We are all eager to see the new 3% government withholding requirement repealed before it goes into effect at the end of this year, so I’m pleased to let you know that the House version now has 218 cosponsors, with the majority of House members cosponsoring the bill. With the addition of Senator Toomey, there are now 29 cosponsors in the Senate and momentum is growing. Additionally, in a memo to House Republican members late last week, Majority Leader Eric Cantor laid out their agenda for the Fall and included in the second section of the memo is repeal of the 3% withholding tax, which he deems a “burdensome requirement.”
This measure, which will require federal, state, and local governments to withhold 3 percent from all payments for goods and services and is due to be implemented in January of 2013, would be a paperwork burden for local government and likely increase the cost of contracts. Studies also suggest that the estimated $215 million per year of increased revenue due to improved tax compliance will be less than the additional costs of implementing and administering the withholding requirement for governments and businesses.
If you are interested in finding out if your Congressional delegation has cosponsored repeal legislation and to learn more about how to advocate for full repeal of this requirement, please contact TFG Partner Amanda Wood at awood@tfgnet.com or 202-331-8500.
- Posted by Amanda Wood, The Ferguson Group
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