Friday, May 18, 2018
Shu-Yi Oei (Boston College) & Diane Ring (Boston College), Tax Issues in the Sharing Economy: Implications for Workers, in The Cambridge Handbook of the Law of the Sharing Economy (Nestor Davidson (Fordham), John Infranca (Suffolk) & Michèle Finck (Oxford), eds. Cambridge University Press 2018):
A growing number of individuals now perform work in the sector known as the “sharing economy,” and their participation raises important tax and regulatory questions. In this chapter, we survey some of the key tax issues confronting individuals operating in the sharing economy in the United States. Many of the tax implications that arise in sharing economy work stem from the threshold decision by many platforms to classify such individuals as independent contractors rather than employees. Therefore, we first discuss how the threshold classification decision affects the substantive and compliance-related tax issues faced by individuals operating in the sharing economy.
We briefly summarize the doctrinal tax rules governing income taxation of sharing economy participants and discuss some of the compliance challenges experienced by these participants in fulfilling their tax obligations. The chapter then examines tax-related factors (such as lack of withholding) that may affect the labor-supply decisions of sharing economy participants. Finally, we discuss possible reforms that may help alleviate compliance challenges associated with work in this sector or may help these individuals make more informed decisions, and we explore the downsides of such reforms.