U.S. Senate Votes to Repeal Onerous 1099 Reporting Requirement

Posted by Brian Gilmore on Feb 4, 2011 12:02:00 PM

The United States Senate voted 81 to 17 Wednesday to repeal a provision of the health reform law that would have required businesses to file 1099 tax forms for every vendor that sold them more than $600 worth of goods and services.

1099Massachusetts Senators John Kerry and Scott Brown both supported an amendment sponsored by Democratic Senator Debbie Stabenow of Michigan that would do away with the expanded 1099 reporting requirement and pay for the repeal with unspent appropriated funds, or already appropriated money from various federal agencies, as directed by the Office of Management and Budget.

The repeal amendment, tacked onto a reauthorization for the Federal Aviation Administration, won the support of all Senate Republicans and 34 Democrats.

The measure is expected to encourage the House of Representatives to move forward with similar legislation – dubbed HR4 - that has attracted 263 co-sponsors. The list of sponsors includes two members of the Massachusetts delegation, Representatives Barney Frank and Nikki Tsongas.

The 1099 mandate, due to take effect in 2013, would require more than 30 million U.S. companies that currently only have to tell the IRS the value of services they purchase from vendors to also report the value of goods and merchandise they purchase. Lawmakers added the 1099 reporting footnote to the federal health reform bill in an effort to fund a portion of the massive overhaul.

Associated Industries of Massachusetts believes the provision would saddle employers with significant administrative and accounting expense at a time when many are already struggling with the soft economy.

“Massachusetts employers commend Senators Kerry and Brown for supporting a common-sense amendment that will head off an estimated 2000 percent increase in 1099 paperwork for employers. We appreciate the sponsorship of Representatives Tsongas and Frank and urge the House to repeal the mandate as soon as possible,” said John Regan, Executive Vice President of Government Affairs at AIM.

Topics: Senator John Kerry, U.S. Senate, Associated Industries of Massachusetts, Health Care Reform, AIM, Senator Scott Brown

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