The U.S. House of Representatives is expected to begin consideration of a bill to repeal the 3 percent withholding mandate next week. The bill will first be considered by the House Ways and Means Committee, followed by a vote on the House floor as early as the week of Oct. 24.
Starting Jan. 1, 2013, all federal and state contracts for goods and services will be subject to a 3 percent income tax withholding on each and every payment over $10,000 to a contractor. The requirement also applies to large local governments that make $100 million or more in annual expenditures for goods and services. This mandate will be bad for the construction industry.
Both the Associated General Contractors and Associated Builders & Contractors are asking contractors to contact their Representative to urge them to cosponsor and support passage of H.R. 674 and to encourage their employees to do the same.
Visit AGC’s 3 percent withholding website to find additional resources, including talking points, IRS regulations, videos on the impact of this legislation and ways to become involved. Additional information is found on the ABC website.