Ask today to have your representative or senator co-sponsor H.R. 674 and S. 164 to repeal an unfair and unwarranted withholding mandate.
In Less Than 40 Weeks, Federal, State, and Local Governments will be Forced to Withhold 3% From Every Payment to Contractors for Taxes! This withholding will often exceed the total tax liability for the company by 200 to 300%. This tightened cash flow to contractors could restrict bonding capacity and the ability of contractors to pay for labor and suppliers to complete a project. Most construction contracts average about 3 percent profit.
In 2012 a new law, Section 511 Tax Increase Prevention and Reconciliation Act of 2005 (P.L. 109-222), will require federal, state, and local governments to withhold 3-percent from all payments for goods and services as a guard against possible business tax evasion. The law:
Requires withholding of 3% on all government payments for products and services made by the federal, state, and local governments with total expenditures of $100 million or more.
Affects payments for goods and services under government contracts as well as payments to any person for a service or product provided to a government entity (e.g. Medicare, certain grants).