A top Democrat in the Senate plans to introduce legislation to kill a provision in the new health care law mandating that businesses file tax forms on transactions of more than $600.
Max Baucus (D-Mont.), chairman of the Senate Finance Committee, announced Friday (Nov. 12) that he would introduce repeal legislation in response to small-business owners who have complained that the reporting provision would be a costly burden and a paperwork nightmare.
“I have heard small businesses loud and clear and I am responding to their concerns,” Baucus said in a statement.
At stake is the provision in the health care bill that requires businesses and tax-exempt organizations to file 1099 forms for any transactions they have with suppliers that are cumulatively worth $600 over the course of a year.
Its intention was to ensure greater tax compliance and raise an estimated $17 billion in revenues over 10 years to help cover the cost of expanding health care to the uninsured.
The small business community reacted positively to the statement from Baucus.
"Since SBE Council has been leading the charge to repeal the onerous 1099 mandate included in ObamaCare, it's very positive that Senator Baucus recognizes the need to repeal this provision,” said Ray Keating, chief economist of the Small Business & Entrepreneurship Council. “Of course, it is important that the mandate be repealed for all businesses and that there be no related efforts to hike taxes. This should be about relieving burdens placed on the entire business community, and not about picking and choosing who benefits, or adding to the tax burden."
“The Affordable Care Act has tremendous benefits for small businesses, particularly the tax credits and health insurance exchanges,” said John Arensmeyer, CEO of Small Business Majority. “However, the 1099 provision, which would require small businesses to file a 1099 form for the purchase of goods and services over $600, would put an onerous burden on them — forcing them to spend an inordinate amount of time filling out paperwork instead of doing business.”
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Reach BusinessNewsDaily senior writer Ned Smith at email@example.com. Follow him on Twitter @nedbsmith.