No Taxation Without Operation Act
No Taxation Without Operation Act
Plain Language Summary
# No Taxation Without Operation Act Summary **What It Would Do:** This bill would suspend federal income tax collection on wages during government shutdowns caused by lapses in appropriations (when Congress fails to approve a budget). If passed, workers wouldn't owe federal income taxes on their wages during the shutdown period, and the government couldn't charge them penalties or interest for unpaid taxes. The bill also exempts "back pay" (wages owed but not received) from federal income taxes when federal employees and contractors finally receive those delayed paychecks after a shutdown ends. **Who It Affects:** This would benefit wage-earning workers, hourly employees, salaried workers, and tipped employees during shutdown periods.
Federal employees and contractors who miss paychecks would also get tax relief when back pay is distributed. The Treasury Department would need to provide guidelines to employers on how to implement the tax suspension across different types of workers. **Current Status:** The bill (HR 5695) was introduced by Representative Robert P. Bresnahan (R-PA) in the 119th Congress and is currently in committee, meaning it has not yet been debated or voted on by the full House of Representatives.
CRS Official Summary
No Taxation Without Operation ActThis bill suspends the collection of certain federal income taxes during a partial or full government shutdown that occurs due to a lapse in appropriations.If a partial or full government shutdown occurs, the bill provides that no citizen who is subject to ordinary federal income taxes on wages is liable for (1) federal income taxes during the shutdown, or (2) the accrual of any penalty or interest with respect to any federal individual income tax payment or any federal individual income tax return.The bill also exempts back pay from federal income taxes if it is received by certain federal employees or contractors who were not paid during a government shutdown and are subject to the Government Employee Fair Treatment Act of 2019. The Department of the Treasury must issue guidelines for employers to ensure compliance with this bill for tipped, hourly wage, salaried, and all other covered employees.
Latest Action
Referred to the House Committee on Ways and Means.