Wednesday, December 01, 2010
1099 Repeal Fails in U.S. Senate … Again
The U.S. Senate on Monday rejected efforts to repeal the expanded 1099 reporting requirements that are set to take effect in 2012. The new requirements, which were part of the federal health care law, will greatly increase administrative costs for businesses, resulting in hundreds of millions of new 1099s to be filed.
Current law generally requires that a Form 1099 be filed for purchases of services over $600 during a calendar year – typically from small contractors and vendors. One of the mechanisms used to pay for the new federal health care law was an expansion of 1099 filing requirements to goods purchased, and purchases from corporations, starting in calendar year 2012. So, beginning in 2012, businesses will have to file a 1099 for every vendor that sells them more than $600 in goods.
Senators tried twice on Monday to repeal the 1099 requirement by adding amendments to the food safety bill. Sen. Mike Johanns (R-Nebraska) and Sen. Max Baucus (D-Montana) both introduced amendments. The Johanns amendment would have repealed the mandate and made up for the projected loss in revenue by requiring the Obama administration to make additional cuts. It came just six votes short of the necessary 67, failing 61-35. The Baucus amendment would have repealed the mandate, without provisions to offset the projected loss of revenue. It failed 44-53.
Maryland Senators Barbara Mikulski and Ben Cardin voted against the Johanns amendment and for the Baucus amendment.
The Maryland Chamber of Commerce and our business allies will continue to fight for repeal of the 1099 mandate before its 2012 effective date.
“During a time when America is counting on the business community to generate jobs and grow the economy, it is important that we not force small businesses to divert their precious time and resources to collect volumes of information and fill out mounds of new paperwork for the government,” Maryland Chamber President & CEO Kathy Snyder, CCE said.
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