WASHINGTON, Nov. 10, 2011 /PRNewswire-USNewswire/ -- Financial Executives International (FEI), the association of choice for CFOs and other senior-level finance executives, today praised the passage of H.R. 674, legislation to repeal the 3 percent withholding mandate that was set to become effective in 2013. Since 2007, FEI's national advocacy committees, including the Committee on Government Business (CGB) and the Committee on Taxation (COT) have worked to repeal this mandate.
"After years of fighting against the federal mandate to require that 3 percent of payments be withheld to businesses doing work with the government, FEI is pleased that the lawmakers have listened to the concerns of business leaders and repealed this onerous requirement," said Marie Hollein, president and CEO of FEI. "The withholding requirement would have created further complexity and cost, with particular disadvantage to smaller companies, for businesses striving to achieve more certainty in a continually unpredictable environment."
The 3 percent withholding requirement was originally signed into law in 2006 as part of the "Tax Increase Prevention and Reconciliation Act of 2005," with an initial effective date set for Jan. 1, 2011, later delayed until Jan. 1, 2013. The requirement was initially proposed after a 2004 Government Accountability Office (GAO) report found that some government contractors owed unpaid taxes.
Today, the U.S. Senate voted 95 to 0 on the bill to repeal this federal mandate. The House also overwhelmingly passed H.R. 674 in Oct. 2011. Because it was amended to include a Veterans' jobs bill, the Senate version will move back to the House where it is expected to pass without difficulty next week.
FEI's CGB and COT have written several letters to Congress and federal regulators expressing specific concerns with the 3 percent mandate. To read these letters, click here.
Financial Executives International is the leading advocate for the views of corporate financial management. Its 15,000 members hold policy-making positions as chief financial officers, treasurers and controllers at companies from every major industry. FEI enhances member professional development through peer networking, career management services, conferences, research and publications. Members participate in the activities of 85 chapters, 74 in the U.S. and 11 in Canada. FEI is headquartered in Morristown, NJ, with additional offices in Washington, D.C., and Toronto. Visit www.financialexecutives.org for more information.
FEI's Committee on Government Business (CGB) initiates studies and develops positions on existing and proposed legislation and regulations affecting accounting principles/standards/practices, and rules that must be followed by businesses providing goods & services to the Federal sector. FEI's Committee on Taxation (COT) formulates statements and positions on tax legislation, policies, practices, rules and regulations, addressing economic and social implications of taxes, simplification and administration, and tax and accounting relationships, and communicates these to the executive and legislative branches of the government.
SOURCE Financial Executives International