AGC Testifies at IRS on 3 Percent Withholding, President Proposes Additional One-Year Delay

Monday, Sept. 12, 2011, AGC’s CEO, Steve Sandherr, testified at a public hearing at the Internal Revenue Service (IRS) on proposed regulations to change the effective date of the 3 percent withholding mandate to Jan. 1, 2013 for new and materially modified contracts, and to Jan. 1, 2014 for all contracts (new and existing).  AGC expressed support for the implementation delay and opposition to imposing the 3 percent government withholding mandate on existing contracts on Jan. 1, 2014.  Also on Monday, the President released details of his American Jobs Act.  Included in the proposal is a provision to extend date for imposition of 3 percent withholding one additional year, to Jan. 1, 2014. AGC continues to push for full, permanent repeal of the 3 percent withholding mandate. Next week, AGC chapter executive and chapter leadership will be lobbying members of Congress to repeal 3 percent withholding.  House Republican leadership has identified repeal of the 3 percent government withholding mandate as a priority this fall (including the Speaker in an economic address today) and may consider the legislation as early as October.  Currently there are 241 – a majority – of House members signed on as cosponsors of H.R. 674, a bill to repeal 3 percent government withholding. While passage of 3 percent government withholding repeal is expected in the House when it comes up for a vote, the Senate has yet to schedule debate on similar legislation there despite a record 30 cosponsors. AGC will work closely with House Republican leadership as it prepares for debate on 3 percent government withholding.  AGC continues to urge its members and chapters to contact their Senators and Representatives to ask that they cosponsor legislation to repeal the 3 percent government withholding mandate. Use AGC’s 3 percent withholding website to find additional resources including talking points, IRS regulations, videos on the impact of this legislation, letters sent to Congress by AGC, and ways to become involved.  Please continue to make contact with your legislators and encourage your employees to do the same by using AGC’s Legislative Action Center. For a list of cosponsors in your state, please click here. For more information, please contact Karen Lapsevic at (202) 547-4733 or lapsevick@agc.org.