03/04/2010 WECA-IEC Opposes New Bill Giving Tax Board Ability to Suspend License of Contractors Owing taxes
WECA-IEC has joined a broad coalition of professions licensed by the State in opposing an effort to give the Franchise Tax Board (FTB) broad authority to suspend a license, including a contractor’s license, for failure to pay taxes. Existing law permits the Contractors State License Board (CSLB) to suspend or deny renewal or a license if notified by the FTB, but the FTB wants to bypass the individual licensure boards and be permitted to revoke a professional practice license when taxes are owed.
WECA-IEC opposes the bill, in part because the proponents of the plan could not explain how a contractor with an outstanding tax obligation could pay if they couldn’t work in construction. The coalition has proposed amendments to counter the argument that license boards ignore tax claims. The proposal is part of this year’s budget package and may be amended into several of the budget bills being considered by the Legislature.
WECA-IEC has joined a similar coalition of more than 1,000 business and professional societies in opposing a mandate that anyone employing a non-corporate independent contractor withhold 3% of any payments and remit these amounts to the State. The 3% is credited against the final tax obligation of the contractor but if it results in overpayment of estimated taxes, it becomes an “interest free” loan to the State and, if California financial problems continue, could be refunded with an IOU. Contractors would also be required to withhold 3% of payments to their subs. Like the license suspension bill, this idea is part of the budget package being considered by the State Legislature.
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