1099 provision would especially impact small businesses
Jan 25 2011
WASHINGTON, D.C. – U.S. Senator Jerry Moran (R-Kan.) today joined U.S. Senator Mike Johanns (R-Neb.) in sponsoring legislation to repeal a costly and unprecedented tax reporting burden included in President Obama’s health care law. This provision will force all businesses, charities, and state and local governments to file separate “1099 forms” with the Internal Revenue Service (IRS) reporting all goods and services transactions valued at more than $600 in a given year. This new reporting requirement would apply to everything from office supplies and shipping costs to phone and internet services. The Small Business Paperwork Mandate Elimination Act, sponsored by Sen. Moran, would repeal this provision and prevent a massive new burden from being imposed on businesses.
“Small businesses and agriculture producers are the backbone of our economy, and Congress must foster an environment where they can grow and create jobs,” Sen. Moran said. “Before the health care law, businesses were required to file 1099s only in limited situations. The new health care law vastly expands this requirement and will bury businesses in paperwork by increasing 1099 filings by 2000 percent. This onerous mandate will substantially increase the price of doing business in an already challenging economic environment.”
According to the National Taxpayer Advocate, a division of the IRS, the 1099 provision of the health care law will impact as many as 40 million American businesses. Of that number, 26 million businesses are sole proprietorships, not counting farms. The Small Business Association estimates that small businesses have created more than 64 percent of new jobs nationally over the past 15 years. At a time when Washington is urging businesses to hire workers, the new 1099 requirements are a government-imposed obstacle to economic growth and job creation. If it is not repealed, the 1099 provision will take effect in 2012.
While in the U.S. House of Representatives, then-Congressman Moran sponsored H.R. 5141, the Small Business Paperwork Mandate Elimination Act, which also aimed to repeal the 1099 provision in President Obama’s health care law. He also introduced bipartisan legislation, H.R. 4779, the Small Business Jobs and Tax Relief Act, to deliver targeted tax relief to American small businesses. Then-Congressman Moran also repeatedly called upon the House Ways and Means Committee to schedule hearings on tax reform, in order to reduce the growing tax burden on small businesses. Sen. Moran will continue to be a strong advocate for removing obstacles of job creation for small businesses and agricultural producers in the U.S. Senate.