KEY VOTE ALERT: 1099 Repeal in the U.S. Senate (AGAIN!)

Well, we are at it again. Supporting another legislative measure to repeal the nightmarish and much reviled 1099 reporting mandate in the new health care law.

SBE Council sent a KEY VOTE letter today to all U.S. Senators urging their support for the Johanns Amendment (#161) to the small business research legislation that is being debated in the Senate. The amendment will repeal Section 9006 of the Patient Protection and Affordable Care Act (PPACA) – a reporting mandate that will vastly increase costs and paperwork burden, while compelling small business owners and individuals to devote significant time and resources on tedious compliance tasks rather than productive work.

SBE Council will KEY VOTE the Johanns Amendment for our Small Business Ratings of the 112th Congress. A vote for the amendment is a vote for our nation’s entrepreneurs.

Another amendment offered by Senator Menendez may also be considered. This merely studies the issue, which would prolong uncertainty and force small business owners to expend resources in preparation for potential compliance in the future. Small business owners oppose anything less than complete, immediate and certain repeal of Section 9006 of the PPACA. Therefore, SBE Council will KEY VOTE the Menendez amendment as a vote against small business.

As SBE Council noted in our letter to all U.S. Senators:

"The expanded 1099 reporting provision in the PPACA mandates that small business owners file a 1099-MISC to the Internal Revenue Service (IRS) for all payments made to vendors totaling $600 or more in a tax year. Does it really take a government study to understand the obvious burden this will place on small business owners?

"As the SBA Office of Advocacy has found in its research, small firms are disproportionately impacted by federal regulation. In the case of tax compliance, these costs are 67 percent higher for small firms than for larger businesses.

"SBE Council surveys of member companies found that the mandate will increase the paperwork burden by more than 1000 percent for some firms, while accounting costs will double and quadruple in many cases. Business owners report that they will cut jobs, raise prices and be forced to devote more of their personal time to mind-numbing paperwork, which means their energy, passion and expertise will not be focused on growing their firms."

There may be a chance that the Senate moves to "deem passed" the House-passed bill (H.R. 4), which also repeals expanding 1099 reporting on rental property that was included in the "small business jobs act" passed in September of last year. This would be fabulous, as the legislation would then quickly move to the President's desk for his signature.

Let's repeal this thing!

Karen Kerrigan, President & CEO

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