UPDATE: Gov. Schwarzenegger Vetoes Independent Contractor Tax Withholding

As we reported previously, the state Budget Conference Committee had agreed to a budget gap proposal that included a provision forcing anyone that makes payments to independent contractors (including property managers and owners) to withhold 3% of those funds paid in excess of $600 per year, and send the money to the California Franchise Tax Board.

UPDATE! The proposal was vetoed by Gov. Arnold Schwarzenegger last night. In his veto letter, the Governor stated that:

[T]he Legislature must solve the entire deficit, must make the hard decisions now, and must not push the problem off until tomorrow. This [proposal]...did not meet any of those criteria.

BOMA California is keeping up their lobbying efforts in Sacramento as the veto was based upon a partial solution to California's budget deficit rather than a long-term fix of the State's perennial budget woes. In addition, since our state leaders did not pass a stop-gap budget last night, California is now an extra $3 billion in the hole, so there is even more pressure for needed revenues.

Additionally, last night, the withholding mandates appeared in several other proposals, which shows that this issue continues to be a moving target.

In short, the saliency of this issue for future budget discussions is still conspicuously high. As such, please consider sending this UPDATED letter of opposition to your state legislator to inform them of what a bad idea this. Click here to find your California State Legislative Representatives or reference this list:

Senator Leland Yee (San Francisco/San Mateo)
Fax: (916) 327-2186
Email: senator.yee@sen.ca.gov

Senator Mark Leno (San Francisco)
Fax: (916) 445-4722
Email: senator.leno@sen.ca.gov

Assemblymember Fiona Ma (San Francisco)
Fax: (916) 319-2112
Email: fiona.ma@asm.ca.gov

Assemblymember Tom Ammiano (San Francisco)
Fax: (916) 319-2113
Email: tom.ammiano@asm.ca.gov

Assemblymember Jared Huffman (Marin/Sonoma)
Fax: (916) 319-2006
Email: jared.huffman@asm.ca.gov

Assemblymember Jerry Hill (San Mateo)
Fax: (916) 319-2119
Email: jerry.hill@asm.ca.gov