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3 Percent Withholding Tax Repealed

November 21, 2011

Today, President Obama signed into law legislation that repeals the 3 percent withholding requirement that was set to take effect in 2013. Earlier last week, the House voted in favor of the bill 422-0, passing it in a rare moment of bipartisanship. The Senate had passed the bill in a similar bipartisan fashion on November 10, after amending it with language providing tax credits and hiring incentives to assist unemployed veterans. The law would have required scores of public colleges and universities to withhold 3 percent of payments made for the purchase of certain goods and services.

See also:

Congress Takes Action on 3 Percent Withholding and Appropriations (November 3, 2011)

House Takes Action to Repeal 3 Percent Withholding Requirement (October 20, 2011)

Three Percent Withholding Rules Include One-Year Postponement (May 6, 2011)

Administration Supports Delay of 3% Withholding (March 25, 2011)

IRS Exempts Credit Card Transactions from Three Percent Withholding Requirement (January 12, 2011)


Liz Clark
Senior Director, Federal Affairs