SACRAMENTO, CA - As the state legislature scrambles to close a $20 billion deficit, many proposals are being floated to accomplish this, including a tax on independent contractors.  And to stop this from happening, CAWA has joined a business coalition with over 600 members strong that oppose independent contractor withholding.

Independent contractors are self employed people and businesses ranging from small enterprises to large companies, such as automotive technicians.  They already pay more types of taxes than employees, including self-employment and local business taxes.  In addition they pay income taxes in quarterly estimated payments and face penalties for not paying or underpaying. 

This proposal would force companies hiring these independent contractors to withhold 3 percent of their pay, essentially making these companies government tax collectors and with that assuming new expenses for processing collections and reporting to the state.  For businesses, there is nothing good here.  Companies might cut back hiring contractors, and contractors would have less on hand to expand and operate. 

CAWA's government relations team will continue to monitor this budget proposal and work with other business organizations to oppose the independent contractor withholding.

For more information contact Jennifer Zins, CAWA's Director of Government Affairs at 916-871-0603 or Jennifer@pzallc.com.

Founded in 1955, CAWA is a nonprofit trade organization representing automotive jobbers, warehouse distributors, retailers, manufacturers and manufacturers' representatives in California, Nevada, and Arizona.  CAWA's mission is to provide communications, education, legislative and regulatory advocacy and group purchasing of services for its members while promoting the automotive aftermarket industry.

For additional information about CAWA and for the latest industry news, go to www.cawa.org.