The U.S. House of Representatives on Thursday passed The Small Business Paperwork Mandate Elimination Act, H.R. 4, a repeal of the controversial provision in the new health care reform law that required business owners to file 1099 IRS tax forms to report on all transactions over $600. See the following article from The Street for more on this.
The U.S. House of Representatives voted overwhelmingly Thursday to repeal the controversial IRS 1099 reporting mandate.
The Small Business Paperwork Mandate Elimination Act, H.R. 4, passed 312-112, according to the office of California Congressman Dan Lungren, the Republican who wrote the bill drawing more than 200 co-sponsors.
"I am thrilled that H.R. 4 passed with such strong bipartisan support," Lungren said in a statement. "It is my hope that the Senate will pass this bill without delay. We need to finally provide assurance to small-business owners that they will not be subject to this unfair and unnecessary tax reporting burden."
The original provision, passed last year as part of President Barack Obama’s health care reform act, said that beginning in 2012 business owners would have to use 1099 IRS tax forms to report all transactions greater than $600 each year. Business owners and trade organizations said the rule would create too much paperwork for a small firm, and Obama called for the measure to be repealed in his State of the Union Address in January.
Claim up to $26,000 per W2 Employee
- Billions of dollars in funding available
- Funds are available to U.S. Businesses NOW
- This is not a loan. These tax credits do not need to be repaid
The bill repeals Section 9006 of the Patient Protection and Affordable Care Act as well as a requirement passed in the small-business lending bill in which people getting rental income must distribute and file 1099s on payments made in excess of $600 annually, according to the Small Business & Entrepreneurship Council.
The Senate version of the repeal legislation passed in early February. The versions pay for repeal in different ways, with the House version seen by Democrats as undermining health care reform, but now must be reconciled.
One issue highlighted by opponents of repeal is how revenue lost as a result would be made up. The staff of the Joint Committee on Taxation estimates repeal would "increase federal budget deficits by $21.9 billion over the 2011-21 period, reflecting reductions in revenues," according to a February report by the Congressional Budget Office.
"I hope today’s House vote to repeal the costly 1099 reporting mandate adds momentum to efforts that deliver a bill to President’s Obama desk," said SBE Council President and CEO Karen Kerrigan.
"Small-business owners are still waiting for signs that Washington ‘gets it’ and is listening to their concerns about burdensome regulations and costs that hurt their ability to grow, compete and add jobs," Kerrigan said. "But more than just listening, small-business owners are looking for meaningful action, and repealing this nightmarish 1099 paperwork requirement would be a good first step in helping to build confidence among entrepreneurs."
This article has been republished from The Street. You can also view this article at The Street, a site covering financial news, commentary, analysis, ratings, business and investment content.
