Senate Passes Repeal of 3% Withholding Opposed by Businesses
Last week, we informed you that the bill relating to the 3% withholding repeal for government contractors passed in the U.S. House of Representatives and had moved to the U.S. Senate for consideration.
Last night, the Senate passed the bill to repeal the withholding. However, prior to passing the bill, the Senate made a few amendments. These additions include:
- A tax credit of up to $5,600 for hiring veterans that have been looking for a job for six months or more.
- The continuous 100% tax levy on “specified payments” to vendors for goods and services sold or leased to the federal government would be extended to include payments for property, goods, or services sold or leased to the federal government.
- No more than 12 months after the enactment date, Treasury would be required to submit to the appropriate Congressional committees a study on ways to reduce the amount of federal tax owed but not paid by persons submitting bids or proposals for the procurement of property or services by the federal government.
Since the bill differs from the version that the House previously passed, it now heads back to the House. The president has stated that if passed, he will sign the bill into law, presenting a victory for those who believed the withholding requirements were too burdensome and costly to implement.