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The White House, Republicans and a majority of Democrats agree that the 1099 mandate must be repealed?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

Senate Vote Today on Repeal of Massive 1099 Reporting Mandate

The United States Senate will vote today to repeal or keep intact the massive new paperwork burden that was included in the new health care law. Section 9006 of the "Patient Protection and Affordable Care Act" requires all businesses to file a 1099-Misc for vendor payments that exceed $600 or more annually. Small business owners are rightly outraged by this new mandate, and are urging Congress and the President to repeal it. The Senate will have an opportunity to do so when it votes on the small business lending and jobs bill today.

Senator Johanns's Amendment fully repeals the mandate, and SBE Council has urged all Senators to support his measure. Meanwhile, Senator Nelson offered a competing amendment that only serves as a partial "fix" at best while raising taxes on energy companies -- which means small business owners will get hit with higher prices. SBE Council will KEY VOTE the Johanns Amendment as a vote for small business in our Ratings of Congress.

Here are portions of SBE Council's KEY VOTE letter that was sent to all U.S. Senators this morning:

Dear United States Senator:

The Small Business & Entrepreneurship Council (SBE Council) strongly urges you to vote for the only Amendment to the “Small Business Jobs and Credit Act of 2010” that will fully relieve small business owners of a costly paperwork nightmare. The Johanns Amendment (SA 4596) will fully repeal expanded 1099-Misc reporting as mandated by Section 9006 in the “Patient Protection and Affordable Care Act” (PPACA).

The Johanns Amendment is the only pro-small business vote. SBE Council will KEY VOTE the Amendment as a vote for small business America in our forthcoming Ratings of Congress.

The Nelson Amendment (SA 4595) unsuccessfully tries to address a small portion of the problem. In fact, it complicates 1099 reporting even further than Section 9006. The Amendment also imposes a tax hike on energy companies, which will eventually make its way down to small firms in the form of higher prices. So, with the Nelson “fix”, not only will our nation’s small business owners remain burdened with a costly paperwork nightmare, they will also get hit with higher energy costs and added 1099 complexity beyond what Section 9006 mandates.

Small business owners are struggling to keep their doors open. The have done all they can to keep every employee on payroll. Revenues are weak and they have little confidence that the economy will get better. They are furious that Congress continues to pile on with new mandates and taxes that will further rob them of their precious time and capital.

If you have listened to small business owners over the congressional break, you know where they stand on this issue – full repeal of Section 9006. I urge you to vote for the Johanns Amendment.

Please call your U.S. Senators and demand that they vote for full repeal! Call them at 202-225-3121 and tell them to vote for the Johanns Amendment as it is the only solution to this pending paperwork nightmare.

Karen Kerrigan, President & CEO