Monday, January 17, 2011
Momentum Building For 1099 Repeal
House Republicans are moving quickly to repeal the expanded 1099 reporting mandate that is set to take effect next year. Last week, they renumbered the bill as H.R. 4 (it had been H.R. 144) to signal that it will be among the first bills considered. The bill has 245 co-sponsors, including Maryland Reps. Roscoe Bartlett (R-Dist. 6), Andy Harris (R-Dist. 1) and Dutch Ruppersberger (D-Dist. 2).
The new mandate, which was part of the federal health care law, will greatly increase administrative costs for businesses. 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.
Congress attempted to repeal the mandate last year, but efforts failed. Senate legislation is expected to be introduced later this month. Bipartisan support appears to be growing, and the Obama administration has signaled its support for the repeal as well.
The Maryland Chamber will continue to fight for repeal of the 1099 mandate before its 2012 effective date.
