Menu
Tax Notes logo

GOP Pauses Relief Bill Quest, Wants Traveling Worker Tax Equity

Posted on May 20, 2020

Republicans rejected quick action on a fourth coronavirus relief package, tossing aside legislation with numerous tax provisions approved by the House May 15.

Senate Majority Leader Mitch McConnell, R-Ky., stayed on course with his message to see how the economy plays out before cobbling together another relief package. With the Senate in recess the week of May 25, additional legislation to help taxpayers and the economy rebound from the COVID-19 crisis will be put on hold until June.

Despite rejecting the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act (H.R. 6800), Republicans say a bill at some point is necessary, and insist that a provision to limit liability for businesses be included.

Senate Finance Committee member John Cornyn, R-Texas, told reporters May 19 that he continues to speak with business leaders and groups about the best way to proceed with a measure that would limit liability for businesses that reopen.

“The threat of litigation is as much a deterrent to reopening the economy as anything else,” Cornyn said. Other Republicans have shared that message, concerned that lawyers would benefit most once states reopen.

Senate Majority Whip John Thune, R-S.D., agreed with that assessment and said Republicans are working on a measured approach to help the business community.

Thune also questioned why Democrats have proposed spending $3 trillion in their latest relief package, saying that relaxing regulatory restrictions and making small fixes could help spur the economy without adding to the deficit.

Mobile Workforce Bill

Thune, who also sits on the Finance Committee, said he is promoting his Mobile Workforce State Income Tax Simplification Act of 2019 (S. 604) to help workers who cross state lines for brief periods of time. The bill would exempt workers from filing returns in another state if they work there for 30 or fewer days a year.

Thune said the legislation, which he introduced with fellow Finance Committee member Sherrod Brown, D-Ohio, is particularly significant during the coronavirus pandemic as medical professionals flock to states like New York to help with patients.

“We need to make sure that doctors and nurses who traveled to other states to help fight the coronavirus aren’t rewarded with big tax bills,” Thune said, taking a swipe at New York after its governor said the state would seek taxes from healthcare workers.

Despite having bipartisan support from 38 cosponsors in the Senate, Thune's bill is unlikely to find much support from Senate Minority Leader Charles E. Schumer, D-N.Y., who has historically stood in the way of mobile workforce bills. The measure would also hit a wall in the lower chamber, where House Judiciary Committee Chair Jerrold Nadler, D-N.Y., has prevented the introduction of such a measure in his committee.

Rep. Henry C. “Hank” Johnson Jr., D-Ga., told Tax Notes in February after introducing the House version of the bill that he would continue to urge Nadler to present the bill in the Judiciary Committee, of which he is also a member.

Lawmakers would also require another relief package to clarify that costs associated with the Paycheck Protection Program are tax deductible. Lawmakers from both parties came together to introduce legislation to make that change, with the hope that it would be included in the next bill. Cornyn said he would prefer a legislative fix, but left open the possibility for Treasury to issue new guidance reversing its previous notice preventing companies from claiming a deduction for such costs. 

Copy RID