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.
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repealed, the law will require federal, state and local governments with total annual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.
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'
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.
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
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 firstname.lastname@example.org, or Brandon
Audap, NRCA's director of federal affairs, at email@example.com,
or call NRCA's Washington, D.C., office at (800) 338-5765.