December 15, 2011 Edit
On November 19, President Barack Obama signed into law H.R. 674, legislation to repeal the law that requires a three percent withholding on all payments from federal, state and local government. With the repeal of this law, small businesses, including landscape architecture firms, will not be forced to forfeit three percent of all payments received from federal, state, and local governments for services rendered under government contracts.
The three percent withholding requirement was originally passed in section 511 of the “Tax Increase Prevention and Reconciliation Act of 2005” (P.L. 109-222), which would have required federal, state, and local governments with more than $100 million in annual expenditures to withhold three percent of their payments for goods and services. As a result of the law, businesses and government entities could have been burdened with restructuring computer systems and training and hiring new accountants and office managers to assist in complying with the new accounting procedures. Moreover, many small businesses, including landscape architecture firms, would have been disadvantaged because the up-front tax withholding would severely restrict cash flow and could disrupt their ability to provide goods and services.
As a member of the Government Withholding Relief Coalition, ASLA has been working diligently to repeal this law that would have been onerous for many landscape architecture firms. Also, thanks to the advocacy efforts of ASLA members and other allied organizations who contacted their legislators, Congress overwhelming supported the legislation to repeal this law, moved it through the legislative process, and onto President Obama for his signature.
Thank you for your continued advocacy efforts.
Federal Government Affairs Manager
The American Society of Landscape Architects