In an Open Letter sent to the U.S. House of Representatives today, SBE Council called on members to advance clean repeal of the new 1099 reporting mandate without increasing taxes on entrepreneurs and the economy. The latest idea floated by House Democrat leaders would increase taxes on carried interest, a policy long opposed by SBE Council.
[To read the Open Letter, please click here.]
In the letter, I noted that the idea to “pay for” repeal of expanded 1099 reporting with a tax increase on carried interest is “particularly troublesome.”
“SBE Council and our members cannot support a measure that provides relief to small business owners on the one hand yet causes great harm to the economy and entrepreneurship on the other. It’s clear that increasing taxes on carried interest is a bad deal for our nation’s economy. Congress needs to be focusing on policies that allow businesses of all sizes to prosper and innovate to better position these firms to hire, compete and grow,” I wrote.
As BusinessTrends Blog readers are well aware, the expanded 1099 reporting mandate was included in the Patient Protection and Affordable Care Act (PPACA). The measure (Section 9006) requires all businesses to file a 1099-MISC form with the Internal Revenue Service (IRS) for vendor transactions that total $600 or more on an annual basis. Many small business owners report that they will have to file hundreds, if not thousands, of 1099 forms as a result of the new paperwork mandate.
Of course, SBE Council is pleased that there is bipartisan support to repeal the onerous 1099 mandate. However, repeal efforts should not be paired with highly unpopular or controversial measures that ensure defeat from the start as I noted in my letter: “We believe there is a path to Section 9006 repeal that does not sacrifice incentives and tools that fuel our nation’s innovative, entrepreneurial and job creating capacity. However, fixing the 1099 burden by imposing new costs on entrepreneurs or enacting measures that do further damage to our frail economy are non-starters.”
Various efforts in the House and Senate to repeal Section 9006 have come up short even though both political parties want a solution. Our "Stop 1099” campaign and petition where thousands of small business owners have urged Congress to repeal Section 9006 of the new health care law continues to pick up momentum, and we feel confident that this new mandate will be repealed!
Karen Kerrigan, President & CEO