Delay Implementation of 3% Contract Withholding

Committee Passes Legislation to Delay Implementation of 3% Contract Withholding Requirement For One Year

Last week the House Ways and Means Committee passed H.R. 3056, Tax Collection Responsibility Act of 2007 which includes language to delay by one year a 3-percent withholding requirement on government payments to its contractors that is set to take effect in 2011. If enacted, the 3% withholding will not go into effect until the start of 2012. The bill now moves to the House floor for consideration. WIPP strongly supports permanent repeal of the withholding provision because of its adverse effect on small business contractors. The 3% withholding requirement applies not only to federal contractors, but also state and local contractors. WIPP will continue to press for repeal of Section 511 of the tax code.

To view the letter signed by WIPP and other business associations to the House Ways and Means Committee on H.R. 3056, please click here.

WIPP asks that you write to your Members of Congress to urge them to support legislation that will repeal the provision. Two bills introduced will fully repeal the 3% withholding requirement. In the House, HR 1023 has been introduced by Reps. Meek (D-FL) and Herger (R-CA). The Senate bill (S 777) was introduced by Sen. Larry Craig (R-ID). Please click here to visit the WIPP Instant Impact site to take action.