CA Ditches Three Per Cent Withholding Proposal
For the second time in the past year, the California Association of Realtors (C.A.R.) has headed off another state attempt to double tax its members, most of whom are independent contractors. The legislation would have required employing real estate brokers to deduct three per cent of each licensee’s commission payment and send this to the state.
This is not only an onerous and time-consuming proposition for brokers, it is double taxation on agents because they still would be responsible for paying quarterly estimated income taxes to the state. Those who advocate this plan say that independent contractors could apply in April to receive refunds for the withholdings, but there is no guarantee the state will actually have the money to do so.
Withdrawal of the Senate Budget Committee proposal is good news, but this may be only temporary. The concept is likely to resurface yet again later this year.