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 Martin O'Malley has repealed a 2003 law requiring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.