It's July in Virginia - it's hot, humid and we have a host of new legislation taking effect. Two are particularly important for business owners to note.
The first imposes steep penalties for incorrectly classifying workers as independent contractors. The new law establishes a presumption that a worker is an employee unless the business owner can prove otherwise. The penalties range from $1,000 per worker to $5,000 per worker. The chart below provides some useful guidelines.
The second law of interest to business owners requires credit card providers, such as Square, Paypal, or Venmo, to report payments made to businesses if those payments are greater than $600. The current Federal threshold for reporting these payments is $20,000. This legislation follows the lead of similar legislation in several other states and is designed to increase reporting compliance by small business owners, particularly those considered to be part of the "gig economy".
Neither of these laws change the requirements that have always been in place; however, they provide more tools to the Virginia Department of Taxation to audit and enforce existing laws and regulations.