                                  The Attorney        General of Texas

JIM MATTOX                                       Iecember 30, 1985
Attorney General


Supreme Court Building           Honorable Lloyd Cr,iss              Opinion No. JM-411
P. 0. BOX 12548                  chairmen
Aus!in. TX. 78711. 2548          Committee on Labor,and              Re: Whether a neighboring state is
5121475.2501                        Employment Rela.tions            prohibited from withholding state
Telex 9101874.13S7
Telecopier   5121475.0266
                                 Texas House of Representatives      income tax payments from the salary
                                 P. 0. Box 2910                      of an employee who is a permanent
                                 Austin, Texas   7f769               resident of Texas but who works
714 Jackson, Suite 700                                               partially or temporarily in the
Dallas, TX. 75202.4506
                                                                     neighboring state
214l742.8944

                                 Dear Representatiw Criss:
4824 Alberta   Ave., Suite 160
El Paso, TX. 79905.2793               You have    submitted the following request regarding the
915/533-3464                     withholding of state income tax from,the pay of certain railroad
                                 employees who are Texas residents:
1001 Texas. Suite 700
Houston, TX. 77002~3111                      Individuals living in Texas and working for
713/2235&W                                railroad,8 are often required to travel through
                                          several states in the course of their daily
                                          employmsnt. Some of these states, notably the
906 Broadway, Suite 312
Lubbock, TX. 79401.3479
                                          neighboring states of Oklahoma and New Mexico,
8061747.5238                              require the railroad to withhold state income
                                          taxes from the pay of these workers, despite the
                                          fact t'iat these individuals maintain their
43G3 N. Tenth, Suite S
                                          permaner,tresidence in Texas.
McAllen, TX. 78501-1685
512M2.4547
                                             This practice seems to be inherently unfair. I
                                          would s,ppreciate your offering an opinion on
200 Main Plaza, Suite 400                 whether any laws of this state or of the United
San Antonio, TX. 78205.2797
                                          States prevent this practice of withholding state
512m54191
                                          income tax from the pay of an employee whose
                                          permanert residence is sot in that state, but who
An Equal Opportunity/                     is mere1.yworking for some period of time in the
Affirmative Action EmplOYer               state ir.the course of his/her employment.

                                 We are compelled to conclude that the railroad carriers in question
                                 are required to wl.thholdsuch taxes from the pay of certain workers.

                                      49 U.S.C., sc.ction11504, provides, in part, as follows:




                                                                  p. 1881
Honorable Lloyd Criss - Pa(:e2   (JM-411)




          (a)(l) In this subsection, an employee is deemed
          to have earned nor+ than 50 percent of pay in a
          State or subdivilij.on
                               of a State if the employee --

             (A) performs regularly assigned duties on a.
             locomotive, CIU:or other track-borne vehicle in
             at least 2 St:atesand the mileage traveled in
             one State or subdivision of that State is more
             than 50 percent of the total mileage traveled
             by the employee while employed during the
             calendar year;

             .   .   .   .

          (2) A rail, express, or sleeping car carrier
          providing    transportation   subject          the
          jurisdiction of the Interstate Commerce C~ission
          under subchapter I of chapter 105 of this title
          [49 USCS 1510501 et seq.] shall withhold from the
          pay of an employee referred to in paragraph (1) of
          this subsection <only income tax required to be
          withheld by the laws of a State, or subdivision of
          that State -

             (A) in which the employee earns more than 50
             percent of the pay received by the employee
             from the carrLer; or

             (B) that is the residence of the employee (as
             shown on thme employment records of the
             carrier), if t:he employee did not earn in one
             State or sub3:Lvisionmore than 50 percent of
             the pay reorived by the employee from the
             carrier during the preceding calendar year.

     Thus. federal law ex~~licitlyestablishes the standard upon which
the requirements of withholding state taxes by rail carriers are
based.   So long as thg! railroads comply with the legislative
determination regarding w'v~re "an employee is deemed to have earned
more than 50 percent of p,yr,"it is apparent that the withholding by
the railroad of state income taxes is authorized by the state in which
an employee is deemed to have earned withholding.


                             SUMMARY

             Rail carrier:!are required to withhold income
          taxes from the pay of an employee whose residence
          is Texas if scch employee is correctly deemed




                                 p. 1882
Honorable Lloyd Criss - Page 3    (JM-411)




          under federal law to have earned more than 50
          percent of pay in a state which imposes such
          taxes.




                                        JIM     MATTOX
                                        Attorney General of Texas

JACXHIGRTOWBR
First Assistant Attorney Gmeral

MARY KELLER
Executive Assistant Attornsy General

ROBERT GRAY
Special Assistant lfttorney(General

RICK GILPIN
Chairman, Opinion Committee

Prepared by Colin Carl
Assistant Attorney General




                                  p. 1883
