Senate repeals 3% tax withholding

The chief executive officer of the Associated General Contractors of America, Stephen Sandherr, issued the following statement today in response to the U.S. Senate vote (by a margin of 95 to 0 with one senator voting present) to repeal the 3% tax withholding mandate:

“An overwhelming, bipartisan majority of senators understand that repealing the 3% tax withholding mandate is essential to boosting economic growth. With construction activity down by $400 billion and the industry’s unemployment rate at 13.7%, the last thing construction employers need is to be forced into giving interest-free loans to the federal government. That is why today’s Senate vote comes as welcome news for construction firms, workers and taxpayers alike. As our members made clear in a recently released survey, many firms will be better able to offer positions to the veterans this legislation also supports without the enormous cost of this measure looming.”

Associated Builders and Contractors (ABC) praised the Senate for passing legislation to repeal the imposition of the 3% withholding tax on contractors (H.R. 674). The repeal measure was passed Oct. 27 by the U.S. House of Representatives.

“The Senate has taken a positive and necessary step today to remove a level of uncertainty in the construction industry, allowing contractors to better plan their long-term businesses strategies,” said ABC Vice President of Federal Affairs Geoff Burr. “Without this burdensome, punitive requirement, contractors that do business with federal, state and local governments will now have the confidence to bid on new projects and create more jobs. We encourage the House and Senate to quickly work out their differences on this measure and send it to the president so he can sign it into law.”