5 U.S.C. § 5517

Withholding State income taxes

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(a) When a State statute—(1) provides for the collection of a tax either by imposing on employers generally the duty of withholding sums from the pay of employees and making returns of the sums to the State, or by granting to employers generally the authority to withhold sums from the pay of employees if any employee voluntarily elects to have such sums withheld; and(2) imposes the duty or grants the authority to withhold generally with respect to the pay of employees who are residents of the State;the Secretary of the Treasury, under regulations prescribed by the President, shall enter into an agreement with the State within 120 days of a request for agreement from the proper State official. The agreement shall provide that the head of each agency of the United States shall comply with the requirements of the State withholding statute in the case of employees of the agency who are subject to the tax and whose regular place of Federal employment is within the State with which the agreement is made. In the case of pay for service as a member of the armed forces, the preceding sentence shall be applied by substituting “who are residents of the State with which the agreement is made” for “whose regular place of Federal employment is within the State with which the agreement is made”.(b) This section does not give the consent of the United States to the application of a statute which imposes more burdensome requirements on the United States than on other employers, or which subjects the United States or its employees to a penalty or liability because of this section. An agency of the United States may not accept pay from a State for services performed in withholding State income taxes from the pay of the employees of the agency.(c) For the purpose of this section, “State” means a State, territory, possession, or commonwealth of the United States.(d) For the purpose of this section and sections 5516 and 5520, the terms “serve as a member of the armed forces” and “service as a member of the Armed Forces” include—(1) participation in exercises or the performance of duty under section 502 of title 32, United States Code, by a member of the National Guard; and(2) participation in scheduled drills or training periods, or service on active duty for training, under section 10147 of title 10, United States Code, by a member of the Ready Reserve.(Pub. L. 89–554, Sept. 6, 1966, 80 Stat. 478; Pub. L. 94–455, title XII, § 1207(a)(1), (b), (c), Oct. 4, 1976, 90 Stat. 1704, 1705; Pub. L. 100–180, div. A, title V, § 505(1), Dec. 4, 1987, 101 Stat. 1086; Pub. L. 103–337, div. A, title XVI, § 1677(a)(1), Oct. 5, 1994, 108 Stat. 3019; Pub. L. 105–34, title XIV, § 1462(a), Aug. 5, 1997, 111 Stat. 1057.)

Historical and Revision Notes
Derivation	U.S. Code	Revised Statutes and Statutes at Large
	5 U.S.C. 84b.	July 17, 1952, ch. 940, § 1, 66 Stat. 765.
		Sept. 23, 1959, Pub. L. 86–371 “Sec. 1”, 73 Stat. 653.
	5 U.S.C. 84c.	July 17, 1952, ch. 940, § 2, 66 Stat. 766.
		Sept. 23, 1959, Pub. L. 86–371 “Sec. 2”, 73 Stat. 653.

In subsection (b), the words “after March 31, 1959” are omitted as executed.

Standard changes are made to conform with the definitions applicable and the style of this title as outlined in the preface to the report.

Editorial NotesAmendments

1997—Subsec. (c). Pub. L. 105–34 substituted “, territory, possession, or commonwealth” for “or territory or possession”.

1994—Subsec. (d)(2). Pub. L. 103–337 substituted “section 10147” for “section 270(a)”.

1987—Subsec. (d). Pub. L. 100–180 struck out “do not” before “include”.

1976—Subsec. (a). Pub. L. 94–455, § 1207(a)(1), (c), inserted in par. (1) provision relating to the grant to employers of the authority to withhold sums from the pay of employees if any employee voluntarily elects to have such sums withheld, inserted in par. (2) “or grants the authority” after “imposes the duty”, and substituted in text following par. (2) provisions that in the case of pay for service as a member of the armed forces, the preceding sentence shall be applied by substituting “who are residents of the State with which the agreement is made” for “whose regular place of Federal employment is within the State with which the agreement is made” for provision that the agreement may not apply to pay for service as a member of the armed forces.

Subsec. (d). Pub. L. 94–455, § 1207(b), added subsec. (d).

Statutory Notes and Related SubsidiariesEffective Date of 1997 Amendment

Section 1462(b) of Pub. L. 105–34 provided that: “The amendment made by subsection (a) [amending this section] shall take effect on January 1, 1998.”

Effective Date of 1994 Amendment

Amendment by Pub. L. 103–337 effective Dec. 1, 1994, except as otherwise provided, see section 1691 of Pub. L. 103–337, set out as an Effective Date note under section 10001 of Title 10, Armed Forces.

Effective Date of 1976 Amendment

Amendment by section 1207(a)(1) of Pub. L. 94–455 applicable to wages withheld after the 120-day period following any request for an agreement after Oct. 4, 1976, see section 1207(f)(1) of Pub. L. 94–455, set out as a note under section 5516 of this title.

Pub. L. 94–455, title XII, § 1207(f)(2), Oct. 4, 1976, 90 Stat. 1708, provided that: “The amendments made by subsections (b) and (c) [amending this section] shall apply to wages withheld after the 120-day period following the date of the enactment of this Act [Oct. 4, 1976].”

Executive DocumentsExecutive Order No. 10407

Ex. Ord. No. 10407, Nov. 7, 1952, 17 F.R. 10132, which related to regulations governing agreements concerning withholding of state or territorial income taxes, was revoked by Ex. Ord. No. 11968, Jan. 31, 1977, 42 F.R. 6787, formerly set out as a note under section 5520 of this title.

Notes of Decisions

Cited in 15 cases (1 in the last 5 years), 1973–2024 · leading case: Franchise Tax Bd. v. United States Postal Serv., 467 U.S. 512 (1984).

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Franchise Tax Bd. v. United States Postal Serv., 467 U.S. 512 (1984). · cites it 3× “It held that 5 U. S. C. §5517 , which authorized the agreement that California and the United States had made regarding the withholding of state income taxes from the pay of federal employees, applies only to withholding of anticipated tax liabilities and not to *515 delinquent…”

Romero v. United States, 38 F.3d 1204 (Fed. Cir. 1994). · cites it 14× “Under 5 U.S.C. § 5517 (1988), the Secretary of the Treasury is authorized to enter into an agreement with a “State” to withhold State income tax from the pay of federal employees subject to the tax.”

Emp. Dev. Dep't v. United States Postal Serv., Franchise Tax Bd. v. United States Postal Serv., 698 F.2d 1029 (9th Cir. 1983). · cites it 8× “The district court held in granting summary judgment for the Postal Service that, first, state law does not authorize such levies against federal agencies, and second, the Postal Service cannot be required to collect delinquent California tax liabilities of its employees because…”

Adams v. United States, 48 Fed. Cl. 602 (Fed. Cl. 2001). · cites it 2× “Plaintiffs sought to recover money withheld pursuant to what they alleged, and the court eventually held, was an unlawful income tax withholding agreement entered into by the Secretary of the Treasury and the Commonwealth of Puerto Rico under 5 U.S.C. § 5517 (1994 & Supp.1999).…”

City of S.F. v. Regents of the Univ. of Cal., 442 P.3d 671 (Cal. 2019). “Code, § 7204 [authorizing the State Board of Equalization to remit sales and use taxes collected on behalf of local governments] ), here no such agreement has been reached.”

City & Cnty. of San Francisco v. Regents of the Univ. of California, 11 Cal. App. 5th 1107 (Cal. Ct. App. 2017). · cites it 2× “, 5 U.S.C. §§ 5517 , 5520 31 [authorizing Secretary of the Treasury to enter into tax withholding agreements for state and local taxes].”

Donald Knight & Foster Pepper & Shefelman, a Law P'ship, Plaintiffs/cross-Appellants v. The United States of Am., 982 F.2d 1573 (Fed. Cir. 1993). “§ 659 (1988) (honoring legal process brought for enforcement of child support or alimony obligations against federal salaries); 5 U.S.C. §§ 5517 , 5520 (1988) (authorizing withholding of state and local taxes).”

Romero v. Brady, 764 F. Supp. 227 (D.P.R. 1991). · cites it 2× “5 U.S.C. § 5517 . Plaintiffs’ first line of attack is to argue that Puerto Rico is not included within the definition of “State”.”

Lung v. O'Cheskey, 358 F. Supp. 928 (D.N.M. 1973). · cites it 3× “) in concert with state officials, that they are acting ultra vires of any authority conferred by 5 U.S.C. § 5517 in withholding New Mexico state income taxes from plaintiffs’ pay pursuant to an agreement authorized by that section, and that if they are not acting ultra vires,…”

Clincher v. United States, 205 Ct. Cl. 8 (Ct. Cl. 1974). “*13 Tlie United States withholds state income taxes from its employees as a result of contracts entered into with states pursuant to 5 U.S.C. § 5517 . In relevant part that statute provides as follows: § 5517.”

Hammack v. N.M. Taxation & Revenue Dep't (N.M. Ct. App. 2017). · cites it 8× “Taxpayers rely on 5 U.S.C. § 5517 (a) (2012), 9 1 which provides for withholding of state income tax from a federal employee’s wages 2 where (1) an employee is subject to the tax and the employee’s place of federal 3 employment is within the state, or (2) where the employee is a…”

City & Cnty. of S.F. v. The Regents of the Univ. of Cal. (Cal. 2019). “, 5 U.S.C. § 5517 [authorizing federal employers to withhold state income taxes]; Rev.”

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