AGC Member Testifies on Repeal of 3 Percent Withholding

AGC member and Municipal & Utilities Division Chair Mike Murphy (Turner Murphy Company, Rock Hill, S.C.) testified in favor of repealing the 3 percent withholding at a hearing before the Contracting and Workforce Subcommittee of the House Small Business Committee. The hearing examined the effect of Section 511 of the Tax Prevention and Reconciliation Act of 2005, which will require federal, state and local governments to withhold 3 percent from all payments for goods and services purchased. The Subcommittee considered witness testimony that Section 511 will cost more to implement than it would generate in revenue, restrict the already tight cash flow of small companies, and destroy jobs.  Murphy expressed concern over  the withholding requirement saying, “I believe Congress is making it tougher and tougher for my company to stay in business…This provision has nothing to do with my company’s tax liability, it is just an accounting gimmick that whitewashes over the real cost of government while leaving small companies like mine holding the bag.” There also was a bipartisan press conference following the hearing, where Members of the Small Business Committee and sponsors of the House bill to repeal three percent withholding, H.R. 674, Earl Blumenauer (D-Ore.) and Wally Herger (R-Calif.) were able to come together to express concern with this requirement and promote the repeal of 3 percent withholding. To send a letter to your member of Congress and Senators asking them to support repeal efforts, click here. For more information, please contact Jeff Shoaf at shoafj@agc.org or (703) 837-3350 or Scott Berry at (703) 837-5321 or berrys@agc.org