Senate May Consider 3 Percent Tax Withholding Repeal Next Week – Take Action!

Senate may consider repealing 3 percent tax withholding. AGC is pushing for the repeal and asking members to get involved. The U.S. Senate may consider House-passed legislation to repeal the 3 percent tax withholding mandate as early as next week. Senate Majority Leader Harry Reid (D-Nev.) is expected to offer an amendment to the bill that would continue to apply the mandate to contractors found delinquent in their taxes. AGC supports full, permanent repeal of 3 percent withholding and is urging the Senate to take up and pass the House-passed legislation without amendment or modification. Last week, the U.S. House of Representatives approved H.R. 674, a bill to repeal the 3 percent tax withholding mandate, by a margin of 405 to 16. Prior to the vote, President Obama stated his support for the repeal. On Oct. 20, the Senate came within three votes of ending debate on a bill to repeal the 3 percent tax withholding mandate. Reid is considering offering an amendment to H.R. 674 that would continue to apply withholding to contractors that are considered to be delinquent in their taxes. AGC’s position is that the IRS should use existing laws, and not income tax withholding, to enforce the tax code. Delinquency would be difficult for federal, state, and local governments to determine and does not remove the administrative burden of withholding that these entities hope to achieve with repeal. Moreover, innocent contractors may be subject to withholding under such a scenario. AGC encourages all members and chapters to use the tools on our Legislative Action Center to ask your Senators to support repeal of the 3 percent tax withholding mandate by voting for the House-passed bill without amendment or modification. You can also send a letter thanking your Representative for voting in favor of repeal. For more information, please contact Karen Lapsevic at (703) 837-4733 or lapsevick@agc.org.