The PHCC reports that it successfully helped stop a last-minute congressional effort to accelerate a 3 percent tax withholding requirement.
The bill would have affected businesses involved in local, state or federal government projects, including plumbing and HVACR contractors. Through lobbying congressional offices and outreach to members, the Plumbing-Heating-Cooling Contractors National Association said that it helped prevent the legislation from being implemented in 2007 - four years earlier than originally planned. The vote to drop the acceleration proposal occurred in the early hours of Dec. 9.
The 11th hour withholding “acceleration” was an attempt to create a trust fund for rural schools and communities.
A letter from the association stated: “While PHCC is sympathetic to the need to fund rural schools and are supportive of efforts to ensure quality education of America’s youth, we are troubled that there has been virtually no debate on the merits of having the contracting community bear sole responsibility for creating a new trust fund for rural schools.”
Set to go into effect in 2011, the proposal mandates that all government entities - federal, state and local - deduct and withhold from payments made to individuals or businesses providing any goods or services an amount equal to 3 percent of the total.
This new withholding requirement would affect all government contracts as well as any payment to any person for a service or product provided to a government entity, such as plumbing, heating and cooling contractors. PHCC has already begun an effort to defeat the provision.