Legislation to Repeal Withholding on Government Contracts Introduced

By Consulting Specifying Engineer Staff March 8, 2007

Legislation to repeal a tax withholding requirement for all government contracts and payments was introduced in the House this week by Congressmen Kendrick Meek (D-FL) and Wally Herger (R-CA).

The Meek/Herger bill (H.R. 1023) would repeal Section 511 of the Tax Increase Prevention and Reconciliation Act of 2005, which is a sweeping new requirement mandating that federal, state and local governments that spend $100 million or more annually withhold 3% from payments for goods and services.

The withholding mandate is scheduled to take effect in 2011 and covers all government contracts as well as any payment to any person for a service or product provided to a government entity.

The legislation is supported by the American Council of Engineering Companies, Washington, D.C., among other associations.

“This is one of the most inherently unfair pieces of legislation to come along and we will aggressively fight to see that it is killed,” said ACEC President Dave Raymond.

ACEC is working with a broad coalition and actively lobbying Congress to pass the bill. Passage of this legislation will also be a major goal for ACEC’s “citizen lobbyists” during its annual convention, which takes place May 6-9 in Washington, D.C.,

To view ACEC’s endorsement letter to Congressman Meek, click here .