Nonresident Income Tax Freedom Act of 2001

The Nonresident Income Tax Freedom Act of 2001 (S. 759) proposed a federal ban on states taxing the income of individuals who do not live within their borders. Under this legislation, a state would be prohibited from collecting income tax from nonresidents working there unless the state had entered into a specific agreement, known as a compact, with the worker's home state.

For the average citizen, this bill would have primarily impacted "super-commuters" and those who live in one state but work in another. If passed, it would have prevented states from taxing the wages of out-of-state residents, potentially simplifying tax filings for millions of workers and ensuring they only owe income tax to the state where they actually reside.