Sign up to receive email updates
Capps Votes For Bill To Lift Regulatory Burden for Small Business and Local Government
WASHINGTON – Today Congresswoman Lois Capps (CA-23) voted in favor of a bipartisan bill to ease federal reporting requirements on state and local government and small businesses. She was a cosponsor of the legislation, which would repeal a mandate to require Federal, State, and local government entities to withhold three percent of their payments to most vendors and contractors beginning in 2012. The withholding requirement was signed into law by President Bush in 2005 and was intended to improve tax compliance and raise revenue. But many businesses have said that complying with the provision would be too onerous and disrupt cash flow and local governments have also expressed deep concern about the cost of implementing the rule. Capps also voted in favor of an amendment to the bill that would have excluded contractors currently delinquent on their taxes from benefitting from the repeal of the 3 percent withholding provision. That amendment failed in a party line vote.
While the intent of the reporting requirement is a good one—to crack down on tax cheats- I’ve heard loud and clear from local and state officials and small businesses on the Central Coast that the withholding requirement would penalize the overwhelming majority of businesses that play by the rules and that it would be too costly for our local governments to implement. Especially in these tough economic times, we need to make sure that we are eliminating rules that hinder small business growth and needlessly waste taxpayer dollars. I’m glad the President is supporting this bill and I hope it is signed into law as soon as possible,” said Capps.
Santa Barbara and Ventura County have both written to Capps in support of the legislation. From 2009-2010, Santa Barbara County made payments to 8,345 vendors totaling $456,732,424, and Ventura County made payments to 14,045 vendors totaling $407,962,196.