Senate Approves 3 Percent Withholding Repeal

Yesterday, the U.S. Senate voted 95-0 to pass H.R. 674, legislation to repeal a requirement for governments of all levels to withhold three percent of nearly all payments for goods and services, including construction contracts, beginning January 1, 2013.  The legislation also makes adjustments to health care calculations that will cut $13 billion from the annual budget—a figure that will cover the repeal’s anticipated lost revenue to the federal government.  The measure cleared the House of Representatives October 27 by a margin of 405-16.

Before final passage, the Senate also voted 94-1 to adopt an amendment to the legislation that would, among other things, give companies tax incentives for hiring unemployed veterans and require a study of tax delinquency among federal contractors.  As such, the revised measure must now either be approved by the House or reconciled with the House-passed version. Early indications are that the House will act on the Senate-approved bill.

These actions bring the transportation construction community closer to final repeal.

If you have questions or comments, please contact Mike Nystrom, MITA’s executive vice president, at or Call him at the MITA office at 517-347-8336.