I receive a 1099 form instead of a W-2 for my work. Am I subject to the City of San Diegos Business Tax requirement?
“Every person engaged in any business, trade, calling, occupation, operation, franchise, vocation, profession or other means of livelihood, as an independent contractor and not as an employee of another and not specifically taxed by any other business tax code of The City of San Diego, shall pay annually a business tax.” A person who is an employee and whose compensation is reported on a Federal Form W-2 is not in business and is not subject to the business tax. However, those that work as an “independent contractor” and/or are paid by 1099 may be subject to the City of San Diego’s Business Tax requirement. This may include but is not limited to Police regulated businesses, State Contractor’s Bureau licensees, consultants, lawyers, artists, authors, writers, etc. As an independent contractor, for tax purposes you are considered a separate business entity rather than an employee. Business & Professions ยง16300 requires the City to use the way in which a taxpayer reported income/expenses
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