WASHINGTON -- Senators Maggie Hassan, Jeanne Shaheen, and colleagues today introduced legislation that would prevent other states from taxing Granite Staters who telework for companies located in another state. With more Americans than ever working remotely because of technological advances and the pandemic, the Multistate Worker Tax Fairness Act would simplify the tax code by establishing a simple, uniform standard based on physical presence in order to ensure that teleworkers are not taxed unfairly. Representative Chris Pappas will be co-leading the House companion bill.
“Granite Staters living and working in New Hampshire shouldn’t have to pay another states’ taxes, it is as simple as that. Yet with the expansion of remote work during the pandemic, we’ve seen states attempt to infringe on Granite Staters’ rights,” said Senator Hassan. “This bill makes it clear once and for all that other states cannot unconstitutionally tax New Hampshire residents.”
“As we’re working to get our economy back on track, we should pursue every avenue available to support, not punish, American workers who have struggled to make ends meet during these enormously challenging times. Many Granite Staters have been working remotely during this pandemic to protect the health of their families and communities, and they should not be penalized for it,” said Senator Shaheen. “I’m glad to partner with this group of lawmakers on this effort to ensure that New Hampshire workers are protected from opportunistic out-of-state taxing authorities.”
“I am disappointed that the Biden Administration has advised against the Supreme Court hearing New Hampshire’s case to stop Granite Staters from paying an income tax in Massachusetts for remote work,” said Representative Pappas. “Hard-working people who have followed the rules and did what was right by working from home in New Hampshire to keep their our communities safe during the pandemic will pay the price for inaction here. This development further underscores the need for a permanent, legislative fix to protect teleworking Granite Staters - and workers across the country - from being forced to pay an unfair income tax. Legislation I will help introduce in the House – and that Senators Hassan and Shaheen are pushing in the Senate - would do just that. I will continue to work to build bipartisan support around this issue so that we can get tax relief to our workers as quickly as possible.”
The Multistate Worker Tax Fairness Act establishes a simple, uniform federal standard based on a worker’s physical presence. The bill prohibits a state from imposing an income tax on the compensation a nonresident earns when that person is not physically in the state, and it ensures that people with out-of-state employers who telework, or whose job requires them to occasionally work in another state, do not have to pay out-of-state income taxes.
Senator Hassan has led efforts in the Senate to push back on out-of-state taxes imposed on New Hampshire residents. In February, Senator Hassan called for the COVID-19 relief package to include a bipartisan measure that would limit the authority of states to tax the income of employees who are working remotely in other states. Earlier this year, Senator Hassan questioned Deputy Treasury Secretary nominee Wally Adeyemo on this proposal and cited the need to prevent other states from taxing Granite Staters during his committee nomination hearing.
Senator Shaheen has been a long-time critic of out-of-state taxes imposed on New Hampshire residents. Shaheen successfully led efforts to stop the Marketplace Fairness Act, which was first introduced in 2011 to impose these internet sales tax collection requirements. She introduced legislation and wrote a letter with Senator Hassan to stop states with a sales tax from creating red tape for small businesses as a result of the Supreme Court’s Wayfair ruling. Senators Hassan and Shaheen also joined Senator Tester in reintroducing the Stop Taxing Our Potential (STOP) Act to overturn the Wayfair decision.