The House of Representatives voted overwhelmingly on Thursday, October 27, 2011 - by a vote of 405-16 - to repeal a 2005 law that would require federal, state, and local agencies with expenditures of $100 million or more to withhold 3% of every payment over $10,000 to all contractors, consultants, and vendors, and send the money to the IRS. The 3% withholding was designed to help ensure that businesses pay income taxes to the IRS.
The rare bipartisan support of the legislation reflects concerns expressed by more than 140 business and government associations. President Obama had proposed a one year extension (from January 1, 2013 to January 1, 2014) on the implementation of the 3% withholding tax in his American Jobs Act. But the House went one step further, voting to repeal the law. The House measure is supported by the President, and it is anticipated that the Senate will take up the very soon, where it is expected to pass.
Mike Purdy's Public Contracting Blog© 2011 by Michael E. Purdy Associates, LLChttp://PublicContracting.blogspot.com
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