10/31/11

Last week, the U.S. House of Representatives passed a bill to repeal a law that beginning in 2013 requires tax withholding of 3% of payments to vendors and contractors providing services to any governmental entity, including school districts.  The bill containing the repeal provisions, HR674, passed 405-16, and is under consideration by the Senate.  The bill removes Section 3402(t) that would have required withholding from payments to any person for services or property, including purchases of office supplies.  The implementation date in the original bill had been delayed due to certain questions about specific applicability and additional administrative costs.

To access H.R. 674, 112th Congress, 1st Session, click on the link below.

http://www.gpo.gov/fdsys/pkg/BILLS-112hr674rh/pdf/BILLS-112hr674rh.pdf