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June 20, 2011 to the MEMBERS of the UNITED STATES

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June 20, 2011 to the MEMBERS of the UNITED STATES June 20, 2011 TO THE MEMBERS OF THE UNITED STATES CONGRESS: The undersigned organizations, individuals and businesses of every size and industry, and employing millions of American workers, stand united in calling for Congress to repeal the burdensome 3% Withholding Tax that was enacted in Section 511 of the Tax Increase Prevention and Reconciliation Act of 2005 (P.L. 109-222) before it takes effect on January 1, 2013. Unless repealed, the 3% Withholding Tax will have a dramatic, negative impact on millions of honest taxpaying businesses, farmers, doctors and hospitals, as well as state and local governments. Under this provision, the Internal Revenue Service (IRS) was given new broad sweeping authority to hold hostage 3% of nearly every transaction between the public and private sector—giving the federal government an interest free loan on the backs of many honest taxpayers. The onerous nature of this unfunded mandate can best be described by example. After January 1, 2013, should a covered local fire department elect to replace an outdated ambulance with a new one, 3% of the sales price of the vehicle will be withheld from the ambulance seller and sent by the local government to the IRS. In order to compensate for the loss of cash flow, this business will likely increase the cost of the vehicle, which will in turn negatively impact the local fire department’s budget. In order to track, handle and reconcile the transaction, additional paperwork and complex accounting systems will be needed by the IRS, the local government, and the ambulance seller. As federal, state and countless local governments will be mandated to withhold 3% on their payments for many of their purchases, Medicare payments, and farm payments, this example will be multiplied many times over. Governmental entities, as well as public school systems and universities, will pay more for goods and services in addition to major construction and repairs. The tax will drive up the cost of rebuilding and repairing the nation’s deteriorating infrastructure. Local police budgets and cash-strapped businesses will be negatively impacted. Many in the medical community, already frustrated with Medicare reimbursement processes and rates, may opt to no longer accept Medicare patients due to this added burden, leading to diminished care for the elderly. The ultimate irony of the 3% Withholding Tax is that it will cost more to implement than it is estimated to raise in new revenue. A revenue estimate of legislation to repeal the 3% Withholding Tax vastly overestimates the amount of revenue that would be “lost” without implementation, due to an accounting gimmick. The tax is estimated to “increase” revenue by $8.2 billion in its first five years but would actually bring in nearly $6 billion of that amount in the first year solely due to accelerated tax receipts and not to an actual revenue increase from improved tax compliance. Moreover, a private-sector study has estimated that the 3% Withholding Tax will cost federal, state and local governments as much as $75.2 billion in implementation costs during this same time period. We strongly support the view that those receiving payments from the government should meet their federal, state and local tax obligations. However, imposing an onerous 3% Withholding Tax on nearly every transaction between government and honest taxpaying businesses is not the answer. For these reasons we urge you to expeditiously repeal the 3% Withholding Tax. Sincerely, Angela G. Tapley, C.P.A. Mobile Alabama Beef'O'Brady's Family Sports PUb Prattville Alabama CC, Inc. Mobile Alabama Data Capture Consultants, Inc. Mobile Alabama ES Robbins Corporation Muscle Shoals Alabama Georgetown Auto Parts Wilmer Alabama Judy J. Howard Interiors Huntsville Alabama Martin Farms Convenience Geneva Alabama McAlister's of Tuscaloosa Tuscaloosa Alabama Methodist Homes Corporation of Alabama & NW Florida Birmingham Alabama Nitro Green Lawn Care Harvest Alabama Norwood Hall Opelika Alabama Selma Communications Service Selma Alabama Southern Copper & Supply Co., Inc. Pelham Alabama Standard Equipment Co, Inc Mobile Alabama T&W Operations, Inc Huntsville Alabama Troy Systems Integration Group LLC Madison Alabama Underwood Printing & Office Supplies Foley Alabama Weeks Window Ware Prattville Alabama Alaska Native Tribal Health Consortium Anchorage Alaska North Country Drywall Inc Palmer Alaska Usibelli Coal Mine, Inc. Fairbanks Alaska A-1 Driving School of Arizona LLC Prescott Valley Arizona All Vehicle Inc. dba All Vehicle Title & Registration Tucson Arizona Auto-Mobile Repair Service Lakeside Arizona Bruce Cross Insurance Marana Arizona Custom Cleaning Solutions Apache Junction Arizona Custom Pool Service Apache Junction Arizona Dependable Solar Products, Inc. Tempe Arizona Dependable Solar Products, Inc. Scottsdale Arizona Dream Dinners Tucson Arizona EZ Ranch LLC Mayer Arizona IEEE Scottsdale Arizona Jim Davis & Associates Scottsdale Arizona Landmark Engineering & Surveying, Inc. Sedona Arizona LED Lighting Solutions, LLC San Tan Valley Arizona Mace Aviation Queen Creek Arizona Margaret Paddock Independent Notary Public Cottonwood Arizona Oaklawn Family Medicine Clinic Prescott Arizona Oakley's Welding Tucson Arizona Oasis Bedrooms Phoenix Arizona Pequot Communications Inc Tucson Arizona Sam's Northwest #2 Tucson Arizona Sedona Off-road Center Sedona Arizona Shapes & Forms Architects, Inc. Flagstaff Arizona Sundt Construction, Inc Tempe Arizona Sundt Construction, Inc. Tucson Arizona Teletracker, Inc. Tempe Arizona The UPS Store Gilbert Arizona Trophies 'N Tees Safford Arizona Trystar Associates Tucson Arizona Two Sergeants, LLC Avondale Arizona Universal Avionics Systems Tucson Arizona Urban Design Associates Scottsdale Arizona Wild Herb Soap Co. Apache Junction Arizona Best Western Hardy Arkansas CLC Outdoors Vilonia Arkansas Coffee Storehouse Roland Arkansas Insurance by Boyd Cove Arkansas Manatt Web, LLC Little Rock Arkansas Oak Forest Dry Cleaner and Laundry Little Rock Arkansas Rose Antique Mall and Flea Market Rogers Arkansas The Chachere Agency Inc Little Rock Arkansas Wood Renew Siloam Springs Arkansas Action Coach of OC Yorba Linda California ActionShoppe Insurance Rancho Cucamonga California Advanced Marketing & Distribution Inc. Irvine California All Working computer Modesto California AMC Inc. Anaheim California American Industrial Consultants Long Beach California Anthony Apodaca Accountancy Corp Monrovia California Aston Olson Reader Insurance Services Inc. Rancho Cucamonga California Berg Ranch Escalon California Bizal Hoff Inc Menifee California Bleyco, Incorporated Castro Valley California BP Properties - A Property Management Company Sacramento California California Mortgage Associates Modesto California Camarillo Plumbing & Paint Camarillo California Certified Transportation Santa Ana California Champion Heat and Air, Inc Antelope California Clark Pacific West Sacramento California Construction Employers' Association of California Sacramento California D/K Mechanical Contractors, Inc. Anaheim California Delta Bay Mustang Brentwood California Desert Ventures South, LLC Corona California Designing Benefits, Inc. Pleasanton California Devcon Construction Inc Milpitas California Diablo Valley Cabinetry San Ramon California Diana K. Zilko, Attorney at Law Brea California Diede Construction, Inc Woodbridge California Dome Construction Corporation San Francisco California Fox Weather, LLC Fortuna California Garage Door Handyman Reseda California Gardens 2000 Le Grand California Gester Contracting and Design Alamo California Gierlich-Mitchell, Inc. Cypress California Gulley Insurance Services Santa Barbara California Gustavson Accountancy Corporation San Juan Capistrano California H K Plastics Engineering, Inc. Oceanside California Harry Mason Inc. San Francisco California Hattox Design Group, LLC Irvine California Healey Consulting Company Escondido California Heaven On Earth Furniture Salinas California Investment Interface Stockton California Jeff & Dee Enterprises, dba J.A.D.E. Monrovia California John P Alley DDS Yorba Linda California K & W Mfg. Co., Inc. Corona California K.L. Hollowell Home and Elder Care Torrance California Laguna Components Inc. Laguna Beach California Lancaster Plumbing Supplies, Inc Lancaster California M & W Engineering Shingle Springs California Madden Research & Consulting Playa del Rey California Madrona Park Escrow, Inc. Torrance California Marathon Trading Co. Inc. San Martin California Marsaane property management Anaheim California Mary Kay Cosmetics Sacramento California Mascon Inc. Sacramento California Masters Window Cleaning Rancho Cordova California Matson Properties Roseville California Michael Marks Ins. Ag. Chico California Mid Valley Anodizing Burbank California Modesti's Car Care Center Culver City California Morgan & Franz Rancho Cucamonga California Mortgage Field Inspector Loma Linda California National Association of Realtors Bishop California Nature Crafts inc San Jose California Nor-West Realty, Inc. Walnut Creek California Paul Speaker Photography Upland California Premier Action Group San Dimas California Psomas Los Angeles California PTG, Ltd. Murrieta California R&R Pipeline Inc. Santa Paula California Ram Data Processing, Inc. Cameron Park California Robert L Ewing Inc Costa Mesa California Scorca Chiropractic Fremont California Sihler & Associates Coronado California Silver Sales and Designs Corona California Slo World Inc Arroyo Grande California Smith-Kandal Ins & RE Brawley California Sparks,
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