An S-Corp is exempt from backup withholding on a W9 form. The backup withholding box on the W9 form is required for individual taxpayers and not businesses or corporations.

Anyone who properly reports their name and Social Security number while using the Form W-9, whose information matches IRS records, and those who have not been noticed by the IRS that they are exempt from backup withholding are exempt from backup withholding.

When a person, such as an employer, makes payments to another person, they must withhold and then pay a specified percentage of this payment to the Internal Revenue Service (IRS). This is called backup withholding. These payments have conditions set by the IRS, and there are many variables regarding what type of payments backup withholding can apply to. Backup withholding payments can apply to most payments that are reported on an IRS Form 1099. These can include interest payments and payments by brokers, as well as royalty payments. Other payments may include dividends, patronage dividends if at least half the payment is in money, rents, and profits. Commissions, fees, or payments for work undertaken as an independent contractor may also be liable to backup withholding.

If by expanded withholding tax you mean "backup withholding" applicable to only certain people/Cos (especially foreign), yes. I've never hear of the term you used.

Backup withholding is an investment term. Essentially, it means federal income tax that is withheld by a bank when it does not have the account holder's Social Security number on file.