California Wants to Tax YOU – SB 17

If you are an independent distributor whose parent company is in California, please pay attention.  If you think that you just lucked out, still pay attention.  One of the last, best, tax breaks for average Americans is about to be wiped out.

The State Assembly of California just passed S.B. 17 which will require anyone doing business with an independent contractor (that’s you) to withhold 3% of your bonus check.  That’s right.  The State of California
will get paid before you do.  Even if you live in Virginia, Ohio, or Texas, but your network marketing company has its headquarters in California.  Yes, even if you never owe taxes because of your deductions, you will still have 3% withheld.

If you are thinking, “well, 3% isn’t so bad”, check your history.  The first income tax was just 5%.  Where are we now?  Once the door is open, it will not be closed. This is a serious issue for all network marketers.

California is the state that is issuing I.O.U.s for tax refunds because it has no money.  So now it wants to tax everyone it can, rather than stop educating  illegal aliens for free, and giving free medical care to illegal aliens.  Your rights as an American Citizen, and as an independent contractor/business owner are being affected.

If you think, that you dodged a bullet because your company is in Utah, and you live in Maryland, think again.  Tax and legal precedents cross state lines.  The Federal government is scrambling for money to pay for their new “reforms”, bailouts, and stimulus packages. How soon will they be following in California’s footsteps?  I figure within 12 months many states will be considering this kind of  legislation.

WHAT YOU CAN DO NOW:

1) Join a Tea Party in your locality.  Google Tea Party, or visit: Tea Party Patriots.  If you live in Virginia,
go to our state site: Virginia Tea Party.  Get active to fight taxes on every level.

2) Write the legislators in California. A sample letter appears below. If you live outside the state, you will have to submit it by mail.

3) Contact your company. Ask what they are doing to fight this.  If they are not taking action on your behalf, then demand that they do so.

Some sites suggest that you just rejoin your company under a different address.  That may be true in some affiliate companies, but impossible in most network marketing companies, and put you at risk of losing your downline.

Your communication will be most effective if you use your own words.

Contact info for the CA Governor and Senate President appears below.

Governor Arnold Schwarzenegger
State Capitol Building
Sacramento, CA 95814
Phone: 916-445-2841
Fax: 916-558-3160

The following is Senate President Pro tem Darrell Steinberg’s contact information:
Senate President Pro tem Darrell Steinberg
State Capitol, Room 205
Sacramento, CA 95814

SAMPLE LETTER:

Dear [ ]:

Unfortunately, once again, the California Legislature is considering an Independent Contractor withholding proposal, which would place a HUGE burden on my family business.

[Tell your personal story in your own words]
I have been an Independent Contractor for more than [Insert the number] years. Originally, I became an IC because [fill in reason].  Now my family depends on this extra income to cover our cost of living in California. (OR, even though I am not a resident, I will be affected because my company is in California.  This is decidedly unfair to me, and thousands like me).

I am not opposed to paying my share of taxes, but it makes no sense to me to send the State my money, and then have the State send it back a year later to me when I file my tax returns.

I need every dollar I make to run my business. I have to pay my business expenses from the income I earn. While I, of course, support the need to pay taxes, withholding up-front on taxes I may never really owe, will cause severe,
and unnecessary, cash flow problems for my small home-based business.

Making a living at my business is already difficult enough. If you burden us with more administration and paper work, it only serves to make the business more difficult and less attractive, and therefore it will be more difficult for me
to make a profitable (taxable!) income.

In the end, the State will not end up with any more money, but less. How will the State benefit by forcing legitimate mom-and-pop businesses out of business in the name of “tax reform?”

Please do not support any budget resolution that contains Independent Contractor withholding. It would hurt my family and my business as well as tens of thousands of others in my occupation.

Sincerely,

XXX

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Karen Miner Hurd has been a network marketing professional since 1988.  She is a wife, mother of 5, and a secret Foxtrot comics fan.  She has consistently performed in the top 20% of her company. Karen recently received a Star Achiever award for 15% business growth in the past 12 months.  For partnership opportunities with Karen visit: http://freedomwize.com.

Makes you laugh until you cry.

SpokeUp.com – A social network for those who speak up.

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An actual PDF of the Stimulus bill, AKA “porkzilla” (thanks Cody), and “porculus”. It has a real name – “The John Galt American Recovery and Reinvestment Tax Act of 2009. Reading legislation is mind numbing, but this outrageous power grab will directly impact your network marketing business negatively.

Network marketing works. The industry has nothing to prove in that regard. Network marketing is that it has created wealth and freedom for thousands and thousands of people for over 50 years. The truth is that what has worked for thousands and thousands of people will work for you.

It’s absolutely mind-boggling that network marketers, especially those in established companies, need to defend their online marketing efforts to their peers and corporate partners. Every marketing survey, every market indicator is pointing to the internet. “Home party”, or “party-plan sales” is the lease searched for term in the home business category.

The biggest? “Online home business”.

You would think that the home business/network marketing industry would take the hint, seize the trend, and provide serious training to allow distributors to maximize their efforts. As a marketing professional I am apalled, frankly, at the resistance I have met in established network marketing circles to building online. It’s nothing less than incredible.

The truth is most MLM companies do not promote online marketing largely for 3 reasons:

1) MLM or network marketing is a relationship one-to-one business. The internet was perceived by old-timers who built the industry as anonymous and impersonal. Hmmm. Impersonal? Tell that to all those people who use online dating services, and those that have met their spouses online. Internet marketing facilitates relationships. In many instances it is better than belly to belly.

2) Virtually all proprietary MLM products are trademarked. Companies are afraid they can’t control the use of their trademark online, opening themselves up to all sorts of liabilities and possible legal issues.

3) The is no “best-way” to start. The net is vast. Advertising opportunities are everywhere! Home parties have simple formulas – make a list- find a host/hostess- do the party-collect orders. I don’t believe that there is a basic “one-size-fits-all formula” for online marketing. Not so easy to teach and potentially full of legal landmines for MLM corporate attorneys.

We will save the issue of poorly designed corporate-owned MLM distributor sites for another day.

If you are marketing a nutritional product, the FDA monitors websites for claims or perceived claims. The FDA is extremely broad in its definition of a “claim”. If a distributor makes a claim, even telling their own story, it could generate a rebuke from the FDA. Companies did not want a bunch of FDA warning letters showing up in their mailbox because of distributor website content that they had no control over. That puts a damper on a lot of things.

Personally, I feel that the internet must have a substantial place in a network marketing business. I detail some of those reasons on my Squidoo page: http://www.squidoo.com/ezmoney

Enter lots of network marketers like me, wanting to harness the power of the internet, “yesterday!”. I was shocked to find out that marketing online is not always as fast and furious as I had thought. I was surprised that there is no one way that is the agreed upon place to start. It all depends on your budget, time constraints, personal creativity, goals, offering, marketing system…. and who mentors you online. Emphasis on the mentor!!!

Nevertheless, it is a wonderful way to build your network marketing business. Online marketing skills are becoming increasingly important to any business. Network marketers who ignore the net do so at their own peril. And those prospects will find someone else who does build online. Maybe me .

Learn how to market your MLM online. Subscribe to my newsletter:
” Online Guerilla Marketing Secrets for MLMers”.

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