---
kind: "section"
citation: "49 U.S.C. § 14503"
title: "49"
title_heading: "Transportation"
number: "14503"
heading: "Withholding State and local income tax by certain carriers"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/49/14503"
units:
  - "Subtitle IV — Interstate Transportation"
  - "Part B — Motor Carriers, Water Carriers, Brokers, and Freight Forwarders"
  - "Chapter 145 — Federal-State Relations"
---

# §14503. Withholding State and local income tax by certain carriers

- (a) **Single State Tax Withholding.—**
  - (1) **In general.—** No part of the compensation paid by a [motor carrier](/usc/49/13102.md?p=14) providing [transportation](/usc/49/10102.md?p=9) subject to jurisdiction under subchapter I of [chapter 135](/usc/49/chstIV/ptB/ch135.md) or by a [motor private carrier](/usc/49/13102.md?p=15) to an employee who performs regularly assigned duties in 2 or more [States](/usc/49/10102.md?p=8) as such an employee with respect to a [motor vehicle](/usc/49/13102.md?p=16) shall be subject to the income tax laws of any [State](/usc/49/10102.md?p=8) or subdivision of that [State](/usc/49/10102.md?p=8), other than the [State](/usc/49/10102.md?p=8) or subdivision thereof of the employee’s residence.
  - (2) **Employee defined.—** In this subsection, the term “employee” has the meaning given such term in section 31132.
- (b) **Special Rules.—**
  - (1) **Calculation of earnings.—** In this subsection, an employee is deemed to have earned more than 50 percent of pay in a [State](/usc/49/10102.md?p=8) or subdivision of that [State](/usc/49/10102.md?p=8) in which the time worked by the employee in the [State](/usc/49/10102.md?p=8) or subdivision is more than 50 percent of the total time worked by the employee while employed during the calendar year.
  - (2) **Water carriers.—** A [water carrier](/usc/49/13102.md?p=26) providing [transportation](/usc/49/10102.md?p=9) subject to jurisdiction under subchapter II of [chapter 135](/usc/49/chstIV/ptB/ch135.md) shall file income tax information returns and other reports only with—
    - (A) the [State](/usc/49/10102.md?p=8) and subdivision of residence of the employee (as shown on the employment records of the [carrier](/usc/49/13102.md?p=3)); and
    - (B) the [State](/usc/49/10102.md?p=8) and subdivision in which the employee earned more than 50 percent of the pay received by the employee from the [carrier](/usc/49/13102.md?p=3) during the preceding calendar year.
  - (3) **Applicability to sailors.—** This subsection applies to pay of a master, officer, or sailor who is a member of the crew on a [vessel](/usc/49/13102.md?p=25) engaged in foreign, coastwise, intercoastal, or noncontiguous trade or in the fisheries of the [United States](/usc/49/10102.md?p=10).
- (c) **Filing of Information.—** A motor and [motor private carrier](/usc/49/13102.md?p=15) withholding pay from an employee under [subsection (a)](#a) of this section shall file income tax information returns and other reports only with the [State](/usc/49/10102.md?p=8) and subdivision of residence of the employee.

## Source credit

(Added Pub. L. 104–88, title I, § 103, Dec. 29, 1995, 109 Stat. 901.)

## Notes

### Editorial Notes

### Prior Provisions

Provisions similar to those in this section were contained in section 11504 of this title prior to the general amendment of this subtitle by Pub. L. 104–88, § 102(a).

### Statutory Notes and Related Subsidiaries

### Effective Date

Section effective Jan. 1, 1996, except as otherwise provided in Pub. L. 104–88, see section 2 of Pub. L. 104–88, set out as a note under section 1301 of this title.