NSBA Applauds Three Percent Withholding RepealNovember 21, 2011
On Nov. 16, the House passed H.R. 674, effectively repealing the NSBA-opposed and highly burdensome three percent withholding tax mandate enacted as a pay-for in the Tax Increase Prevention and Reconciliation Act of 2005. The provision was approved by the House as amended by the Senate, by a vote of 422 to 0. This legislation is now headed to President Barack Obama, who has previously signaled support for repealing the measure and is expected to sign the bill soon.
Below is a statement from NSBA President Todd McCracken applauding Congress and the administration for their efforts to repeal this onerous mandate.
“Repeal of this unfair mandate has been a long-time coming and something NSBA members worked hard to achieve. The three percent mandate exemplifies the problem posed by a lack of understanding of all ramifications—both direct and indirect—of a law or regulation before it is put into place.”
“I applaud the House and Senate for working to make this widely supported, bipartisan law a priority, and also applaud the administration for their support of repeal. These combined efforts send a strong message to a small-business community that is plagued with uncertainty: Congress CAN, in fact, work together to get things done.”
“If allowed to become law, this flawed mandate would have essentially forced companies to provide the federal government with an interest-free loan. Because the three-percent withholding was based on the total cost of the contract, and not merely the profit of the contractor, small firms that do business with any level of government would have faced serious cash flow problems. This is without question the wrong time for the government to do anything to lessen a small-business owner’s capital.”
Please click here for more details on NSBA’s opposition to the three percent withholding provision.