Extra Edition / Web Exclusive

IRS Defers 3 Percent Withholding Regulation for One Year

May 9, 2011
/ Print / Reprints /
ShareMore
/ Text Size+

WASHINGTON - The Internal Revenue Service (IRS) has announced a decision to defer for one year - from Jan. 1, 2012 to Jan. 1, 2013 - the withholding of 3 percent tax on all payments for goods and services made by the federal, state, and local governments with total expenditures of $100 million or more. The 3 percent withholding tax applies to the total contract, not to the net revenue generated from a project.

Geoff Burr, vice president of federal affairs for the Associated Builders and Contractors (ABC), said, “While we welcome this news by the IRS, ABC firmly believes that delaying the effective date is not a solution because there is still no equitable, practical, or cost-effective way to implement this new requirement.

“We will continue to work with our coalition partners to fully repeal this burdensome and unfair regulation,” he said.

“The problem with the 3 percent withholding regulation for construction contractors is that the government will retain the funds necessary to complete a project, such as those needed to pay for subcontractors, materials, and suppliers,” said Burr. “In addition, the increased administrative costs to both large and small contractors as well as the government to comply with this withholding requirement will drive up the cost of construction, which in turn, will force smaller firms out of the public sector market.”

Currently, there are three bills pending in Congress, H.R. 674, S. 89, and S.164, that would fully repeal Section 511 of the Tax Increase Prevention and Reconciliation Act of 2005.

Publication date: 05/09/2011

Did you enjoy this article? Click here to subscribe to The NEWS Magazine

You must login or register in order to post a comment.

Multimedia

Videos

Image Galleries

Mini Split Installation

Twin Cities contractor Aabott Ferraro helped retrofit an older St. Paul home.

Podcasts

NEWSMakers: Jeff Nusz

Jeff Nusz, president, Reitmeier HVAC Services, Tualatin, Oregon, joins the program to discuss how he modernized his website and gained new clients and more money because of it. We’ll go through the process of the change and much more.  Posted on Aug. 1.

More Podcasts

ACHRNEWS

NEWS 07-28-14 cover

2014 July 28

Check out the weekly edition of The NEWS today!

Table Of Contents Subscribe

R-22 PHASEOUT POLL

Some in the industry are calling for the EPA to halt production of R-22 as of 2015. What do you think?
View Results Poll Archive

HVACR INDUSTRY STORE

plumbing-hvac.gif
2014 National Plumbing & HVAC Estimator

Every plumbing and HVAC estimator can use the cost estimates in this practical manual!

More Products

Clear Seas Research

 

Clear Seas ResearchWith access to over one million professionals and more than 60 industry-specific publications, Clear Seas Research offers relevant insights from those who know your industry best. Let us customize a market research solution that exceeds your marketing goals.

DON'T MISS A THING

Magazine image
 
Register today for complete access to ACHRNews.com. Get full access to the latest features, Extra Edition, and more.

STAY CONNECTED

facebook icontwitter iconyoutube iconLinkedIn i con