Over the past month, ACCA contractors and other small business owners sent Congress thousands of messages urging them to repeal the 3 percent withholding mandate. The Air Conditioning Contractors of America, and several organizations that worked to see its defeat, saw Congress vote in their favor Nov. 16.

The House of Representatives voted to pass a Senate-amended version of H.R. 674, legislation to repeal the 3 percent government withholding tax mandate on federal, state, and local contracts that was scheduled to take effect in 2013. In passing the bill last week by a vote of 95-0, the Senate added an amendment to provide help to veterans in finding jobs and to give a tax credit to companies that hire veterans.

According to ACCA officials, the 3 percent withholding tax requirement was a revenue raiser tucked into the Tax Increase Prevention and Reconciliation Act of 2005 that extended several tax cuts, including lower capital gains tax rates and expanded small business expensing allowances. ACCA has been working with the Government Withholding Relief Coalition to repeal the 3 percent withholding tax since it became law in 2006.

By passing the Senate-amended version of H.R. 674, the House clears the way for President Barack Obama to sign the repeal into law.

“ACCA is pleased that Congress again worked together to pass legislation to help small businesses. Earlier this year, Congress repealed the onerous 1099 form filing requirement. With the repeal of the 3 percent withholding tax on government contracts, small businesses that perform work for a government entity won’t face additional paperwork and potential loss of revenue,” said Paul T. Stalknecht, ACCA president and CEO. “Since President Obama has already come out in support of this repeal, we hope that he will act swiftly to sign this bill into law.”