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House Approves Repeal of Contractor Withholding Tax

Photo: Paul Paladin

By an overwhelming 405-16 vote, the House approved a repeal of a law requiring federal, state and local governments to withhold 3 percent of all contracts.

The withholding requirement was originally approved and signed into law in 2006 but has never been implemented.

The rule is currently scheduled to take effect in 2012 after being delayed as a result of the 2009 stimulus bill.

The bill was sponsored by Rep. Wally Herger and enjoyed widespread bipartisan support, having 269 co-sponsors.

President Obama’s jobs proposal had called the law one of the “burdensome withholding requirements that keep capital out of the hands of job creators.”

The bill now moves into the Senate.

Previous withholding repeal coverage:

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