The Senate has approved a House-passed measure to repeal 1099 business reporting of small purchases from vendors sending the legislation to President Obama for his signature.
The 87 to 12 vote followed more than a year of complaints from farmers and small businesses that 1099 reporting, intended to help pay for health care reform, would create a nightmare of paperwork. The section of the health bill involved would have require millions of businesses to file tax forms for every vendor selling them more than $600 in goods each year, starting in 2012. The requirement was projected to raise nearly $25 billion over the next decade by ensuring that vendors pay their taxes.
Passage followed defeat of a Democrat amendment to repeal, but cancel repeal later if a study showed repeal would raise business health care costs and reduce employee coverage by recapturing unearned tax breaks.
Senator Mike Johanns, R-Neb., spearheaded the push for full repeal, saying that it would be a victory for millions of small business owners and a victory for common sense.
The U.S. Chamber of Commerce estimates 40 million business and non-profit entities would face the 1099 reporting requirement, which Johanns argued would take money away from job creation.
The former Ag Secretary argued that adding the study amendment would only delay passage again.
"This becomes a roadblock because we end up with a different House bill and a different Senate bill," Johanns said. "If this is such a great idea, attach the amendment to some other bill that's coming along and we can get the study done."
Sponsor of the amendment to the Johanns measure, Senator Robert Menendez, D-N.J., tried to convince colleagues they could vote for his amendment and repeal and the only change would be to what he called the risky offset and only if the study found it hurt small businesses after the repeal had taken place. The President is unhappy with the GOP offset to pay for repeal, but has not threatened a veto.
Colin Woodall, Vice President of Government Affairs for the National Cattlemen's Beef Association says this is an enormous victory for U.S. farmers, ranchers and small businesses.
"Placing burdens on entities that stimulate the economy is a step in the wrong direction," Woodall said. "Also, it is equally encouraging to hear that President Obama supports repeal of this provision. We encourage him to sign this bill immediately."
American Farm Bureau Federation President Bob Stallman says repealing the onerous Form 1099 requirement is great news for America's farm and ranch families. He says this was a costly, burdensome and unnecessary tax compliance requirement that was counterproductive to job creation and economic growth. Stallman also says that farmers, ranchers and small businesses are overloaded with paperwork, and AFBF is pleased that leaders in Washington took steps to provide relief.