NLBMDA applauds Senate's repeal of 1099 rules
The National Lumber and Building Material Dealers Association (NLBMDA) praised the actions of the United States Senate for passing the crucial 1099 Repeal Legislation. The Senate passed H.R.4, the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act without changing anything in the House-passed bill.
The bill now goes to the desk of President Obama.
"After a hard-fought, year-long battle on the 1099 legislation, today's vote is a huge victory for all LBM dealers across the country," said Scott Lynch, NLBMDA executive VP. "Thanks to all of the hard work from all of the NLBMDA members for really pressing this issue with their respective representatives and senators and to those who traveled to Washington last month for the NLBMDA Legislative Conference to make the case in person."
While the administration has not officially put out a statement on what President Obama will do, the President has said on more than one occasion that the 1099 mandate should be repealed. The NLBMDA urges President Obama to sign the repeal legislation, he said.
Under existing tax law, a business taxpayer making payments to a service provider aggregating to $600 or more for services in the course of a trade or business in a year is required to send an information return to the IRS (and to the service provider-payee) setting forth the amount, as well as the name and address of the recipient of the payment (generally on IRS Form 1099). Under the law, the business taxpayer is not required to issue a Form 1099 to a corporation that provides services to it.
The new healthcare reform law made two changes to those rules. The first is to require businesses to issue the Forms 1099 to corporations, as well as all persons in a trade or business. The second is to expand significantly the scope by requiring the issuance for payments made to "property" providers, as well as service providers. The changes were to take effect for payments made after Dec. 31, 2011.