H.R.2165 – Exit Tax Prevention Act of 2021 is a bill introduced by Arizona Congressional Representative David Schweikert. This bill prohibits a state, or taxing jurisdiction in the state, from imposing an income tax, wealth tax, or any similar tax on a resident who has relocated permanent residence to another state or taxing jurisdiction. Co-sponsors of the Bill include Representatives Scott Barry(R-PA), Tracey Mann(R-PA), Scott Franklin(R-FL), Jody Hice(R-GA), Paul Gosar(R-AZ), Pat Fallen(R-TX), Fred Keller(R-PA).
Text of H.R.2165 states:
To limit the authority of a State or other related taxing jurisdiction to impose a tax on a resident who has relocated permanent residence to another State or its related taxing jurisdiction.
Mr. Schweikert (for himself, Mr. Perry, Mr. Mann, Mr. C. Scott Franklin of Florida, and Mr. Hice of Georgia) introduced the following bill; which was referred to the Committee on the Judiciary
To limit the authority of a State or other related taxing jurisdiction to impose a tax on a resident who has relocated permanent residence to another State or its related taxing jurisdiction.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
This Act may be cited as the “Exit Tax Prevention Act of 2021”.
SEC. 2. PROHIBITION ON CERTAIN STATE AND LOCAL TAXATION.
A State, or taxing jurisdiction in a State, may not impose an obligation for the collection of an income tax, wealth tax, or any similar tax on a resident who has relocated permanent residence to another State or a taxing jurisdiction of another State.
For purposes of this Act:
(1) INCOME TAX.—The term “income tax” has the same meaning given to it by the taxing jurisdiction in which the resident lives.
(2) RESIDENT.—The term “resident” has the same meaning given to it by the taxing jurisdiction in which the resident lives.
(3) SIMILAR TAX.—The term “similar tax” means any imposed tax on an individual relating to the net wealth, value of held assets, or annual income of such individual.
(4) TAXATION JURISDICTION.—The term “taxing jurisdiction” means any of the several States, the District of Columbia, any territory or possession of the United States, or any municipality, city, county, township, parish, transportation district, assessment jurisdiction, or other political subdivision within the territorial limits of the United States with the authority to impose a tax, charge, or fee.
(5) WEALTH TAX.—The term “wealth tax” means any imposed tax on an individual’s net wealth or value of held assets.
(a) Effective Date.—This Act shall apply to calendar years beginning after December 31, 2021.
(b) Application.—This Act shall not apply to any tax obligation that accrues before January 1, 2022.
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1 comment on “Want To Leave Your State To Reduce Taxes? Pay Attention To Congressional Introduction Of Exit Tax Prevention Act of 2021”
Please make this work at the federal level for Americans abroad. Americans abroad should not be taxed on the income they earn outside of the USA while outside of the USA as a resident of another country.
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