Posted by JanetK_CA on 6/24/09 1:06am
Msg #293334

independent contractor - crazy law being considered in CA

I got an email from a pretty reliable source saying that some in the CA legislature are now considering a law to require income tax withholding for payments to independent contractors! I don't know if this is geared to specific types or if it is across the board, but it doesn't make any sense to me regardless.

The state is in desperate enough financial straits that they just might try to do something this insane. I realize this would be an attempt to get more of our money sooner, but we are already required to pay estimated tax quarterly. I can't see this as anything but unworkable. How in the world could all the different people that hire independent contractors of all stripes possibly know what to withhold - or even be counted on to do it properly! It's bad enough that we often don't get paid at all, but can you imagine what a nightmare this would be?

Apparently these are the key people to contact to express an opinion on this:

Assemblymember Karen Bass, Speaker
Phone: 916-319-2047
Email: [e-mail address]

Senator Darrell Steinberg, President pro Tempore
Phone: 916-651-4006
EMail: [e-mail address]

Governor Arnold Schwarzenegger
Phone: 916-445-2841

I'm told that THE VOTE ON THIS COULD COME AS EARLY AS TOMORROW (Wednesday). No other state requires this. Please let your voices be heard on this as soon as possible!!!

Reply by Shoshana Roller on 6/24/09 9:04am
Msg #293352

It's likely that they would be required to get income tax withholding tables. Is this just for state tax? I can jujst imagine hiring someone like a carpenter or an independent cleaning person.
My condolences. Just one of the reasons I left CA for the wild, wild West! We have a budget crisis of our own!

Reply by rengel/CA on 6/24/09 9:13am
Msg #293355

Do you have a bill number? I have searched the bills and can't find anything about this. More information would be appreciated.

Reply by A S Johnson on 6/24/09 9:26am
Msg #293359

3 points:
1) Have will those "little" SS servive the increase paperwork? I see more SS opening in Fl and TX.
2) What happens if those taxes that ahve been with held are not forwardwd to the state? Will it be like the federal IRS taxes that are withheld and not forwarded, the independent contractor will still be responsibile, thus we get hit twice?
3) If the SS is a CA business, will they with hold those taxes from us they employ outside of CA and we will need to fill for a refund from the State of CA.

Where is XYZ on this as they are a for profit CA company with CA thier main interest but wants us to reconize them as a "national" operation with our interest at heart? LOL!!!!

Reply by MW/VA on 6/24/09 1:33pm
Msg #293402

No wonder CA is broke. IMO, it seems they spend all their time dreaming up new laws.

Reply by Glenn Strickler on 6/24/09 1:54pm
Msg #293405

There is no bill number, it is part of the budget process ..

Changes to the budget during the process do not have a bill number. The budget is one big bill number.

The legislators and governator are going through everything to see what they can change by executive order or what power the Franchise Tax Board has to make rules on it's own without any legislative action. As for Steinberg and Bass, they are looking for more taxes, and the only spending they are looking to cut is the spending that will hurt the average citizen the most in an attempt to convince us to approve more taxes.

That's why I haven't been posting much or being available for loan signings the past couple of weeks, as I have become involved with an anti-tax group lobbying up in Sacramento. I was going to just leave the state, but I was born, raised and lived my life here with the exeception of my military time. I decided to stay and fight. And I swore I would never get involved in politics ......

Reply by JanetK_CA on 6/24/09 6:21pm
Msg #293450

Re: There is no bill number, it is part of the budget process ..

Good for you! And thanks, on behalf of the rest of us.

I shot off an email last night mentioning several of the concerns listed in other posts above. I wish I had more information about this, but I don't. I had it forwarded to me from another organization that IS actively fighting this with lawyers and lobbyists, but they aren't related to our business and will likely only be promoting their own interests, rather than that of all independent contractors.

Let's hope this crazy idea dies a quick death. But they're desperate enough that I think they might try anything to keep the state in business for whatever additional margin they can squeeze out.