Tax Issues in the Sharing Economy: Implications for Workers

Forthcoming, Cambridge Handbook on the Law of the Sharing Economy (Nestor M. Davidson, Michele Finck & John J. Infranca, eds.)

Boston College Law School Legal Studies Research Paper No. 480

18 Pages Posted: 10 May 2018 Last revised: 15 May 2018

Shu-Yi Oei

Boston College Law School

Diane M. Ring

Boston College - Law School

Date Written: December 29, 2017

Abstract

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.

Keywords: employee, independent contractor, worker classification, sharing economy, gig economy, Uber, TaskRabbit, taxation, Airbnb, 1099-K

JEL Classification: H2, H20, J20, J01, J08, J21, J22, J23, J24, J38, J40, J48, J68, J70J80, J83, J88, L14, L20, L22

Suggested Citation

Oei, Shu-Yi and Ring, Diane M., Tax Issues in the Sharing Economy: Implications for Workers (December 29, 2017). Forthcoming, Cambridge Handbook on the Law of the Sharing Economy (Nestor M. Davidson, Michele Finck & John J. Infranca, eds.); Boston College Law School Legal Studies Research Paper No. 480. Available at SSRN: https://ssrn.com/abstract=3167464

Shu-Yi Oei

Boston College Law School ( email )

885 Centre Street
Newton, MA 02459-1163
United States

Diane M. Ring (Contact Author)

Boston College - Law School ( email )

885 Centre Street
Newton, MA 02459-1163
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
73
rank
295,221
Abstract Views
253
PlumX