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The Fight is Not Over, says SPEC
California Legislature Considering 3% Withholding of Fees Paid to Independent Contractors
“The spa and pool industry needs to actively engage and add its voice in opposition to this dangerous proposal or be hard pressed to complain about the costs and consequences,” says John Norwood
Sacramento, Calif. /February 12, 2010 –
The California State Legislature is considering a proposal that would mandate a 3% withholding of fees paid to independent contractors. The Senate Budget & Fiscal Review Committee met Thursday afternoon (Feb. 11th) to consider this proposal; however, the proposal was not voted upon after concerns were raised by opposition groups.
THIS FIGHT IS NOT OVER. Deliberations on this issue will continue next week as the Legislature considers all measures intended to help close the state’s budget gap.
We need to keep opposition up and the letters, emails and calls coming! Our grassroots efforts are starting to have an effect! “Small business organizations throughout California are now aware and are responding to this proposal and are beginning to flood the state capitol with phone calls, faxes and emails in opposition,” said John A. Norwood, President of SPEC. “The spa and pool industry needs to actively engage and add its voice in opposition to this dangerous proposal or be hard pressed to complain about the costs and consequences,” he emphasized.
SPEC is requesting that its members immediately contact their state legislators to voice opposition to this ill conceived proposal. The California Chamber of Commerce, along with some 600 organizations, is also implementing an all out campaign to oppose this flawed idea.
Such a proposal only robs working capital from law abiding independent contractors and further forces people into the underground economy. The pool and spa industry is in a perfect position to mount a campaign to oppose this proposal. Pool service professionals live and work in every legislative district in California.
Below is a sample letter SPEC has prepared for industry professionals that can be personalized and used to fax or e-mail immediately to their legislators in opposition to this proposal. DON’T WAIT – send it now! SPEC members can determine the Assembly member and Senator(s) representing their district by visiting http://www.leginfo.ca.gov/yourleg.html, and entering the zip code of your place of business or residence. From there, you will be presented with the link to each legislator’s website, where you can either cut and paste the personalized sample letter and e-mail, or obtain the fax or mailing address. Calls to both the legislator’s district office and Capitol offices are also strongly encouraged.
About SPEC
SPEC, the California Spa and Pool Industry Education Council, serves as the statewide public policy representative for the pool and spa industry. We advocate on behalf of industry interests before the California Legislature and state and local regulatory agencies, and for individual members dealing with enforcement issues. Working daily on the industry’s behalf, we have an unmatched track record in successfully negotiating and fighting against unreasonable and costly legislation and for enforcement of unlicensed contractor laws. SPEC promotes the highest standards of professional conduct in pool construction, service and repair, and seeks to educate the public on the proper maintenance and safe use of swimming pools and spas/hot tubs. For over 40 years, SPEC has been the only organization registered to lobby at the State Capitol on behalf of the pool and spa industry. SPEC is funded by membership donations. For more information on SPEC and legislation we are watching, visit www.calspec.org, or call 916-447-4113.
SAMPLE LETTER OPPOSING INDEPENDENT CONTRACTOR WITHHOLDING PROPOSAL
[DATE]
Dear Assembly Member / Senator _____:
I am a small business owner in your district. My company, _____, employs ____ persons. We have been in business in ______ since ____.
I am writing to oppose the independent contractor withholding proposal. This is another budget gimmick that does not generate more revenue to the State of California. Instead, it merely accelerates monies that will already be paid to the State and imposes an onerous burden upon small businesses like my company.
Under this proposal, businesses in this state would be required to collect taxes from other businesses and we would serve as a collection agent for the State. The new expense of withholding and remitting these monies to the Franchise Tax Board would be a cost borne by small businesses, effectively providing interest-free loans to the state. Even if we, as independent contractor, owes no state taxes, 3% would still be withheld, affecting our cash flow and impacting our business.
In an already difficult time for many businesses, including the hard hit swimming pool and spa industry of which I am a member, this proposal adds one more burden that could push us over the edge.
I believe this proposal is unreasonable and should be rejected by the Legislature. I would appreciate hearing from you at your earliest convenience as to your position on this ill-conceived proposal.
Sincerely,
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