Construction groups have been lobbying Congress for months to eliminate a mandate, set to take effect at the end of 2010, that federal and non-federal agencies withhold 3% of the value of contracts they award, including those for construction. Outright repeal is a long shot this year, but the industry is seeing some daylight on the issue: the House Ways and Means Committee has approved a one-year delay in the 3% withholding.
A bill that the tax-writing panel cleared on July 18 on a 23-18, party-line vote would push back the withholding mandate's effective date so that it would apply to contract payments made after Dec. 31, 2011. The one-year reprieve is part of a measure that also bars the Internal Revenue Service from contracting with private firms to collect unpaid taxes.