Multi-State Worker Tax Fairness Act of 2021
Key claim: This bill would stop a state from taxing a nonresident worker’s wages except for days that worker was physically present in the state.
Abstract
(S1887 · 117th Congress) Multi-State Worker Tax Fairness Act of 2021 This bill limits the authority of a state to impose its income tax on the compensation of a nonresident individual to the period in which the nonresident individual is physically present in the state. Latest action (2021-05-27): Read twice and referred to the Committee on Finance.
Why this matters
State taxation of remote and cross-border workers is contested because some states (notably New York) tax nonresidents on wages ‘sourced’ to an in-state employer even when the employee never sets foot in the state, producing double-taxation risk and compliance burden. A physical-presence rule would shift revenue from employer-location states to residence states and simplify multi-state withholding. The 2021 bill did not advance beyond committee referral, but it establishes the recurring template for federal preemption proposals in this area.