In February, California legislators considered a proposal that would have mandated a 3 percent withholding of fees paid to independent contractors. But the proposal has since been placed on hold, much to the delight of Insurance Brokers and Agents of the West (IBA West) members.
Under the proposal, businesses in the state would have been required to withhold 3 percent of payments to independent contractors, who now pay their state income taxes only in quarterly installments. If it had passed, the proposal is predicted to have generated $1.7 billion in revenue. The withholding requirement would have affected businesses such as painters, plumbers, mechanics and landscapers, as well as professionals who derive their incomes from contracting out their services, such as insurance agents, attorneys, doctors, real estate agents, architects and entertainers.
According to the Cal Chamber of Commerce, the proposal was an “onerous, never-ending mandate” that would have affected more than 1 million businesses and agencies for a “one-time money-grab.”
“Small businesses would have effectively been providing interest-free loans to the state,” IBA West said.
Topics California Agencies Contractors
Was this article valuable?
Here are more articles you may enjoy.
AI Models May Soon Self-Replicate Across Smart-Home Devices, Anthropic Warns 
Industry Reacts to Senators’ Letter for Claims Data and Recent Reports 
California Workers’ Comp Combined Ratio Highest in More Than 20 Years 
‘Unusual’ Isaias Brings Winds, Downed Trees But Fewer Claims Than Expected From This Issue
