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AICPA ENDORSES BILL TO STANDARDIZE STATE NONRESIDENT WITHHOLDING

November 05, 2007

Dealing with state tax issues can be a nightmare for businesses and their employees. A small Iowa company might have projects in Illinois, Missouri, Minnesota and Nebraska, and each state might want to tax the employees and collect withholding from them. Different states have different rules over how long you have to be in a state to be taxed.

H.R. 3359 would create a uniform nationwide rule that an employee would have to be in a state for 60 days in a year to be subject to that state's income tax. That would also exempt the employer from having to withhold on employees who don't hit the 60 day limit.

The AICPA has endorsed the bill. So does the Tax Update.

Hat tip: TickMarks.

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