An amendment offered by Sen. Mike Johanns (R-Neb.) to repeal the expansion of information reporting requirements contained in the Patient Protection and Affordable Care Act (PPACA) Sept. 14 failed in the Senate 46-52. A competing amendment offered by Sen. Bill Nelson (D-Fla.) that would have exempted businesses with fewer than 25 employees and raised the reporting threshold also failed 56-42.
Under PPACA, beginning in 2012, businesses will have to file a Form 1099 to all vendors, both incorporated and unincorporated, to which they pay more than $600 annually for both goods and services. This is a shift from current law that requires a Form 1099 to be filed only for services from an unincorporated vendor for which the cost totals $600 or more.
In a letter sent Sept.13 to all members of the U.S. Senate, ABC urged the passage of Johanns’ amendment and opposed Nelson’s amendment.
“ABC opposes Sen. Nelson’s amendment as it only partially repeals the increased Form 1099 mandate,” the letter stated. “However, Sen. Johanns’ amendment fully repeals the small business/1099 reporting requirement, which would be extremely helpful to all small businesses and provide relief for small business to spur economic growth and recovery.”
ABC also pointed out that a 2005 study released by the Office of Advocacy showed that federal regulations cost small business 60 percent more to comply with than it would cost a company employing 500 or more employees.
“In this current economy, it is critical for the Senate to consider many small business initiatives to further reduce the burden and provide relief for small businesses,” the letter stated.
For more information on Form 1099 reporting, visit ABC’s
dedicated page.
For more information on tax issues, visit ABC’s
online tax toolkit.