Contractor’s Toolbox – 3% withholding on government contracts comes under fire

Description

Abstract: A controversial tax provision is scheduled to take effect in a little over a year, and it could have a huge impact on contractors’ cash flow. The provision requires most government entities to withhold 3% of payments for goods and services. However, a number of business groups oppose the new requirement and, as of this writing, several proposals are pending in Congress to repeal it. The article explains the rationale for the requirement and the arguments for repeal.