Nov. 22, 2011: Repeal of 3 Percent Withholding Tax on Government Contracts Signed Into Law
WASHINGTON — Legislation repealing the 3 percent withholding tax on government contracts has been signed into law by President Obama. The legislation, H.R. 674 - 3% Withholding Repeal and Job Creation Act, also includes a provision providing tax credits to companies hiring military veterans.
The proposed withholding of 3 percent tax — originally set to take effect in 2011, then pushed back to Jan. 1, 2012 and then to Jan. 1, 2013 — was to apply to payments for goods and services on federal, state, and local government contracts.