Legislative Proposal Calls for Property Owners to Withhold 3% of Payments to Contractors - Your Letters Needed The California Apartment Association in conjunction with a coalition of over 700 businesses and interest groups are working together to stop a legislative budget proposal that would require businesses to withhold 3 percent of payments owed to independent contractors.
Property owners and management companies would be required to implement the withholding to all independent contractors and self-employed individuals (small and large alike). Examples of operations that will see money withheld from payments to them include: builders, painters, plumbers, gardeners, janitors, real estate agents, insurance agents, computer programmers, accountants, automotive mechanics, and security guards.
In a year when the Governor and legislative leaders have indicated that "jobs, jobs, jobs" is a top priority, independent contractor withholding will hurt rather than help California jobs. The coalition’s opposition to independent contractor withholding is based on the following:
* Independent contractors already have a greater tax burden than employees;
* Withholding will wrongly force small businesses to loan money to the state, interest-free;
* Withholding could generate little if any new revenue for the state; and
* Withholding targets the wrong group of taxpayers - taxpayers who are already compliant.
These taxpayers already are providing the state information it can use to target independent contractors who aren't paying income taxes they owe. The proposal may be taken up as early as next Wednesday.
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