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Federal Contractors to pay 3% on every award |
Issue: GOVERNMENT CONTRACTORS NOW FACE 3% TAX ON ALL FEDERAL SALES
Date: Thursday, July 19, 2007
Overview of New Legislation
As of December 31, 2010, any institution receiving more than $100 million in government funding annually, will be subject to a 3% tax on awards received from federal, state and local government agencies and their relative subdivisions. According to the Tax Reconciliation Act of 2005 H.R. 4297, Public Law 109-222 section 511, the tax will be applied to property and services rendered, government vouchers and/or certificate programs.
Government contractors, and small businesses will be among the most severely affected groups under the provisions of this new legislation. P.L. 109-222 penalizes successful contractors in an already competitive market.
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Public Law 109-222 section 511
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