For Americans who regularly spend limited time working in different states throughout the year, the situation can be even worse.
“A traveling nurse, for example, or a corporate trainer might work in not just one but several additional states during a given year.
“And navigating the resulting income tax situation can be incredibly complicated.
“Some states – like New York – aggressively tax individuals they deem to have earned income within their borders – even if the “income” in question is just the salary they earn from their employer while attending a two-day training conference in the state.
“Other states allow nonresidents to work for a longer period – as long as 60 days in some cases – before they require the individual to file an income tax return.
“Navigating different states’ requirements can be a real burden for both employees and employers, and discourage interstate commerce.
“It’s particularly challenging for smaller businesses, who frequently lack the in-house tax staff and tracking capabilities of larger organizations.
“The situation cries out for a solution.
“And for the past four Congresses, I’ve introduced legislation – the Mobile Workforce State Income Tax Simplification Act – to create a uniform standard for mobile workers.
“Under my bill, if you spent 30 days or fewer working in a different state, you would be taxed as normal by your home state.
“If you spent more than 30 days working in a different state, you would be subject to that other state’s income tax in addition to income tax from your home state.
“Having a universal rule like this would make life a lot easier for workers and employers.
“In June, I introduced an updated version of my Mobile Workforce bill – the Remote and Mobile Worker Relief Act – which I am pleased to announce has been included in the HEALS Act, the Phase IV coronavirus relief package Republicans introduced yesterday.
“Like my original Mobile Workforce bill, the Remote and Mobile Worker Relief Act would create a uniform 30-day standard governing state income tax liability for mobile workers.
“But my new bill goes further and addresses some of the particular challenges faced by mobile and remote workers as a result of the coronavirus.
“The Remote and Mobile Worker Relief Act would establish a special 90-day standard for health care workers who travel to another state to help during the pandemic.
“This should ensure that no health care worker faces an unexpected tax bill for the contributions he or she makes to fighting the coronavirus.
“My new bill also addresses the possible tax complications that could face remote workers as a result of the pandemic.
“During the coronavirus crisis, many workers who usually travel to their offices every day have ended up working from home.
“This doesn’t present a tax problem for most employees, but it does present a possible problem for workers who live in a different state than the one they work in.
“Workers who live in a different state from the one they work in are subject to income tax from both states, but under current state tax laws they usually pay most or all of their state income taxes to the state in which they earn their income, rather than their state of residence.
“However, now that some workers who usually work in a different state have been working from home, there’s a risk that their state of residence could consider the resulting income as allocated to and taxable by it as well.
“That could mean a higher tax bill for a lot of workers.
“My bill would preempt this problem by codifying the pre-pandemic status quo.
“Under my bill, if you planned to work in North Carolina but had to work from home in South Carolina during the pandemic, your income would still be taxed as if you were going in to the office in North Carolina every day, just as it would have been if the pandemic had never happened.
“Mr. President, relief for mobile workers is a bipartisan idea.
“A version of my original Mobile Workforce bill has passed the House of Representatives multiple times, and the only reason it hasn’t advanced so far in the Senate is because of the opposition of a handful of states that aggressively tax temporary workers.
“Now that the pandemic has highlighted the challenges facing mobile workers – and the potential challenges facing remote workers – I am pleased that my legislation will be considered here in the Senate as part of the broader coronavirus relief package we hope to pass in the next couple of weeks.
“And I’m grateful to Chairman Grassley for his support of this legislation.
“It is unconscionable that we would allow health care workers who risked their own lives to care for individuals in coronavirus-stricken states to be punished with unexpected tax bills.
“And we need to make sure that Americans who worked from home to help slow the spread of the virus don’t face a complicated tax situation – or an unexpectedly high tax bill – as a result.
“Americans have faced enough challenges over the past several months.
“Let’s make sure that tax problems are not among them.”