The National Burglar & Fire Alarm Association (NBFAA) has called for enactment of legislation to repeal Section 511 of the Tax Increase Prevention and Reconciliation Act of 2005, a Federal withholding mandate set to become effective in 2011. Repeal of this withholding tax provision is a legislative priority for the association.
House Bill H.R. 1023, introduced recently by Rep. Kendrick Meek (D-Fla.) and Rep. Wally Herger (R-Calif.), seeks to repeal the mandate that calls for the federal government, as well as state and local governments with annual spending of more than $100 million, to withhold 3 percent from payments to their vendors for goods and services and send it to the IRS. The Section 511 mandate also will affect Medicare payments, farm aid and certain grants.
“This tax penalizes small businesses across the country. For every contract our members have with the government, instead of receiving payment in full for their services, the government has decided just to keep a portion for itself,” says NBFAA Government Relations Committee Chairman Michael Meridith, president, Security Equipment Inc. of Omaha, Neb.
“Section 511 was added to the final House-Senate conference version of last year’s tax legislation without any consultation with state and local government officials or organizations representing government contractors. Members of Congress were not aware of the provision or what it would mean to their districts. It simply should be repealed,” adds Meridith.
A member of the Government Withholding Relief Coalition, NBFAA was among more than 50 organizations that sent a letter recently to Reps. Meek and Herger applauding their leadership and pledging to seek enactment of H.R. 1023.
