NRCA Action Alert: Support Repeal of the 3 Percent Withholding Tax
NRCA is working to get Congress to repeal the 3 percent withholding tax on government
contracts, which adversely will affect many roofing contractors once implemented.
NRCA urges members to contact their representatives in Congress now to urge them
to co-sponsor legislation to permanently repeal this job-killing tax.
Congress approved the 3 percent withholding tax in 2006 with the goal of improving
tax compliance, and it originally was scheduled to take effect in 2011. Implementation
has been delayed twice, and it now is scheduled to take effect Jan. 1, 2013. 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, and thus cash flow and operating capital disruptions will be tremendous
burdens for many roofing contractors, particularly small businesses.
NRCA strongly supports legislation in the House (H.R. 674) and Senate (S. 164) 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 representatives and urge them to co-sponsor S. 164 or H.R.
The withholding tax could eliminate profits on government contracts, thus affecting
contractors' abilities to grow their businesses and create jobs.
The disruption in operating capital negatively will 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, and 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.
If you prefer to call your senators' or representatives' offices, you may call the
U.S. Capitol Switchboard at (202) 224-3121 and ask for the member's office,
telling the staff of your "strong support for repeal of the 3 percent withholding
tax on government contractors." Ask senators to co-sponsor S. 164 and House members
to co-sponsor H.R. 674. Provide your address so they know you are a constituent
and can send you a follow-up letter. You may wish to use the previously mentioned
bullet points in your conversation with the lawmaker's staff.
NRCA and other associations are asking their members to make grass roots contacts
with their members of Congress during the week of June 13 to have maximum effect,
so please follow through this week, if possible.
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 (800) 338-5765.