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Praise for Senate passage of repeal of 1099 reporting mandate

February 11, 2011

The U.S. Senate has approved a measure to repeal the burdensome 1099 reporting mandate included in the health care law. Last year, the Small Business Association of Michigan brought this issue to Michigan U.S. Sen. Debbie Stabenow and reminded her how important repeal is to our members. Sen. Stabenow offered an amendment to the reauthorization of the Federal Aviation Administration, which was the vehicle through which repeal was considered. The vote on the Stabenow amendment was bipartisan with 81 voting in favor and 17 voting against.

The Stabenow amendment repeals Section 9006 of the health care law, passed last year, which expands the requirement to submit 1099 tax filing forms for business expenses to include all transactions that total $600 or more per vendor per year. The provision would impact businesses, family farms, churches, charities and local governments.

Keep in mind that the Senate vote to repeal the 1099 provision is just the first step along the way to getting rid of this small business nightmare. On the House-side, Rep. Dan Lungren’s (R-Calif.) legislation (H.R. 4) would repeal the provision without any financial offset. It already has enough cosponsors to pass the House. The Ways and Means Committee, headed by Michigan Rep. Dave Camp, intends to move 1099 repeal legislation through the committee soon so that it can be sent to the floor and voted upon.

President Obama mentioned repealing the provision during his State of the Union address, saying the requirement that businesses submit to the Internal Revenue Service a report of any transaction adding up to $600 in business in a year would be an “unnecessary bookkeeping burden on small businesses.”

While it is not yet time to celebrate, 1099 repeal passing the Senate is a very important first step. As always, the Small Business Association of Michigan will keep you up to speed on this issue as it progresses.

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