Singer Burke’s Tax Manager and in-house tax counsel, Greg Zbylut, was interviewed for an article in today’s The Hollywood Reporter to discuss a new bill in California’s legislature that takes aim at California’s gig economy.
Originally targeting the reclassification of drivers into independent contractors by Dynamex (a large freight company), the bill aims to expand the number of workers who must be treated as employees, requiring companies to offer broader benefits and additional labor law protections in return.
That has far-reaching implications for companies that similarly staff independent contractors as drivers, including Uber, Lyft and Postmates. But it also threatens the lucrative loan-out company tax strategy long used by Hollywood talent and their accountants. Combine that with recent changes to tax law, and Hollywood could find themselves facing a devastatingly larger tax bill:
“I don’t think anyone in Hollywood should be ignoring it. They say bad facts make bad law, and here we have something nightmarish.”