With the ink still drying on the governor’s signature making AB5 state law, Sacramento’s revenue collectors have started having meetings to figure out how to cash in on this latest opportunity to increase the Golden State’s tax take.
Leading the charge is State Controller Betty T. Yee, who doubles in brass as chair of California’s Franchise Tax Board (FTB) and the only statewide elected official serving on the Governor’s new Future of Work Commission. On October 1st Ms. Yee convened a first-of-its-kind public meeting of FTB to look at California’s gig economy and changing the tax landscape.
Experts in academia, business, and taxation – along with gig workers – met to discuss the rapidly changing nature of work and to address tax compliance issues that likely will arise. As of 2016, FTB staff reported, most gig workers did not receive any Form 1099 reporting income, more than one third did not keep adequate records of expenses and potential deductions, and 43 percent did not set aside enough income to meet their tax obligations.
“The very idea of what constitutes a workplace is evolving, and it is our job as the state’s tax authority to prepare for the challenges and opportunities the gig economy presents,” said Yee, the chief fiscal officer of the world’s fifth-largest economy. “Education and outreach will be critically important to helping workers and business owners navigate tax reporting and compliance. Technology can play a key role in helping workers and companies meet their requirements.”
Changing Nature of Work
The changing nature of work has been an ongoing area of focus for Controller Yee. She expressed her hope that this initial meeting would help experts identify the outstanding questions requiring further research and help fill the data gaps regarding the growing gig economy to support its continued strength.
One thing for sure, AB 5 is killing the stock price/perceived value of companies like Uber and Lyft. Each company has it’s own issues, but their stock values are plunging downward, in a line parallel to the activity around the controversial legislation.
By Dave Sorem, P.E., ECA Government Affairs Chairman, Email: [email protected]