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(b) The table of sections for such subchapter is amended by inserting after the item relating to section 5516 the following:

“5516A. Voluntary withholding of Maryland and Virginia income taxes; certain officers and employees in legislative branch.

Amend the title so as to read:

A bill to authorize voluntary withholding of Maryland and Virginia income taxes from the compensation of certain officers and employees in the legislative branch of the Government.

I. SUMMARY

H.R. 11408 would provide for the establishment of a voluntary State income tax withholding system for certain officers and employees of the legislative branch of the U.S. Government who are subject to the income taxes imposed by Maryland or Virginia. Under the bill, the officers and employees who, at their own option, are allowed to have Virginia or Maryland income tax withheld from their pay are Members of the House, employees whose compensation is disbursed by the Clerk of the House, and employees under the jurisdiction of the Architect of the Capitol. The bill does not impose any additional requirements on these officers or employees, or affect their liability for State income tax. It merely affords them the opportunity on a voluntary basis to satisfy their Virginia or Maryland income tax obligations through a withholding system.

A similar voluntary State income tax withholding system presently exists for employees of the executive branch of the U.S. Government, and employees of the Library of Congress and the Government Printing Office who work in the District of Columbia and who are residents of Maryland or Virginia. This bill has been reported unanimously by your committee and the Treasury Department has indicated that it has no objection to its enactment.

II. GENERAL STATEMENT

Reasons for bill.-Present law authorizes agencies of the executive branch of the U.S. Government, the Library of Congress and the Government Printing Office, to enter into agreements with State officials to withhold State income tax from the pay of their employees if the employees desire the withholding and work in the District of Columbia but are residents of Maryland or Virginia. Such agreements have been entered into. (Withholding is also provided where the employee works in the State which provides for the withholding, but in these cases it is not voluntary with the employee.) Thus, these executive branch employees may, if they so desire, satisfy their State income tax obligations on a current, pay-as-you-go basis. No similar authority exists with respect to employees of the legislative branch. The existence of a voluntary State income tax withholding system is a distinct advantage and convenience for employees. In the absence of such a system, employees of the legislative branch are required to pay their State income tax on an estimated, quarterly basis. For many employees the computations on, and filing of, declarations and the need to make larger (even though less frequent) taxpayments represent an undesirable burden or, at the least, an inconvenience.

Your committee believes that officers and employees of the legislative branch who are subject to the income taxes imposed by Maryland or Virginia should be afforded the same opportunity to have State income tax withheld that similarly situated executive branch employees have. Accordingly, your committee's bill authorizes this withholding on a purely voluntary basis for Members and employees of the House and employees under the Architect of the Capitol. The bill does not impose any additional requirements on these legislative branch officers or employees, or affect their liability for State income tax; rather it merely affords them the voluntary choice to pay their Mayland or Virginia income tax on a pay-as-you-go basis through a withholding system.

Explanation of bill.-The bill provides that specified officials of Congress shall enter into agreements for voluntary income tax withholding with Maryland and with Virginia, if the proper State official requests such an agreement. The specified congressional officials with whom the States may enter into agreements are the Clerk of the House, the Sergeant at Arms of the House, and the Architect of the Capitol. An agreement entered into pursuant to this provision is to provide that State income tax will be withheld in the case of each Member of Congress and each employee who is subject to the tax and who voluntarily agrees to the withholding. The withholding is to be available to employees who work in the District of Columbia as well as any who work in Virginia or Maryland.

In addition to the Members of the House from these States who may agree to have Maryland or Virginia income tax withheld, the employees who may agree to have Maryland or Virginia income tax withheld under this bill are those whose compensation is disbursed by the Clerk of the House and those who are under the jurisdiction of the Architect of the Capitol. Your committee has not included Senators or employees of the Senate within the scope of the bill because it believes, that in accord with the rules of comity between the House and the Senate, this is a matter which should be reserved for the judgment of the Senate.

The agreements which the bill authorizes between the specified officials of Congress and the States of Maryland and Virginia are not to give the consent of the United States to the application of any statute which imposes more burdensome requirements on the United States than on employers generally in the State with which the agreement is made, or which subjects the United States or its employees to a penalty or liability because of the agreement.

It is your committee's expectation that the agreements entered into under this bill will allow flexibility as to the amounts which an employee may agree to have withheld."

CHANGES IN EXISTING LAW MADE BY THE BILL, AS

REPORTED

In compliance with clause 3 of rule XIII of the Rules of the House of Representatives, changes in existing law made by the bill, as reported, are shown as follows (new matter is printed in italic, existing law in which no change is proposed is shown in roman):

TITLE 5, UNITED STATES CODE

CHAPTER 55-PAY ADMINISTRATION

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Subchapter II—Withholding Pay

5511. Withholding pay; employees removed for cause.

5512.

5513.

5514.

5515.

5516.

5516 A.

5517. 5518.

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Withholding pay; individuals in arrears.

Withholding pay; credit disallowed or charge raised for payment.
Installment deduction for indebtedness because of erroneous payment.
Crediting amounts received for jury service in State courts.

Withholding District of Columbia income taxes.

Voluntary withholding of Maryland and Virginia income taxes; certain officers and employees in legislative branch.

Withholding State income taxes.

Deductions for State retirement systems; National Guard employees.

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§ 5516. Withholding District of Columbia income taxes

(a) The Secretary of the Treasury, under regulations prescribed by the President, shall enter into an agreement with the Commissioners of the District of Columbia within 120 days of a request for agreement from the Commissioners. The agreement shall provide that the head of each agency of the United States shall comply with the requirements of subchapter II of chapter 15 of title 47, District of Columbia Code, in the case of employees of the agency who are subject to income taxes imposed by that subchapter and whose regular place of employment is within the District of Columbia. The agreement may not apply to pay for service as a member of the armed forces, or to pay of an employee who is not a resident of the District of Columbia as defined in subchapter II of chapter 15 of title 47, District of Columbia Code. For the purpose of this subsection, "employee" has the meaning given it by section 1551c(z) of title 47, District of Columbia Code.

(b) This section does not give the consent of the United States to the application of a statute which imposes more burdensome requirements on the United States than on other employers, or which subjects the United States or its employees to a penalty or liability because of this section.

§ 5516A. Voluntary withholding of Maryland and Virginia income taxes; certain officers and employees in legislative branch

The Clerk of the House of Representatives, the Sergeant at Arms of the House of Representatives, and the Architect of the Capitol shall each enter into an agreement with the State of Maryland, and an agreement with the State of Virginia, at the request for agreement from the proper State official. The agreement shall provide that

(1) the Clerk of the House of Representatives, in the case of employees whose compensation is disbursed by him,

(2) the Sergeant at Arms of the House of Representatives, in the case of Members of the House of Representatives, and

(3) the appropriate disbursing officer, in the case of employees under the jurisdiction of the Architect of the Capitol,

shall withhold State income tax in the case of each Member and employee who is subject to such income tax and voluntarily agrees to such withholding.

§ 5517. Withholding State income taxes

(a) When a State statute

(1) provides for the collection of a tax by imposing on employers generally the duty of withholding sums from the pay of employees and making returns of the sums to the State; and

(2) imposes the duty to withhold generally with respect to the pay of employees who are residents of the State;

the Secretary of the Treasury, under regulations prescribed by the President, shall enter into an agreement with the State within 120 days of a request for agreement from the proper State official. The agreement shall provide that the head of each agency of the United States shall comply with the requirements of the State withholding statute in the case of employees of the agency who are subject to the tax and whose regular place of Federal employment is within the State with which the agreement is made. The agreement may not apply to pay for service as a member of the armed forces.

(b) This section does not give the consent of the United States to the application of a statute which imposes more burdensome requirements on the United States than on other employers, or which subjects the United States or its employees to a penalty or liability because of this section. An agency of the United States may not accept pay from a State for services performed in withholding State income taxes from the pay of the employees of the agency.

(c) For the purpose of this section, "State" means a State or territory or possession of the United States.

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