Bill H.B. 311
This bill would provide that, for purposes of local business taxes, “employee” does not include an independent contractor who is not engaged in the construction industry and in order to meet the definition of independent contractor at least four of the following criteria must be met:
(I) The independent contractor maintains a separate business with his or her own work facility, truck, equipment, materials, or similar accommodations;
(II) The independent contractor holds or has applied for a Federal Employer Identification Number, unless the independent contractor is a sole proprietor who is not required to obtain a Federal Employer Identification Number under state or federal regulations;
(III) The independent contractor receives compensation for services rendered or work performed and such compensation is paid to a business rather than to an individual;
(IV) The independent contractor holds one or more bank accounts in the name of the business entity for purposes of paying business expenses or other expenses related to services rendered or work performed for compensation;
(V) The independent contractor performs work or is able to perform work for any entity in addition to or besides the employer at his or her own election without the necessity of completing an employment application or process; or
(VI) The independent contractor receives compensation for work or services rendered on a competitive-bid basis or completion of a task or a set of tasks as defined by a contractual agreement, unless such contractual agreement expressly states that an employment relationship exists.
If four of the criteria listed above do not exist, an individual may still be presumed to be an independent contractor and not an employee based on full consideration of the nature of the individual situation with regard to satisfying any of the following conditions:
(I) The independent contractor performs or agrees to perform specific services or work for a specific amount of money and controls the means of performing the services or work.
(II) The independent contractor incurs the principal expenses related to the service or work that he or she performs or agrees to perform.
(III)Â The independent contractor is responsible for the satisfactory completion of the work or services that he or she performs or agrees to perform.
(IV) The independent contractor receives compensation for work or services performed for a commission or on a per-job basis and not on any other basis.
(V) The independent contractor may realize a profit or suffer a loss in connection with performing work or services.
(VI) The independent contractor has continuing or recurring business liabilities or obligations.
(VII) The success or failure of the independent contractor’s business depends on the relationship of business receipts to expenditures.
