Smith Votes To Repeal Onerous 3 Percent Withholding Tax

Washington, D.C. – U.S. Congressman Adrian Smith (R-NE) today voted in favor of H.R. 674 to permanently repeal a 3 percent withholding tax on payments made to vendors by government entities. H.R. 674, which Smith joined more than 260 members in cosponsoring, passed with broad bipartisan support and repeals an onerous withholding tax which would affect millions of U.S. businesses.

“I applaud today’s bipartisan vote repealing the onerous 3 percent withholding rule,” Smith said following the vote. “This rule specifically aimed to levy more taxes and regulations on small businesses. Amid unacceptably high unemployment, we need to be doing everything we can to remove unnecessary barriers to job growth. I urge the Senate to quickly pass this common-sense legislation.”

In 2006, Congress enacted a 3 percent withholding requirement on certain payments made to contactors doing business with government agencies. Strong concerns have been raised about the administrative burden of compliance. By repealing this tax, small businesses will have increased certainty and cash flow with which to invest and hire.

Smith sits on the Ways and Means Committee, which has jurisdiction over H.R. 674. This assignment enables him to serve Nebraskans through engagement on critical issues including trade, tax reform, Medicare, and Social Security.

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