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NRCA Action Alert: Support Repeal of the 3 Percent Withholding Tax

October 20, 2011

NRCA continues working to get Congress to repeal the 3 percent withholding tax on government contracts, which will adversely affect many roofing contractors once implemented. The House is expected to vote on legislation to repeal the tax (H.R. 674) during the week of Oct. 24, and the Senate could vote on a similar bill (S. 1726) as early as tomorrow. NRCA urges you to contact your senators and representative now to urge support for repeal of this job-killing tax.

Background

Congress approved the 3 percent withholding tax in 2006, and after delaying the effective date several times, the tax is scheduled to take effect in 2013. If not repealed, the law will require federal, state and local governments with total annual contracts exceeding $100 million to withhold 3 percent of the value of every contract worth more than $10,000. The 3 percent is taken off the total value of the contract, not the profit; therefore, cash-flow and operating capital disruptions will be a tremendous burden for many roofing contractors, particularly small businesses.

NRCA strongly supports legislation in the House (H.R. 674) and Senate (S. 1726) to permanently repeal this unfair tax and has communicated support to Congress on numerous occasions. Now, we need your help in urging Congress to repeal this tax.

Contact your senators and representative and urge them to support H.R. 674 and S. 1726 because:
  • The withholding tax could eliminate profits on government contracts, affecting contractors' abilities to grow their businesses and create jobs.

  • The disruption in operating capital will negatively affect a company's ability to become "bonded," which is required to bid on many government projects.

  • Most companies' bookkeeping systems are not set up to account for amounts withheld from invoices; the withholding tax also will add costs by complicating contractors' tax filings.

  • Many roofing contractors will be forced to stop bidding on government contracts, a critical source of work during these tough economic times.

  • Congress should act now because withholding will begin affecting contracts well before the provision takes effect in 2013.
How to Contact Your Representatives in Congress

You can easily and quickly contact your senators and representative by clicking on the link below to send an e-mail registering your support for repeal of the withholding tax. Sample text is provided, or you can add your own concerns or the bullet points.

Click here and follow the instructions to contact your senators and representatives.

If you prefer to call the office of your senator or representative, you may do so by calling the U.S. Capitol Switchboard at (202) 224-3121, asking for the member's office and telling the staff of your "strong support for repeal of the three percent withholding tax on government contractors." Ask senators to "support S. 1726" and House members to "support H.R. 674" when the bills come up for a vote. You may wish to use the bullet points provided in your conversation with the lawmaker's staff.

Please let NRCA's Washington, D.C., staff, know when you have e-mailed or called your representatives by contacting Duane Musser, NRCA's vice president of government relations, at dmusser@nrca.net, or Brandon Audap, NRCA's director of federal affairs, at baudap@nrca.net, or call NRCA's Washington, D.C., office at (800) 338-5765.





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