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Congresswoman Miller Introduces Legislation to Repeal Biden Administration's Tax Increase on Gig Economy Workers

May 20, 2021

WASHINGTON D.C. – Congresswoman Carol Miller (R-WV) introduced the Saving Gig Economy Taxpayers Act, which would repeal an unnecessary tax hike included in the costly and partisan American Rescue Plan.

The Saving Gig Economy Taxpayers Act would remove the tax increase put on working class gig and sharing economy independent contractors in the American Rescue Plan by repealing the threshold on companies to send 1099-K forms to independent contractors earning at least $600 a year on any number of transactions, back to the standard requirement of $20,000 a year on at least 200 transactions. President Biden's modification to this requirement abuses taxpayers, creates unrealistic regulations on companies, and further burdens the IRS. Congresswoman Miller's legislation would reverse the administration's damaging changes.

Senator Rick Scott (R-FL) introduced similar legislation in the United States Senate. The bill currently has the support of Americans for Tax Reform (ATR), the U.S. Chamber of Commerce, TechNet, the National Taxpayers Union (NTU), and the National Federation of Independent Business (NFIB).

"The American Rescue Plan provision against gig economy workers is the latest example of the Biden Administration raising taxes on everyday Americans to fund its radical agenda," said Congresswoman Miller. "My bill would protect our gig economy workers and small e-commerce sellers from being taken advantage of in this way, and ensure they continue to have access to flexible, reliable, good-paying work. We cannot allow Washington Democrats to advance their costly, liberal policies – especially when it means sticking hardworking Americans with the bill."

Senator Scott said, "President Biden claims he won't raise taxes on anyone making less than $400,000, but that's a lie – he's already done it. Along with trillions in unnecessary and unrelated in spending in their so-called ‘COVID' spending package, Biden and the Democrats snuck in a tax increase on gig workers, like hardworking Americans that work as drivers for Uber, Lyft or DoorDash. While Democrats refuse to acknowledge the reality that their reckless spending is causing inflation, and that increasing costs and regulations on already-struggling Americans is wrong, I'll keep fighting to protect working class families. Our bill does just that by repealing this bad tax policy."

"Congresswoman Carol Miller should be applauded for introducing the Saving Gig Economy Taxpayers Act," said ATR President Grover Norquist. "This legislation will repeal burdensome 1099-K reporting requirements that Democrats snuck into Biden's $1.9 trillion COVID-19 spending bill. If lawmakers fail to pass Rep. Miller's bill, low-and middle income contractors, small businesses, and freelancers will be slugged with new reporting requirements and paperwork mandates that will result in unnecessary tax complexity."

Tom Sullivan, Vice President of Small Business Policy, at the U.S. Chamber of Commerce added, "Small businesses need our help figuring out the tax breaks and tax credits designed to help Main Street survive the pandemic. The last thing small business wants is a new IRS filing requirement that targets freelancers, independent contractors, and other micro-businesses. This legislation removes an IRS reporting mandate hidden within the American Rescue Plan and will allow for America's smallest businesses to focus on recovery rather than on more government red tape."

"This tax-threshold modification adds significant burden to the gig economy and small business workers at the worst possible time. The priority should be to enable greater access to flexible earning opportunities as we recover from the pandemic, not to add additional tax obligations and compliance requirements to workers and businesses. TechNet, on behalf of our 80 member companies, is completely opposed to this taxation of gig workers and small business owners and supports a full repeal of this legislation," said Carl Holshouser, Senior Vice President, TechNet.

Background:
Up until the upcoming 2021 tax year, e-commerce platforms did not need to provide the 1099-K form, designed to be sent to independent contractors who have made significant earnings through an e-commerce platform, unless the independent contractor earned at least $20,000 on over 200 separate transactions.

The recently passed American Rescue Plan included a provision to lower this threshold to $600 a year with no minimum on the number of transactions, effectively raising taxes on America's hardworking gig economy workers.

Congresswoman Miller previously introduced the Helping Gig Economy Workers Act to ensure digital platform companies can continue to provide benefits to independent contractors without fear of lawsuits over employee classification for the duration of the COVID-19 public health emergency. She also spoke on the floor of the House of Representatives in support of gig economy workers and against the American Rescue Plan.