Maryland Repeals Contractor Withholding Law

Maryland Gov. Martin O'Malley has repealed a 2003 law requiring all general contractors with contracts of $500,000 or more to withhold 3 percent of their contract payments to out-of-state subcontractors with subcontracts of $50,000 or more. The repeal of the withholding requirement is applicable to subcontracts who sign on or after July 1. Withholding will continue for subcontracts who signed prior to July 1, even if the final payments to a subcontractor occur months or years after that date.

According to the ASA, the 2003 measure was originally intended to increase state revenues, but has only raised less than 10 percent of its expected revenue.