Oppose 3% Withholding: Sign on Now!

As a member of The Government Withholding Relief Coalition, we urge you to add your name to the National Sign-on Letter calling for repeal of the new 3% federal tax withholding requirement on payments made by most government entities. Scheduled to go into effect in 2012, this law would require all federal, state and local government entities and instrumentalities to withhold three percent of payments made for goods and services.  The bottom line here is:  This withholding will result in decreased cash flow to businesses that supply goods and services to governments.

This 3% withholding provision has a regressive effect, reserving its greatest penalty for those businesses with the lowest net income – typically, small businesses.   It’s even more burdensome to small technology businesses, which already operate on thin net income margins.  The addition of this 3% withholding will add further complexity to government contracting, making it economically impossible for many small businesses to compete.

Since its enactment, CompTIA consistently has called for repeal, and following the success of the 1099 repeal campaign, we are joining with many of the same organizations to overturn this unfair requirement.  Please join us in this effort.