New legislation could significantly impact how businesses and CPAs handle nonresident state tax withholding
A new bipartisan Senate bill introduced last week aims to simplify the complex landscape of multistate tax compliance—a development that Virtue CPAs expects will bring welcome relief to businesses operating across state lines.
The Mobile Workforce State Income Tax Simplification Act of 2025 (S. 1443), introduced by Senate Majority Leader John Thune (R-S.D.) and Sen. Catherine Cortez Masto (D-Nev.), proposes a standardized 30-day threshold before states can impose income tax and withholding requirements on non-residents working within their borders.
“This legislation addresses one of the most persistent compliance headaches for our clients,” said a spokesperson from Virtue CPAs. “The current patchwork of state requirements creates unnecessary complexity and administrative burden for businesses of all sizes.”
The American Institute of CPAs (AICPA) has strongly endorsed the bill, describing it as “critically important” for CPA firms and their business clients. The legislation has also gained support from the U.S. Chamber of Commerce, the Council on State Taxation, and the Mobile Workforce Coalition.
Impact on Businesses and CPAs
For businesses with employees who travel across state lines—whether for client meetings, conferences, or temporary assignments—the proposed legislation would provide much-needed clarity and consistency. Currently, companies must navigate varying state laws with different rules based on length of stay, income earned, or de minimis exceptions.
Virtue CPAs, which has specialized in helping businesses navigate complex tax landscapes since its founding in 2016, has seen firsthand how these inconsistent requirements can create compliance risks and administrative burdens for their clients.
“Multistate tax compliance is particularly challenging for small and mid-sized businesses that lack dedicated tax departments,” noted Virtue CPAs. “A uniform 30-day threshold would allow these businesses to focus more on growth and less on administrative paperwork.”
The bill excludes certain professions from the 30-day standard, including professional athletes, entertainers, film workers, and public figures, recognizing their unique work patterns.
Looking Ahead
While the bill’s passage remains uncertain, its introduction represents significant progress in addressing the challenges faced by today’s increasingly mobile workforce.
As businesses continue to navigate the complex tax environment, Virtue CPAs remains committed to providing expert guidance and compliance support. Their team of experienced accountants and tax professionals specializes in helping clients stay ahead of regulatory changes while optimizing their tax positions.
For businesses concerned about multistate tax compliance or seeking to prepare for potential legislative changes, Virtue CPAs offers personalized consultations and customized solutions designed to meet the unique needs of each client.