Glass and Glazing Contractors Welcome Contractor Repeal Bill
November 3, 2011

By Sahely Mukerji,

Glass industry professionals strongly support the House bill that would repeal contractor withholdings rule.

"Anything that eases the economic challenges facing the construction industry benefit not only our industry, but the entire economy," says Mic Patterson, director of strategic development at the Enclos Advanced Technology Studio in Eagan, Minn. "This is especially true for contract glaziers and the other specialty subcontractors that feel the pinch of waiting for money on the upstream side, while having to honor net industry terms on the downstream vendor, fabricator, and material supply side, thereby already playing an integral role in financing construction projects. We are encouraged by this development and look forward to its speedy implementation."

On October 27, the House of Representatives passed a bill to overturn an earlier measure that required federal, state and local governments to withhold 3 percent of payments to contractors until they paid their federal taxes. President George W. Bush signed the original measure into law back in 2006, but it has yet to be implemented. The House passed the measure by a margin of 405-16.

Although Attila Arian, president of Seele in New York City, notes that government jobs usually are not a source of business for European-based companies such as his due to the Buy America clause, he adds, "We know that in the economic environment a lot small- and medium-size glazing contractors depend on government jobs to make ends meet. Cutting into the already low margins by imposing tax witholdings would have been a move in the wrong direction. We are very glad to see that the House has repealed the 3 percent tax withholding [measure]. The economy will rebound when small- and medium-size companies start hiring, and not when they file bankruptcy, because they cannot meet their financial obligation."

Even though the House passed the measure by a wide margin, its passage in the Senate might not be that easy. According to a November 3 Bloomberg Businessweek report Senate Majority Leader Harry Reid wants to rewrite the bill, and ensure that the requirement's repeal would apply only to government contractors that are current on their tax obligations.

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