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House Approves Repeal Of Contractor’s Tax

ALBUQUERQUE, N.M. — In a rare show of unity for Congress and New Mexico’s delegation, the House voted overwhelming to repeal a law requiring federal, state and local governments to withhold 3 percent of what contractors are owed until they pay their taxes.

U.S. Reps. Martin Heinrich, D-N.M., Steve Pearce, R-N.M. and Ben Ray Luján, D-N.M. all signed on as co-sponsors and voted to repeal.

Lujan, Heinrich and Pearce told the Journal the legislation would have hindered job growth and its repeal will aid small businesses that seek contracts with city, state and federal governments.

“Repealing this misguided tax policy will help small businesses and contractors in New Mexico do business with the government, which will allow them to grow and hire more workers,” Heinrich said in a statement.

The law was approved in 2006 and designed to force scofflaws who perform government work but owed taxes to pay up. A stronger political imperative — lawmakers’ desire to show voters they are trying to preserve jobs — drove the repeal Thursday.


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Lawmakers approved the legislation 405-16. It still needs Senate approval.

The government would lose an estimated $11 billion by repealing the law. But accompanying language approved by the House would make up for that loss by making it harder for hundreds of thousands of lower- and middle-income people to qualify for Medicaid under Obama’s health care overhaul law.

It was approved 262-157.