The GigReporter

FLEX ACT UPDATE​

Over the past several months, SCI has been working to advance an important conversation around the future of independent work through the Freelancer Expense and Tax Relief Act, or FLEX Act.

The FLEX Act is designed to establish clearer federal tax standards for legitimate independent business relationships while maintaining documentation, reporting and safeguards intended to distinguish bona fide independent businesses from improper arrangements.

HOW THIS IMPACTS YOUR BUSINESS

The clarity is especially important for the logistics and final mile industries,

Companies and contractors that continue to navigate the federal tax treatment of independent service relationships with far too much uncertainty. Independent contractors, owner operators, and small transportation businesses are an essential part of the supply chain that cannot continue to invest and grow with that much doubt. 

What it Does?

The current FLEX Act proposal would establish a federal employment-tax safe harbor for qualifying independent service arrangements. To qualify, arrangements would have to meet defined requirements, including written agreements, use of an EIN, operational independence, provision of equipment, non-exclusivity, and financial risk.

The proposal also includes additional tax relief for qualifying independent service providers and enhanced information-reporting requirements.

SCI’S LOBBYING EFFORTS ON CAPITOL HILL

SCI's work has gone beyond developing and discussing policy concepts.

On September 16, SCI brought the FLEX Act directly to Capitol Hill for a full day of meetings designed to introduce the proposal, explain the challenges facing legitimate independent businesses, and gather feedback on how the legislation could move forward.

The outreach included conversations with House leadership, members and staff connected to the House Ways and Means Committee and Tax Subcommittee, the Republican Study Committee, and offices with backgrounds in small-business, workforce, 1099 reporting, employment-tax, and independent-work issues.

Rather than presenting the FLEX Act as a finished proposal and simply asking for support, SCI used these meetings to test the legislation.

Discussions focused on:

• The proposed federal safe harbor

• Contractor tax relief

• Reporting requirements

• Protections against abuse

• The practical legislative path needed to move the concept forward

BUILDING TRACTION

That engagement represents an important step forward.

It puts the concerns of the logistics industry, independent contractors, and the businesses that support them directly in front of policymakers who work on the tax and workforce issues affecting these relationships.

The FLEX Act is still a developing proposal, and additional work remains. However, SCI's Capitol Hill outreach has helped move the conversation from an industry concern to a broader legislative discussion and created an opportunity to continue refining the proposal with policymakers and industry partners.

LOOKING AHEAD

For SCI, the goal is straightforward: advocate for clearer, workable rules that recognize legitimate independent businesses while preserving appropriate safeguards and accountability.

We look forward to continuing that work and keeping our industry partners informed as the FLEX Act develops.