Text of One Year Delay Language in Recovery Act

Revenue Estimate for Bill as Passed

One-Page Summary of Provision

Tax Developments Since Enactment of 3% Withholding Law

Talking Points

GWRC was formed to repeal a sweeping new requirement mandating that federal, state, and local governments withhold 3% from payments for goods and services.  This unprecedented withholding mandate will affect government contracts as well as Medicare payments, and Farm payments.  The effective date was initially set for January 1, 2011, by Section 511 of the Tax Increase Prevention and Reconciliation Act (P.L. 109-222) that was signed on May 17, 2006.  It was delayed one year to January 1, 2012 by the American Recovery and Reinvestment Act (P.L. 111-5) that was signed into law on February 17, 2009. On May 9, 2011, the IRS issued the final rule, delaying implementation for one year.

Latest News

• Victory! 3% Withholding Tax Repeal Passes Congress
• Coalition Urges Senate to Approve House-Passed Bill
• White House Supports H.R. 674 and offset measure
• House Ways & Means Committee Approves H.R. 674: Repeal of 3% Withholding Tax Gaining Momentum
• Repeal of 3% Withholding on the Fall 2011 Agenda in the U.S. House
• Contact Congress to Urge Support for Repealing the 3% Withholding Tax
• IRS Issues Final Rule, Delays Implementation for One Year

Coalition Letters

• March 30, 2011 – Letter to Senate in support of amendment to S. 493 that repeals the 3% law
• January 28, 2011 – Letter to Chairman Issa
• November 11, 2010 – Letter to the Congress on Need for Action in the Lame Duck
• September 16, 2010 – Letter to House on Need for Action Before the End of the Year
• September 16, 2010 – Letter to Senate on Need for Action Before the End of the Year
• May 19, 2010 – Letter to the President and Enclosure with Tax Developments Since Enactment
• March 2, 2010 – Letter to Senate Leadership
• March 2, 2010 – Letter to House Leadership
• December 16, 2009 – Letter to Senate on Jobs-Creating Legislation
• December 16, 2009 – Letter to House on Jobs-Creating Legislation
• October 29, 2009 – Letter to the Defense Acquisition Reform Panel
• April 2, 2009 – Letter to Reps. Meek and Herger in support of H.R. 275
• April 2, 2009 – Letter to Sen. Specter in support of S. 292
• March 25, 2009 - Issues for IRS to Cover at Public Hearing
• March 10, 2009 – Comments on IRS Proposed Rule
• February 9, 2009 – Letter to Congress Supporting Full Repeal in Stimulus Bill
• April 28, 2008 – Comments to Treasury Notice on Implementation Guidance
• April 21, 2008 – Press Release on DoD Cost Impact Study
• April 8, 2008 – Letter to House Ways and Means Committee
• July 17, 2007 – Letter to House Ways and Means Committee
• March 22, 2007 – Statement for the Record to House Small Business Committee
• March 12, 2007 – Letter to Senator Craig in support of S. 777
• March 8, 2007 – Letter to Treasury Department
• February 15, 2007 – Letter to Reps. Meek and Herger in support of H.R. 1023
• January 17, 2007 – Letter in opposition to use of 3% withholding as an offset
• October 16, 2006 – Letter to Representative Herger in support of H.R. 6242
• July 11, 2006 – Letter to Senator Craig in support of S. 2821

Industry Cost Impact Study from March 2011: Estimates Total Compliance Costs between $75 Billion and $15 Billion Depending on Outcome of Implementing Regulations (only costs assocated with contracting)

• Summary of Cost Estimates and the Methodology

Department of Defense Cost Impact Study from April 2008: Estimates Compliance Costs to Department at $17 Billion

• April 21, 2008 – Press Release on DoD Cost Impact Study
• DoD Letters to Chairman of Armed Services Committee
• DoD Detailed Report on Cost Impact

IRS Rulemaking Implementing the 3% Tax Withholding

• December 27, 2010 – Interim Guidance on the Application of Section 3402(t) to Payment Card Transactions
• March 25, 2009 - Issues for IRS to Cover at Public Hearing
• March 19, 2009 – IRS Noticed of Public Hearing on April 16, 2009
• March 10, 2009 – Coalition Comments on Proposed Rule
• December 5, 2008 – Proposed Rule Implementing Withholding Law
• April 28, 2008 – Coalition Comments to Treasury Notice on Implementation Guidance
• Treasury's Notice 2008-38 Soliciting Public Comment

Resources

• One-Page Summary of Provision
• Tax Developments Since Enactment of 3% Withholding Law
• Talking Points
• Draft Letter to Congress for Businesses to Utilize

Material

• March 2011 – House Dear Colleague from Congressman Herger and Blumenauer
• March 9, 2011 – Connecticut Comptroller Press Release Urging Repeal
• March 7, 2011 – Letter from 13 state and local government organizations
• June 12, 2007 - Senators Collins and Coleman Letter
• March 13, 2007 – Dear Colleague letter in support of S. 777 – Senator Craig
• February 22, 2007 – Dear Colleague letter in support of H.R. 1023 - Rep. Meek and Herger
• September 19, 2006 - Letter from Senator Craig to Senate colleagues in support of S. 2821
• August 31, 2006 - Letter to Senator Craig from SBA Office of Advocacy in support of S. 2821
• May 9, 2006 – CBO Letter with Annual Budgetary Effects

Bills to Repeal Provision

• House – H.R. 674 (112th Congress)
• Senate – S. 164 (112th Congress)
• Senate – S. 89 (112th Congress)

• Senate – S. 292 (111th Congress)
• House – H.R. 275 (111th Congress)
• Senate - S. 2394 (110th Congress)
• Senate – S. 777 (110th Congress)
• House - H.R. 1023 (110th Congress)
• Senate – S. 2821 (109th Congress)
• House – H.R. 6242 (109th Congress)