NACM, and government contractors across the country, are hoping the vote will finally mark the end of the 3% withholding tax, a requirement set to go into effect on all local, state and federal government contracts starting in 2013. As mentioned previously, the House of Representatives has already voted in favor of repealing the withholding tax in a rare bipartisan landslide vote of 405-16.
Reid had earlier suggested that he would amend the bill, to ensure that the 3% withholding requirement would still apply to any tax delinquent contractor. The details of this proposal remain vague, but such an amendment could potentially derail the repeal effort, or present greater implementation challenges should the repeal even succeed. NACM has always supported, and continues to support, a full repeal of the withholding requirement, and encourages the Senate to enact more targeted tax compliance measures at government contractors, as even the Obama Administration has suggested.
Another measure that could find itself pinned to the repeal bill is a largely non-controversial piece of legislation that offers a tax credit to certain businesses that hire veterans.
In the final run-up to the Senate‚Äôs repeal vote on Monday night at 5:30pm, NACM encourages all of its members to contact their senators to encourage them to support H.R. 674. A full repeal of the 3% withholding tax is the only way to ensure that the nation‚Äôs government contractors can stop worrying about a potentially mandatory reduction in cash flow, and get back to the important work of growing to create jobs and provide governmental entities with the best prices on future projects.
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