Repeal of 3% Federal Withholding Urged

Unless Congress acts to repeal previously adopted legislation, effective January 1, 2012, all federal, state, and local governments will be required to withhold 3% of every payment to vendors, contractors, and consultants and send the money to the IRS.  The intent of the legislation is to reduce underreporting of the payment of taxes due.

The National Association of State Procurement Officials (NASPO) recently went on record urging Congress to repeal the legislation, calling it "an administrative and record-keeping nightmare."

For more information, click on any of the following links:

• Issue Brief by NASPO on the need to repeal the legislation
• Government Withholding Relief Coalition

Without repeal of this legislation, there are significant negative impacts to both government agencies and businesses.