Withholding tax repeal heads to president

The House has passed a measure to repeal a 3-percent payment withholding tax.

The vote, taken Nov. 16, was 411 to 0.

The bill is now on its way to the White House for the President Barack Obama’s signature. The president has said he supports the repeal.

The bill (H.R. 674) would repeal a law that would require agencies to keep back 3 percent of the amount paid to contractors. The law was passed in 2006, but it has never been implemented.

Industry groups are pleased with the vote.

“We’ve been working to repeal this law since it was first passed and are elated with the overwhelming endorsement by Congress,” said Olga Grkavac, executive vice president for public sector at TechAmerica. “We are very much looking forward to watching the president sign the repeal of this law."

While the tax would bring in money for the government, industry groups suggested that the administrative costs to set up the systems to gather, track and later distribute the money again could well exceed what tax would bring in.

The Senate passed the bill Nov. 10 without a vote against it.

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.

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