The full House of Representatives voted overwhelmingly to repeal an onerous tax provision carrying massive negative consequences for those with government contracts.
The House voted 405-16 Thursday to repeal the 3% withholding tax, which is set to go into effect on government contracts in 2013 if the repeal proposals fall flat in the Senate. The 3% withholding tax was originally enacted as part of the Tax Increase Prevention and Reconciliation Act (TIPRA) of 2005. While its goal was to address the nation's tax gap, representing the annual $345 billion in taxes legally owed but left uncollected, the provision would ultimately do more harm than good, wreaking havoc on the cash flow of companies that do business with government entities.
Challenges remain in the Senate, which most recently rejected a similar repeal measures, each which failed on party lines in acts that smacked of the partisanship rife in Congress during recent sessions.
NACM, long a vocal supporter of repealing the 3% withholding provisions, applauds the House vote and urges the Senate to follow suit.
Brian Shappell and Jake Barron, NACM staff writers