Today, U.S. Congressman Billy Long fought against crippling IRS regulations by voting in favor of H.R. 674, which would repeal the 3% withholding on contractor payments with the federal, state, and local governments. This provision, originally enacted in 2006 as part of a broad package of tax modifications, was intended to improve tax compliance. Unfortunately, this job-killing requirement would create costly new work for federal, state, and local governments and hold money hostage from government contractors. Long, a cosponsor of the bill, believes the requirement would hurt small businesses.
"The IRS needs to learn that hurting businesses, cities, towns, and consumers during a recession is not going to get our economy back on track," said Long. "This bipartisan, common-sense solution will cut out this unnecessary red tape and let businesses do what they do best: create jobs."
The 3% withholding rule was originally scheduled to take effect on January 1, 2011, but strong concerns of employers and government representatives delayed the date until January 1, 2013. H.R. 674 would repeal the 3% withholding rule permanently.
This bill has received strong, bipartisan support from 262 cosponsors as well as from the Government Withholding Relief Coalition, a 143-member coalition featuring many well-known trade association and groups representing various local governments.
"Much like the costly "Form 1099' requirements that Congress repealed earlier this year, the 3% withholding rule would impose more burdens on cash-strapped employers and hurt job creation." said Long. "Instead of focusing on job creation and economic growth, business and local governments will have to focus on enormous administrative and financial challenges."
Long, a champion of small business, made addressing small business concerns a priority in Congress.