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Independent Contractors (Realtors) targeted to make Interest Free Loans to California

By
Real Estate Agent with COMPASS DRE# 01339266

The California Legislature is proposing that those making payments to Independent Contractors (and this includes Realtors) withhold 3% to help close the budget gap facing the financially troubled State.

Independent Contractors are being singled out to carry the burden of the State's financial difficulties. This is simply outrageous and must not be allowed to pass.

I was encouraged to see that C.A.R. (The California Association of Realtors) is actively opposing this move and recommending that all members contact their Democratic legislators to voice their opposition to this proposal.

In effect, Independent Contractors would be making loans of 3% of their earnings to the State and would only be refunded after filing their taxes in the next tax year.

In view of California's current financial predicament of needing to issue IOU's instead of checks as tax refunds, what guarantee would Independent Contractors have that they could cash the IOU's when eventually received?

Governor Schwarzenegger needs a clear message from all Realtors that this is simply unacceptable!

Comments(9)

Gene Riemenschneider
Home Point Real Estate - Brentwood, CA
Turning Houses into Homes

Worse yet they will probably pay it back in the form a voucher.  I have been wondering if I could buy a voucher from someone to pay my taxes.

Jul 13, 2009 05:46 AM
Sabrina Solesbee
Solesbee Group - Laguna Beach, CA
Sabrina Solesbee

Gene,  that's a great idea! Let me know if where to buy that voucher!!!

Jul 13, 2009 05:48 AM
Claude Cross
Homes By Cross, Inc. - Charlotte, NC
Charlotte NC Homes For Sale

If you were to have withholdings from payment. Would not that make independants Employees?

Jul 13, 2009 05:48 AM
Sam DeBord
SeattleHome.com -Coldwell Banker Danforth - Seattle, WA
Seattle Real Estate Broker

Forget the governor, he only has veto power.  The legislature creates these laws and budgets.  The CAR is right to ask Realtors to call your legislators, as they're the ones writing and voting for these measures.

Great post, it's scary what government can pass if we don't pay attention.

Jul 13, 2009 07:00 AM
Charles Stallions
Charles Stallions Real Estate Services - Pensacola, FL
850-476-4494 - Pensacola, Pace or Gulf Breeze, Fl.

What so wrong with that? We Democrats are thinking out side the box. We need to get California to go the way of the country, prosperity for everyone not just the working people. We have to Caleeefornia back on track some how and why not let the big money makers like Realtors pay for it, Right.

Jul 13, 2009 07:03 AM
Karen Fiddler, Broker/Owner
Karen Parsons-Fiddler, Broker 949-510-2395 - Mission Viejo, CA
Orange County & Lake Arrowhead, CA (949)510-2395

Wow Charles.....I hope you are kidding! We are paying for everything...mostly for those who aren't even here legally. How about we start charging them for a few things...and we are the highest taxed people in the country. I'm very tired of hearing that I should pay my fair share..I pay my share and probably several other's shares too.

Jul 13, 2009 10:05 AM
Mark MacKenzie
Phoenix, AZ

Wow.  That is an interesting concept - one that doesn't seem to make much sense to me.

What is frustrating is that the government continues to want to raise taxes rather than actually cut spending.

Jul 13, 2009 12:20 PM
Kathy Toth
Ann Arbor Market Center Keller Williams - Ann Arbor, MI
Ann Arbor Real Estate Experts - Kathy Toth Team

I suggest those of you in California keep in mind what happened to the bond holders in the Auto Bailout. Their IOUs were apparently worth so much less than the political favors owed the labor unions,.

Jul 13, 2009 01:22 PM
Cathy McAlister
Cathy Ashley McAlister, GRI CDPE - Broker / Sacramento - Sacramento, CA
Sacramento DRE#00648507

Stewart,

Unfortunately, I think they will get this passed.  It is very similar to Cal-Frpta (California's version of FRPTA) - when first introduced it targeted non-resident investors than was modified to include resident investors.    We fought that one too.  In fact most other states implemented their own withholding program after California.   You are correct, it is a -0- interest loan.  Over time we may come to view it as a necessary evil that functions like an impound account.

Jul 13, 2009 04:30 PM