The 3% Withholding Tax mandates that federal, state, and local governments withhold 3 percent from payments for goods and services. This unprecedented withholding mandate will affect all government contracts as well as other payments, such as Medicare and grants, starting in 2011. Section 511 of the Tax Increase Prevention and Reconciliation Act of 2005 (P.L. 109-222) enacted this requirement into law.
Senator Coleman and Senator Collins introduced a revised bill which repeals the 3% withholding requirement. However, it also includes language with the purpose of preventing companies from receiving contracts that have an outstanding tax liability.
Click here to read the revised bill.
Please send your comments/thoughts on the bill to:
Chris Braddock
Director, Procurement Policy
U.S. Chamber of Commerce
Direct: 202-463-5891
Cell: 202-255-5220
Fax: 202-463-3174
cbraddock@uschamber.com
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