Idaho Congressman Mike Simpson today lauded passage of legislation to repeal a 3% withholding on government contractors.  H.R. 674 passed the House by a strong bipartisan vote of 405-16.  Simpson has been a cosponsor of this legislation since 2008.

“Democrats and Republicans alike recognize that allowing this provision of law to go into effect would increase costs for state and local governments and adversely impact small businesses,” said Simpson.  “Idaho businesses, universities, and communities have all contacted me with their concern about the 3% withholding tax, and I’m pleased with the bipartisan effort to permanently repeal this misguided law.”

H.R. 674 would repeal a provision of a tax law passed in 2005 that requires government entities to withhold 3% on payment to contractors for goods and services for federal taxes.  The provision was originally intended to go into effect on January 1, 2011, but widespread concern about the unintended consequences of the law led to multiple delays of enactment.  H.R. 674, which permanently repeals the provision, has broad bipartisan support.

“While this may be a relatively narrow provision, its passage is an example of how members from both sides of the aisle can come together to do what is right for the country,” Simpson said.  “Our country faces big challenges, and the only way we will solve them is to look past partisan politics and do what is in the best interest of the nation.”

H.R. 674 is now under consideration by the U.S. Senate, where similar legislation has been introduced.