GovExec: Contractor tax provision forces changes to financial systems

A provision in a tax law passed last year would require agencies to revamp financial management systems unless federal contractors are successful in convincing Congress to repeal the provision.

Section 511 of the Tax Increase Prevention and Reconciliation Act of 2005 (TIPRA) requires federal and state governments, and local governments with expenditures of $100 million or more, to begin in 2011 withholding a tax of 3 percent of all payments to government contractors. The 3 percent withholding would raise an estimated $7 billion between 2011 and 2015.

Congress added the provision to the law to make it more difficult...Full Article.