Prior to the COVID pandemic, many state taxing authorities asserted that businesses are subject to their state’s tax obligations by having a single employee working from within the states - even if there were no other connections between the business and those states. As a result, some states tried to force these businesses to comply with employer withholding obligations, to pay income, franchise, gross receipts, or other state business taxes. At the beginning of the pandemic, many businesses were forced to move quickly to a work-from-home model. As a result, many employees began working from states other than where their offices were located. In response to concerns raised by employers, some states announced relief from tax obligations ordinarily imposed on a business whose employees work in those states.

As of 2023, about 26% of all Americans employees now work remotely. About 60% of these workers say they are more likely to choose an employer that allows remote work rather than one that doesn't. However, as many employers consider adopting longer-term, or even permanent, work-from-home or work-from-anywhere policies, businesses need to know how to comply with state and local tax obligations. Advocates say Congress needs to take action to simplify compliance with state and local tax obligations for businesses.

Pending Legislation: S. 1443 Mobile Workforce State Income Tax Simplification Act of 2025
Sponsor: Sen. John Thune (SD)
Status: Senate Committee on Finance
Chair: Sen. Mike Crapo (ID)

• I oppose reforming current remote worker policy and wish to donate resources to the campaign committee of Leader John Thune (SD).
• I support simplifying state income tax requirements for employees who work in multiple states. Key provisions include:
  
  1.) An employee who works in a state for 30 days or less during a calendar year would not be subject to income tax withholding or reporting requirements in that nonresident state.
  
  2.) The employee's state of residence retains its full authority to tax all of the employee's income.
  
  3.) As under current law, an employee who works in a nonresident state for more than 30 days and pays taxes there can claim a tax credit from their home state to avoid double taxation.
  
  4.) To reduce compliance burdens, employers can rely on an employee's annual reporting of their expected work locations, unless they have evidence of fraud or collusion.
  
  5.) The act does not apply to certain categories of workers, such as professional athletes, entertainers, and some public figures.
  
  And wish to donate resources to the campaign committee of Sen. Mike Crapo (ID) and/or to an advocate group currently working with this issue.