Mobile Workforce Legislation: The Push for a 30-Day National Safe Harbor

The American system of state income taxation creates a compliance nightmare for traveling employees and their employers. An employee who works in multiple states during a year potentially triggers state income tax withholding and non-resident income tax filing obligations in each state, subject to each state's day-count rules. With 50 different state regimes — some requiring withholding from day one, others applying 14-day, 20-day, or 30-day thresholds — the patchwork is widely acknowledged as inefficient and burdensome.

This article explains the problem the Mobile Workforce bill tries to solve, the bill itself (S. 1443, reintroduced in April 2025), what it would do, the bill's history, state-level safe harbors already in effect, the Council on State Taxation (COST) model legislation, why the bill has not passed, what happens if it does pass, what employers should do now, the post-COVID impact on the bill's prospects, and how to advocate for the bill.

The problem the Mobile Workforce bill tries to solve

The problem is the patchwork. Each of the 41 states (plus the District of Columbia) with a broad-based individual income tax has its own rule for when non-resident employee withholding is required. A few states require withholding from the first day of work in the state. Others have de minimis thresholds ranging from 14 to 30 days, below which no withholding is required. Some states have no de minimis threshold at all. The mechanics of the thresholds vary — some states exempt the first 30 days entirely, while others require withholding retroactively if the threshold is exceeded.

For an employer with traveling employees, compliance means tracking each employee's day count in each state, applying each state's threshold, registering for withholding in each state where the threshold is crossed, and withholding the appropriate amount. The administrative burden grows with the number of traveling employees and the number of states involved. For employees, the burden manifests as multiple state tax filings at year-end, complex credit computations on the resident state return, and potential underpayment penalties if withholding was insufficient. The compliance cost is widely recognized as disproportionate to the tax revenue at stake.

The Mobile Workforce State Income Tax Simplification Act

The Mobile Workforce State Income Tax Simplification Act (S. 1443) is the principal federal legislative response to the patchwork problem. The bill was most recently reintroduced in April 2025 by Senators John Thune (R-SD) and Sherrod Brown (D-OH). The bill has been introduced in substantially similar form in multiple prior Congresses, typically with bipartisan co-sponsorship. The bill has consistently passed the Senate Finance Committee but has not received a floor vote in either chamber.

The bill's text is short and focused. It would amend Title 4 of the United States Code to add a new chapter limiting state authority to tax non-resident employees. The bill does not affect state authority to tax residents, to tax non-resident employees who exceed the 30-day threshold, or to tax income other than employee compensation. The bill is specifically targeted at the traveling-employee problem and does not address other multi-state tax issues such as the convenience rule or business income apportionment.

What the bill would do

The bill would create a national 30-day safe harbor for non-resident employee compensation. Under the bill, no state could require an employer to withhold state income tax on wages paid to a non-resident employee for services performed in the state if the employee is present in the state for 30 days or fewer during the calendar year. The bill also prohibits the state from imposing non-resident income tax on the employee for those wages, eliminating the need for the employee to file a non-resident return.

The bill applies the safe harbor on a per-employee, per-state, per-calendar-year basis. An employee who works 25 days in New York and 25 days in California would benefit from the safe harbor in both states, because neither state's 30-day threshold is exceeded. An employee who works 35 days in New York would not benefit from the safe harbor in New York, and the employer would be required to withhold for all 35 days (or, depending on the state's mechanics, for the days above the threshold). The bill defines "days" broadly, including travel days and partial days, consistent with the convention most states already apply.

The 30-day threshold

The choice of 30 days as the threshold reflects a compromise. The COST model legislation, on which the bill is substantially based, recommends 30 days. Some advocacy groups have argued for a higher threshold (60 days), which would provide broader relief. State revenue departments have argued for a lower threshold (14 or 20 days) or for no federal safe harbor at all. The 30-day threshold has emerged as the most widely accepted compromise, although it remains a source of debate.

The bill's history

The Mobile Workforce bill has been introduced in every Congress since the mid-2000s. In earlier iterations, the bill was known as the Mobile Workforce State Income Tax Simplification Act of 2015, 2017, 2019, 2021, 2023, and now 2025. The bill has consistently enjoyed bipartisan support in the Senate, with Senators Thune and Brown as the principal sponsors in recent Congresses. The bill has passed the Senate Finance Committee multiple times, most recently with strong bipartisan support, but has not received a floor vote in either chamber.

The bill's support comes from a broad coalition of professional and business associations. The American Institute of Certified Public Accountants (AICPA) has long supported the bill, citing the compliance burden on practitioners and their clients. The American Payroll Association (APA) supports the bill on behalf of payroll professionals who must navigate the patchwork. The Council on State Taxation (COST), which represents major multistate businesses, supports the bill as a simplification measure. The Society for Human Resource Management (SHRM) supports the bill on behalf of HR professionals who manage traveling-employee compliance.

State-level safe harbors already in effect

In the absence of federal legislation, several states have enacted their own safe harbors for non-resident employee withholding. The state safe harbors are based largely on the COST model legislation (discussed below) and provide a 30-day threshold, though the details vary. These state safe harbors are a useful partial solution, but they do not address the underlying patchwork problem because they apply only in the enacting states.

Illinois (30-day safe harbor)

Illinois enacted a 30-day safe harbor for non-resident employee withholding under 35 ILCS 5/601. The Illinois rule exempts an employer from withholding requirements for a non-resident employee who works 30 days or fewer in Illinois during the calendar year. If the employee exceeds 30 days, withholding is required for all days worked in Illinois, not just the days above the threshold. The Illinois safe harbor is among the most established, having been in effect for several years.

Indiana (30-day safe harbor)

Indiana enacted a 30-day safe harbor under Indiana Code §6-3-4-12. The Indiana rule is similar to Illinois: an employer is not required to withhold for a non-resident employee who works 30 days or fewer in Indiana. The Indiana rule includes specific provisions for professional athletes, professional entertainers, and certain other categories of employees who may be subject to different rules.

Montana (30-day safe harbor)

Montana enacted a 30-day safe harbor under Montana Code Annotated §15-30-2110. The Montana rule exempts non-resident employees who work 30 days or fewer in Montana during the calendar year from withholding and from non-resident income tax. The Montana rule is broadly consistent with the COST model.

West Virginia (30-day safe harbor)

West Virginia enacted a 30-day safe harbor under West Virginia Code §11-21-32. The West Virginia rule exempts employers from withholding for non-resident employees who work 30 days or fewer in the state. The West Virginia rule is broadly consistent with the COST model and with the rules in Illinois, Indiana, and Montana.

Alabama (30-day safe harbor effective January 1, 2026)

Alabama enacted a 30-day safe harbor under Act 2025-334, effective January 1, 2026. The Alabama rule exempts employers from withholding for non-resident employees who work 30 days or fewer in Alabama during the calendar year. The Alabama enactment is the most recent state-level safe harbor and reflects continued state-level interest in mobile workforce simplification.

Other states with various thresholds

Several other states have de minimis thresholds that differ from 30 days. Some states apply a 20-day threshold. Others apply a 14-day threshold. A few states apply no threshold at all, requiring withholding from day one. The variations are wide enough that an employer with traveling employees must consult the specific rule of each state where employees work, even if some states have safe harbors. The state-level safe harbors are a useful step toward simplification, but they are not a substitute for a uniform federal rule.

The COST model legislation

The Council on State Taxation (COST) has developed model mobile workforce legislation that states can adopt. The COST model is the basis for most of the state-level 30-day safe harbors and for the federal Mobile Workforce bill. The COST model provides a 30-day safe harbor for non-resident employee compensation, with specific rules for defining "days," treating travel days and partial days, and handling threshold exceedance. The COST model also includes provisions for professional athletes, professional entertainers, and certain other categories of employees whose compensation is sourced under different rules.

COST, founded in 1976, is a nonprofit association representing more than 600 major multistate businesses on state tax matters. COST's model legislation is developed through a consensus process among its members and reflects the practical compliance concerns of multistate employers. The COST model has been influential in shaping both state legislation and the federal Mobile Workforce bill, and it is widely cited in academic and practitioner discussions of mobile workforce taxation.

Why the bill has not passed

Despite broad support and repeated introductions, the Mobile Workforce bill has not become law. Several factors contribute to the bill's stalling. The first is opposition from state revenue departments and state legislators, who are concerned about revenue loss and about federal preemption of state tax authority. Although the revenue impact is widely believed to be modest, the political symbolism of "losing" tax revenue to a federal mandate is significant. The second is disagreement about the threshold: some supporters advocate a 60-day threshold, which would provide broader relief but would also increase the revenue impact, while opponents argue for a lower threshold or no threshold at all.

The third factor is partisan disagreement about federal preemption of state tax authority. Although the bill has bipartisan co-sponsorship, the broader debate about federal-state tax jurisdiction has made it difficult to move the bill forward. The fourth factor is simple legislative priority: the bill is a simplification measure, not a revenue measure, and it competes for floor time with higher-profile tax legislation. The bill has consistently passed the Senate Finance Committee, demonstrating substantive bipartisan support, but it has not been prioritized for a floor vote.

What happens if the bill passes

If the Mobile Workforce bill is enacted, the impact would be significant for employers and traveling employees. Employers would no longer need to track day counts in states where employees work 30 days or fewer, would not need to register for withholding in those states for short-term visits, and would not need to file returns or remit tax for those visits. The compliance burden for traveling-employee payroll would drop dramatically. Employees would no longer face multiple state tax filings for short-term work in other states, simplifying their year-end tax compliance.

The state revenue impact would be modest but non-trivial. States with significant business travel (New York, California, Illinois, Massachusetts, the District of Columbia) would see reduced withholding from short-term non-resident workers. The actual revenue loss depends on how many employees currently trigger withholding in states where they work fewer than 30 days, which is difficult to estimate precisely. State legislatures may respond by tightening other tax rules or by seeking alternative revenue sources, though the political dynamic would depend on the specific state.

What employers should do now

While the bill is pending, employers should continue to comply with current state rules. This means tracking days worked per state for each traveling employee, applying each state's threshold, registering for withholding where required, and withholding the appropriate amounts. Employers should also monitor the bill's progress through professional associations such as AICPA, APA, COST, and SHRM, all of which provide regular updates on the bill's status.

Building compliant day-tracking systems now positions employers to take advantage of the safe harbor if it is enacted. The same systems that support current compliance (calendar logs, travel itineraries, time-tracking software) would support the safe harbor calculation, by providing the day counts needed to determine whether the 30-day threshold is exceeded. Employers that have not yet implemented day-tracking systems should do so, regardless of the bill's status, because current compliance already requires accurate day counts in many states.

The post-COVID remote work impact on the bill's prospects

The COVID-19 pandemic and the resulting expansion of remote work have changed the political calculus for the Mobile Workforce bill. The number of employees who work across state lines — even occasionally — has grown significantly since 2020. More employees now work from vacation homes, visit family in other states while working, or attend meetings in multiple states. The compliance burden has grown correspondingly, which has increased support for the bill among employers and employees.

At the same time, the revenue at stake for states has grown. More mobile workers means more potential withholding in states where employees do not live, and states may be reluctant to forgo that revenue. The post-COVID dynamic cuts both ways: the case for simplification is stronger, but the opposition from state revenue departments may also be stronger. The bill's prospects in the current Congress depend on whether the increased support outweighs the increased opposition.

How to advocate for the bill

Employers and practitioners who support the Mobile Workforce bill have several avenues for advocacy. The AICPA, APA, COST, and SHRM all maintain active advocacy programs supporting the bill, and joining or contributing to these associations strengthens their advocacy voice. The associations regularly meet with members of Congress and their staffs to discuss the bill, and member testimonials about the compliance burden are particularly effective. Direct contact with representatives — particularly members of the Senate Finance Committee and the House Ways and Means Committee — is also valuable.

Specific advocacy actions include writing to your senators and representative in support of the bill, requesting a meeting with their tax legislative staff, sharing concrete examples of the compliance burden the patchwork creates for your business or practice, and encouraging professional colleagues to do the same. The bill's bipartisan co-sponsorship is a strength, and the bill's prospects improve as more members of Congress hear from constituents who support it. Advocacy is most effective when it is specific, concrete, and tied to the experiences of actual employers and employees.

What to do next

Whether or not the Mobile Workforce bill passes, employers with traveling employees must comply with the current state-by-state rules. Take three steps now. First, implement a day-tracking system that captures each traveling employee's work location by state, using calendar logs, travel itineraries, and time-tracking software. Second, identify the states where each employee has crossed withholding thresholds and confirm that the employer is registered for withholding in each such state. Third, monitor the bill's progress through AICPA, APA, COST, or SHRM, and consider advocating for the bill through your professional associations or directly with your representatives. Run our multi-state withholding calculator to estimate the impact of current withholding obligations, and consult a licensed tax professional for your specific situation.