U.S. Senate Passes 1099 Repeal; Sends Measure to President

Posted by Christopher Geehern on Apr 5, 2011 2:09:00 PM

Employers in Massachusetts and elsewhere will not face onerous new 1099 tax reporting requirements now that the U.S. Senate has passed and sent to President Barack Obama a repeal of the controversial health-care reform provision.

1099 repealSenators voted 87-12 today to repeal the controversial law that would have required businesses beginning in 2013 to file 1099 tax forms for every vendor that sold them more than $600 worth of goods and services. Both Massachusetts senators – Democrat John Kerry and Republican Scott Brown – supported the measure.

President Obama has expressed concern about the funding portions of the repeal but is expected to sign it.

The Senate vote apparently spares 38 million businesses, charities and non-profit organizations from a bureaucratic nightmare that some experts estimate would have increased paperwork by 2,000 percent. Associated Industries of Massachusetts has strongly supported repeal of the provision, which would have saddled employers with significant administrative and accounting expense at a time when many are already struggling with the soft economy.

“AIM and its member employers commend Senator Kerry, Senator Brown and their colleagues for taking a stand against a regulation that would have placed an intolerable burden on millions of small companies across the country. We urge President Obama to sign the repeal,” said Richard C. Lord, President and Chief Executive of the Association.

Today’s Senate vote approved an earlier version of the 1099 repeal approved by the House of Representatives on March 3.

The 1099 filing requirement was projected to raise nearly $25 billion over the next decade by ensuring that vendors pay their taxes. Now, the money will be made up by changing another part of the health care law, requiring more families to repay tax credits designed to help them cover insurance premiums, if their incomes increase beyond certain levels.


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

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

Both Massachusetts Senators, Two House Members, Back Tax Compromise

Posted by Brian Gilmore on Dec 17, 2010 1:50:00 PM

Both U.S. Senators from Massachusetts and two members of the Bay State’s House delegation this week supported a compromise $801 billion tax package that will help employers by extending the federal research and development tax credit and a provision that would allow businesses to write off their investments in equipment.

Tax BillSenators John Kerry and Scott Brown were joined by Representatives William Delahunt and Niki Tsongas in voting for the measure, which will extend for two years the Bush-era tax reductions and add 13 months of unemployment benefits. The remaining members of the Massachusetts Congressional delegation – Representatives Michael Capuano, Barney Frank, Stephen Lynch, Edward Markey, James McGovern, Richard Neal, John Olver and John Tierney – were opposed.

President Barack Obama, who developed the compromise package with Congressional Republicans, is expected to sign the bill as early as today.

Richard C. Lord, President and Chief Executive Officer of Associated Industries of Massachusetts, noted that extension of the Bush tax cuts will provide additional capital to the many Massachusetts business owners who operate as subchapter-S corporations and pay the personal income tax rate.

“The president and Congress deserve tremendous credit for passing legislation that will stimulate job growth and advance the economic recovery here in Massachusetts,” Lord said.

The federal research and development tax credit is a complex incentive that can amount to 20 percent for companies that existed during the 1980s and ratchet down to 7 percent for companies founded later.  The credit has been a sort of orphan among economic stimulus measures – it has never been made permanent, has lapsed four times and been renewed more than a dozen times.

Both the R&D credit and the expensing provisions benefit key sectors of the Massachusetts economy. Durable goods make up almost $24 billion of the $34 billion in gross domestic product generated by Massachusetts manufacturers, while a recent study by AIM and the University of Massachusetts underscored the importance of research and innovation in allowing Bay State defense contractors to triple the value of their business in the past 15 years.

Topics: Senator John Kerry, U.S. Senate, Associated Industries of Massachusetts, AIM, U.S. Congress, U.S. House of Representatives, Taxes, Senator Scott Brown

Senate Puts Brakes on Paycheck Fairness Act

Posted by John Regan on Nov 17, 2010 3:43:00 PM

The U.S. Senate today put the brakes on the so-called Paycheck Fairness Act, which would have unleashed a mountain of litigation against employers working in good faith to provide opportunity to all employees.

Paycheck Fairness ActA 58 to 41 vote in favor of taking up Paycheck Fairness fell two votes short of the votes needed to break Republican opposition to the measure. Massachusetts’ two Senators split their votes, with Republican Scott Brown opposing the bill and Democrat John Kerry supporting it.

The House of Representatives approved the measure last year.

The legislation would allow unlimited punitive and compensatory damages in cases of suspected pay discrimination. Employers of all sizes would be exposed to increased litigation and a spate of frivolous class-action suits even when they act with a reasonable belief that their pay policies are lawful.

Associated Industries of Massachusetts President and Chief Executive Officer Richard C. Lord commended Brown for voting against a bill that would benefit trial lawyers more than workers.

“We believe that existing laws protect workers from gender discrimination while allowing employers the freedom to adopt competitive business practices to retain and attract employees. Expanding punitive damages will not prevent actual instances of discrimination; instead it will encourage the filing of claims to the benefit of plaintiffs’ attorneys,” Lord said.

AIM opposes the Paycheck Fairness Act because:

  • It would remove the Equal Pay Act caps on punitive and compensatory damages and would apply punitive damages to all cases.
  • It would also eliminate a key justification for pay disparities by requiring that any difference in pay be substantiated as a “business necessity.” Additionally, these defenses would have to be based on “bona fide” factors and would prevent employers from paying employees in different localities different rates.
  • It would make it easier for plaintiffs’ attorneys to file class-action suits against employers by requiring participants to “opt-out” of equal pay class-action suits. Currently, claimants must “opt-in” to suits if they wish to be part of the class.
  • It would require that the government collect information on employee wages and other data. This would also enable confidential salary information to be publicly shared with employees’ coworkers, competitors and others. In addition, the bill would allow the Equal Employment Opportunity Commission (EEOC) to require employers to report sensitive wage information that may be publicly disclosed.

An editorial in today’s Boston Globe called the Paycheck Fairness Act “too broad a solution to a complex, nuanced problem.”

“But what if a company offers a higher salary for retail workers in a more dangerous location, and more men sign up? What if a male worker leverages a job offer into a higher salary? Should these be illegal acts?” the editorial asked. 


Topics: Senator John Kerry, Paycheck Fairness Act, Associated Industries of Massachusetts, AIM, Employment Law, Senator Scott Brown

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