Obama Signs Repeal of 3 Percent Withholding Mandate

AIA Georgia by AIA National on Nov 29, 2011

WASHINGTON (AIA) – President Obama has signed a bill repealing the three percent withholding mandate. H.R. 674 is aimed at killing a looming federal requirement that would have forced federal, state, and many local agencies to withhold three percent of nearly all payments to contractors beginning in 2013.

The signing of the bill by Obama comes after a lengthy effort to repeal the mandate by the AIA in Washington and thousands of members and their colleagues across the country. The AIA applauds the leadership of Rep. Wally Herger , R-CA, and Rep. Earl Blumenauer, D-OR, who championed the legislation in Congress.

AIA President Clark Manus, FAIA, has called the repeal ‘’ a signal to the design and construction sector, which has been hit hard in this economy and which is working hard at getting back on its feet.’’

Since the profit margin for many businesses is often less than three percent, the withholding mandate would have created significant cash flow problems for day-to-day operations in addition to reducing capital that could be invested in job creation and business expansion.

‘’One of the best ways to unleash the job-creating potential of our sector is to remove needless regulations and fees, wherever possible,’’ said Manus.

Rep. Herger also called the withholding mandate an example of the kind of government policy that discourages job creation.

‘’When small business owners are evaluating whether their investments will allow them to make a living, it matters if a new tax is going to cut off their cash flow in just over a year,’’ Herger said in a statement. ‘’Repealing this tax is one important step. It sends the message to America’s job creators that jobs are our number one priority and that Congress is committed to undoing policies that stand in the way of restoring prosperity.’’

Since 2007, close to 6,000 AIA members have sent nearly 20,000 messages to Capitol Hill in support of repealing the three percent withholding law. This repeal is a testament to the power of architects’ collective voice and the importance of advocacy on issues that affect our industry.