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Friday, March 04, 2011

Another Vote to Repeal 1099 -- Will the Paperwork Nightmare Ever Go Away?

On Thursday, March 3, "The Small Business Paperwork Mandate Elimination Act" (H.R. 4) passed in the U.S. House of Representatives by a vote 314-112 -- with 76 Democrats voting for the legislation. Below is SBE Council President & CEO Karen Kerrigan’s statement following the vote:

"The House, Senate and President Obama are all in agreement that the burdensome 1099 reporting mandate in the new health care law must go. There is no reason why full agreement cannot be quickly reached on the issue, and I hope today's House vote to repeal the costly 1099 reporting mandate adds momentum to efforts that deliver a bill to President's Obama desk. Small business owners are still waiting for signs that Washington 'gets it' and is listening to their concerns about burdensome regulations and costs that hurt their ability to grow, compete, and add jobs. But more than just listening, small business owners are looking for meaningful action, and repealing this nightmarish 1099 paperwork requirement would be a good first step in helping to build confidence among entrepreneurs."

H.R. 4 repeals Section 9006 of the Patient Protection and Affordable Care Act (PPACA), as well as expanded 1099 reporting for owners of certain rental property that was inserted into the "small business lending bill" last year. The expanded reporting provision in PPACA mandates that small business owners file a 1099-MISC form to the Internal Revenue Service (IRS) for all payments made to vendors totaling $600 or more in a tax year. Likewise, as passed in the small business lending bill, individuals that receive rental income are now required to distribute and file 1099s on payments made in excess of $600 annually.

Small business owners have expressed outrage regarding these onerous paperwork requirements, which will add significant costs to their operations. The U.S. Senate recently advanced repeal of Section 9006 in the PPACA only (not the rental income reporting mandate contained within the small business lending bill) as part of the Federal Aviation Administration funding bill (the Stabenow Amendment).

The White House, Republicans and a majority of Democrats agree that the 1099 mandate must be repealed? Will it happen? Remember, this is Washington, and even where there is bipartisan agreement on issues things just tend to take a long time. Or, action does not occur until our elected officials are forced to because of a looming deadline. Unfortunately, small business owners are going to have to continue to make calls, send letters and emails if they want this paperwork nightmare to be buried.

SBE Council staff post

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