Long term care providers got a victory in November when Congress repealed the 3 percent withholding tax mandate to allow businesses, including skilled nursing facilities, to utilize all payments on products and services made by government units.

“The repeal of this burdensome tax policy is a victory for patients and providers alike, who require timely products and services in order to ensure high-quality care in America’s skilled nursing facilities,” said Gov. Mark Parkinson, president and chief executive officer of the American Health Care Association (AHCA).

“Without this so-called interest-free loan, providers can better facilitate daily resources to care for patients. As Congress begins to turn more of its focus on finding ways to reduce costs, it is critical that we protect these resources that ensure our seniors and individuals with disabilities are able to access the care they require.”

The 3 percent withholding tax would have required all businesses receiving federal, state, and local government funding for products and services to have 3 percent of that payment withheld beginning Jan. 1, 2013.

This requirement would have impacted payment under general government contracts, as well as Medicare payments.