Jason Mercier: Washington residents should not have to pay other states’ income taxes when traveling for work
As we just witnessed with the passage of the 2017 federal tax reform bill, it is hard to find bipartisan consensus on tax policy. The biggest tax policy change in a generation passed with only Republican votes.
There is one tax reform idea, however, that is breaking the partisan mold: the Mobile Workforce State Income Tax Simplification Act.
This bipartisan proposal is so popular it passed the U.S. House by voice-vote on June 20. The Senate version currently has 60 bipartisan sponsors, including both Washington Sens. Patty Murray and Maria Cantwell.
What would this bill do?
It would protect Washingtonians and other Americans from being subject to income taxes imposed by states they visit when traveling for work.
Despite being one of nine states without a personal income tax, under the current law, when we work in another state for a brief period we can be subject to that state’s income tax and all the administrative burdens that go with owing a state income tax.
This out-of-state income tax can be incurred for something as simple as attending a work-related conference, or, in one extreme example, if you are unlucky enough to take a connecting flight through New York’s LaGuardia airport while traveling for work (New York’s definition of a work day is very broad).
The Mobile Workforce State Income Tax Simplification Act would fix this problem by preventing local tax officials from imposing an income tax on you unless you work for more than 30 days in that state.
Before athletes and movie stars get too excited, however, the bill’s term for “employee” excludes professional athletes, professional actors, music entertainers, and production employees for film, television and commercial video.
Leaving the debate over “jock taxes” for another day, this proposal would ensure that average Washingtonians don’t face an unfair state income tax burden for routine business travel. Those working in an income tax state for more than 30 days (here’s looking at you, Clark County commuters to Portland), however, would still owe income tax in those states.
One of Washington’s major competitive selling points is our lack of a state income tax. The need to travel briefly to another state for work should not suddenly subject Washingtonians to income taxes that pay for government services in another state. Our boarding passes should not double as golden-tickets for another state’s taxman.
After the recent tough fight over passage of the 2017 federal tax reform bill, the Mobile Workforce State Income Tax Simplification Act provides Congress the opportunity to work across party lines on common sense tax reform.
The House has already acted. With a filibuster-proof 60 sponsors, now it is time for the Senate to do the same.
As co-sponsors, hopefully Sens. Murray and Cantwell can help lead the effort to put this important reform over the top, so Washingtonians will not be forced to pay out-of-state income tax when working briefly in another state.
Jason Mercier is the Government Reform director for Washington Policy Center, a non-profit, non-partisan research organization with offices in Tri-Cities, Spokane, Seattle and Olympia. Online at www.washingtonpolicy.org.
This story was originally published January 26, 2018 at 4:21 PM with the headline "Jason Mercier: Washington residents should not have to pay other states’ income taxes when traveling for work."