H.R. 5695: No Taxation Without Operation Act

This legislation, titled the "No Taxation Without Operation Act," proposes a temporary suspension of federal individual income taxes during periods when the federal government experiences a shutdown due to a lapse in appropriations. Here is a breakdown of the key components of the bill:

Suspension of Federal Income Taxes

• During any partial or full government shutdown, citizens who are subject to federal income tax on their wages would not be required to pay income taxes.
• No penalties or interest would accrue for unpaid federal individual income taxes during the shutdown period.
• Federal employees and contractors who are furloughed or working without pay during a shutdown would not have their back pay subject to federal income taxes.
• The U.S. Treasury Department would be responsible for issuing guidelines to ensure that employers comply with this tax suspension for various categories of employees—this includes tipped employees, hourly wage earners, and salaried employees.

Definition of Government Shutdown

• The term "partial or full government shutdown" refers to any period in which a lapse in federal appropriations occurs, leading to government services being suspended or significantly reduced.

Overall Purpose

The main objective of this bill is to ease the financial burden on citizens and federal employees during periods of government shutdown, ensuring that they do not face tax liabilities for income earned during such times when the government is not functioning normally.

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