D.C. Hotline: The 1099 fiasco
When the health care reform debate raged earlier this year, House Speaker Nancy Pelosi made this comment: “But we have to pass the [health care] bill so that you can find out what is in it.”
Those words have come back to haunt business owners.
According to Section 9006 of the 2,409-page Patient Protection and Affordable Care Act, all businesses will be required to send 1099 tax forms to every company or individual from which they purchased more than $600 in services and goods throughout the tax year, beginning Jan 1, 2012.
The new requirements will dramatically increase costs, pulling capital out of businesses that could better be used to reinvest in the business and create jobs.
Fortunately, Rep. Dan Lungren (R-Calif.) has introduced the Small Business Paperwork Mandate Elimination Act (H.R. 5141). The bill helps small businesses by repealing the expensive and burdensome new tax paperwork requirement included in the health care reform law that mandates businesses issue 1099s for virtually every business-to-business transaction. Support for the passage of this bill is crucial to preventing a flood of paperwork and costs to business owners across the country.
Jeremy Stine is manager of government and public affairs for the NLBMDA (dealer.org).