Red Flag No Business License!

 Napa cracks down on local business owners in the spa and salon industry resulting in a small tax dollar windfall for the city coffers.  In April 2008 seven salon owners were fined for worker misclassification violations and for non payment of employer taxes. Although the dollars collected may seem insignificant to a large employer the pursuit, poor publicity, fines and penalties are pretty much the same. More often than not you read about big companies tagged for a myriad of offenses and the enormous payouts for these violations. All too often the small guy who colors outside the lines goes undetected. Client companies or would be employers who benefit from these illegal operations remain off the radar with no accountability.

These desperate times call for desperate measures and Livermore city watchdogs are no exception. Local officials and the IRS teamed up to tag home based independent contractors and other small business owners for unpaid business licensure fees. It’s no secret the state, federal and local governments are operating in the red and not likely to miss an opportunity to add a few dollars to empty collection plates. The size of the reward must be worth the chase if authorities were willing to wade through reams of tax data and other countless pieces of paper. If the tax man put forth this much effort to bring in nominal fees what lengths will they go to collect from large benefactors of this underground workforce?

So the next time that independent contractor you hired says “I don’t need a business license” stop!  Don’t just take a claim of exemption check it out!