WASHINGTON (Sept. 14, 2010) The National Association of Mutual Insurance Companies (NAMIC) expressed significant concern in the wake of a Senate vote to maintain a costly provision of the healthcare reform law.
Sen. Mike Johanns, R-Neb. had proposed an amendment to legislation creating a small business lending fund that would have repealed the provision in the healthcare law that requires businesses and non-profit organizations to file a 1099 report with the Internal Revenue Service for any payment of $600 or more to a single vendor. The provision, Section 9006 of the healthcare law, is expected to raise roughly $17 billion in revenue for the federal government.
“This provision will significantly increase costs and bureaucratic red tape for businesses and charities across the country,” said Jimi Grande, senior vice president of federal and political affairs for NAMIC. “At a time when our economy is foundering, it’s troubling to see the Senate vote against this common-sense amendment. Instead, money that could be used to hire new employees or re-invest in a business will go to government coffers.”
Sen. Johanns proposed the amendment to legislation creating $12 billion in tax cuts to small businesses and establishing a $30 billion Small Business Lending Fund. The bill would allow businesses to write off up to $500,000 in capital investments and 50 percent of the cost of new equipment, and would also increase to $10,000 the tax deduction for small business start-ups. The Senate rejected a watered down version of the Johanns amendment that would have increased the reporting threshold to $5,000 by a 56-42 vote.
Businesses currently are required to file 1099 forms only for services supplied by unincorporated contractors. Under the healthcare reform law, these new requirements would also include vendors for routine business expenses like phone and fax, shipping costs, and office supplies.
“Only in Washington would you find the twisted logic that rejects the Johanns amendment, which provides a clear benefit to businesses and charities, from a bill designed to provide relief for small businesses,” Grande said.
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Posted: Tuesday, September 14, 2010 9:00:19 AM. Modified: Wednesday, September 22, 2010 1:18:24 PM.
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