Over the past year, NACM has informed you that on January 1, 2011, a
mandatory 3% withholding measure on the value of most contracts for
goods and services sold by businesses to federal and state governments,
including local political subdivisions with contracting expenditures of $100
million or more, will go into effect.
NACM opposes this 3% withholding measure:
1. It will adversely impact businesses, which do not have
the administrative or financial capacity to withstand this new withholding
2. It will place a proportionately higher financial burden on all
businesses engaging in commerce with these governments because it is
not a progressive measure and places an undue burden on the already-squeezed
cash flows of many small- and medium-sized businesses.
3. It may force those who currently do business with these
governments to cease doing so, leading to less competition and driving
up prices that the government has to pay for goods and services.
4. It could further weaken the U.S. economy, which depends a
great deal on jobs and growth created by the business community, including the
small and medium-sized businesses that are responsible for the majority of new
The IRS is now requesting comments about this mandatory withholding.
NACM urges you to email Notice.Comments@irscounsel.treas.gov
with your comments. Be sure to include "Notice 2008-38" as the subject
You can also send a letter in opposition to the 3% withholding
CCPA:LPD:PR (Notice 2008-38)
Internal Revenue Service
P.O. Box 7604
Washington, DC 20044
Please act quickly! The comment period closes on April 25, 2008.
For your convenience, click
here for a sample letter.