Comments on: CA Independent Contractor Withholding – Where Do YOU Stand?

By: Elaine Starling

Elaine Starling — Thu, 18 Feb 2010 16:52:11 +0000

Jen,

Excellent post! I’ll share this with Women Impacting Public Policy too – http://www.wipp.org. This group of over 500,000 women nation-wide has many business owners that will be impacted by this kind of legislation. We definitely need to take an immediate stand to prevent taxes that make it hard for consultants and contractors to work in California.

By: Robin Pieracci

Robin Pieracci — Thu, 18 Feb 2010 03:38:50 +0000

Jen, thanks so much for bringing this to our attention and for the informative links!

By: Loreen Huddleston

Loreen Huddleston — Thu, 18 Feb 2010 02:54:32 +0000

Good information, Jen. I hope that this does not become law. But the State of CA is desparate to get our money earlier, rather than later, so it may happen. I will send a letter too.

By: Karilee Wirthlin

Karilee Wirthlin — Wed, 17 Feb 2010 23:34:25 +0000

This sounds like the way companies handle employees. We work so hard to make ourselves NOT employees in the eyes of our clients. While I wouldn’t say this is a primary reason to oppose this legislation, it will make lines blurry. I think it will give companies more reason to say, “Let’s just put you on a W-2 basis with our temp agency.”

By: Jen Berkley

Jen Berkley — Wed, 17 Feb 2010 21:01:54 +0000

Based on the fact sheet Avery posted, it’s likely that unincorporated S Corps will not have to withhold the 3%…not sure…regardless, I’m still opposed to having my $$ taken even earlier than already escalated by the state…

By: David Locke

David Locke — Wed, 17 Feb 2010 20:43:03 +0000

The law is not revenue neutral. Keep in mind that nobody gets a state income tax refund. Instead, they get a voucher, so the contractor will get a voucher while the state plays with money that the state would have never received. You can thank the Gov for this.

By: Avery Horzewski

Avery Horzewski — Wed, 17 Feb 2010 19:14:11 +0000

Here’s a fact sheet that I found on calchamber.com: http://www.calchamber.com/Grassroots/Documents/IndependentContractorFactSheet.pdf.

By: Linda Popky

Linda Popky — Wed, 17 Feb 2010 18:41:10 +0000

This is definitely not good news. Does anyone know how this would impact consultants who are incorporated?

If corporations are not covered under this rule, it might be a great time to think about incorporating your business.

Linda

By: Avery Horzewski

Avery Horzewski — Wed, 17 Feb 2010 18:30:03 +0000

Jen, this just makes my blood boil–so much so, it’s melting the snow here in Sequoia! It’s going to cost contractors jobs, because there will be companies who won’t want the added burden of tracking this withholding. And it’s incredibly shortsighted, too. It’s not going to give CA any more tax revenue. It’s essentially just asking small businesses to float them an interest-free loan.

I found a good article on calchamber.com that gives a good overview of what is being proposed and the impact, adding to what you listed in your post: http://www.calchamber.com/headlines/pages/fastgrowingcoalitionopposingindependentcontractorwithholding.aspx.

Since I incorporated this past year, I won’t have to suffer the withholding, but I will have to do the withholding on all my subs, track it, submit it, and pay my accountant to help with all that–most likely even employ my payroll firm to help process these payments. What a pain.

Thanks for letting us know!

By: Deb McClanahan

Deb McClanahan — Wed, 17 Feb 2010 18:23:20 +0000

Jen, Thanks for making us aware of this in time to be proactive. I had heard that this might be afoot, but didn’t know it
had made it to legislation.