Senate votes to kill 3 percent withholding tax

The Senate voted overwhelmingly today to kill the 3 percent withholding tax on contractors. The legislation passed 95 to 0.

The bill would repeal a tax that would keep back 3 percent of payments the government makes to contractors. The tax was passed in 2006, although it has been repeatedly delayed since.

While the tax would bring in money for the government, industry groups debated whether the administrative costs to set up the systems to gather, track and later distribute the money again would well exceed what it would take in.

The Senate added a provision that would to give a tax credit to companies that hire veterans.

The House passed its version of the bill Oct. 27. The House and the Senate now will have to work out the differences in their versions of the legislation before it would go to President Barack Obama for his signature.