The contractor legislation, sponsored by Rep. Jason Chaffetz (R-Utah), would prohibit federal agencies from awarding work or grants to corporations and individuals with “seriously delinquent tax debt,” meaning those who have been hit with a tax lien.
The measure, which passed by a vote of 424-0, now moves to the Senate for consideration.
“This bill is a common sense way to ensure that we prioritize law-biding taxpayers above those who are skirting their legal duty to pay taxes,” Chaffetz said in a statement on Wednesday. “It is antithetical to use taxpayer resources to fund contractors who aren’t fulfilling their own tax responsibilities.”
The federal-worker bill, also sponsored by Chaffetz, failed to win support from two-thirds of the House, as required for passage under a procedural rule. Nonetheless, a majority of the Republican-controlled chamber backed the measure in a 266-160 vote after a contentious floor debate.
The legislation would have allowed agencies to fire employees who owe back taxes, in addition to barring the government from hiring tax-delinquent job applicants.
Democrats said the bill unfairly targeted the federal workforce, which historically has a lower delinquency rate than the overall taxpayer population. Rep. Elijah Cummings (D-Md.) has also argued that the government would have a harder time collecting debt from individuals who lose their jobs.
About 4 percent of civilian federal employees owed more than $1.1 billion in back taxes in 2014, representing the highest dollar amount in the past 10 years, according to recent data from the Internal Revenue Service.
The IRS has not yet released 2014 data for the general public, but the rate in recent years was between 8 percent and 9 percent.