3% Withholding for Government Contractors

Federal law, effective in 2012, would require all federal, state, and local government agencies except the very smallest to withhold 3% of payments made to any government contractors, including motor carriers, in order to offset potential federal income tax liability on the part of the contractors.  This ill-considered law would impose enormous burdens on business and governments alike, including many thousands of motor carriers.  ATA is working with a coalition of business and governments to get this requirement repealed before it ever goes into effect, and with the federal Internal Revenue Service as well to see that the law is implemented in as benign a way as possible if the repeal effort should fail.  Click here for recent ATA testimony to IRS in this connection.