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Matt Brady

Matt Brady
Public Affairs Director
Federal Affairs

Telephone: 202.580.6742
mbrady@namic.org

Lisa Floreancig

Lisa Floreancig
Public Affairs Director
State Affairs

Telephone: 317.876.4246
lfloreancig@namic.org

Senate Fails to Approve Amendment that Would Repeal Burdensome 1099 Requirements in New Healthcare Law

As we last reported, when Congress returned for the lame duck session, they had another opportunity to fix the mistake that was made in the rush to pass a healthcare bill – clearly without many being familiar with everything that was in it. Senate Finance Committee Chairman Max Baucus, D-Mont., honored his pledge and introduced an amendment to the food safety legislation that would repeal the 1099 reporting requirement, saying it would stifle job creation and stall economic recovery, and his sentiments have been echoed by President Obama as well as House Speaker Nancy Pelosi, D-Calif. Additionally, Sen. Mike Johanns, R-Neb., offered a similar amendment. Unfortunately, both amendments failed to reach the 67-vote threshold needed to consider each provision. According to Senate Health, Education, Labor, and Pensions Committee Chairman Tom Harkin, D-Iowa, the food safety bill’s manager, said that adoption of either 1099 amendment would effectively kill the bill, because revenue measures must originate in the House. Senate leadership typically circumvents this rule by substituting the language of their legislation into a House-passed bill, but Democratic leadership did not do that in this case.

The onerous 1099 reporting requirement was contained within the healthcare legislation passed into law earlier this year. This is a highly controversial tax provision that would place undue new burdens on already struggling American businesses. Under the new law, any business expense to a single vendor totaling more than $600 for the year will require the filing of a 1099 form with the Internal Revenue Service starting in 2012. Instead of filing just for expenses paid to unincorporated entities, the new law would apply to everyday business expenditures like phones, internet providers and office supplies. The last thing that our nation’s businesses need is the expense of more red tape from Washington.

Prior to the elections, we activated our grassroots network to weigh-in with Congress before adjourning for the mid-term elections. Additionally, NAMIC joined a cross-industry coalition and sent a letter expressing the concerns of a wide group of businesses and organizations. However, although there appeared to be broad bipartisan opposition to this provision, they failed to repeal it.

NAMIC continues urging lawmakers to take up this issue as soon as possible. We will continue to keep pressure on those in the House, Senate, and Administration until to the 1099 provision is repealed.

Please direct questions to Marliss McManus.

Posted: Tuesday, November 30, 2010 1:22:03 PM. Modified: Friday, January 07, 2011 3:31:49 PM.

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