- The U.S. Senate passed an amendment offered by Sen. Debbie Stabenow, D-Mich., to repeal a burdensome recordkeeping requirement for small businesses in a bipartisan vote of 81-17.
- Called the ‘1099 requirement,’ this IRS regulation would require small business owners to file an IRS form 1099 for each vendor from whom they make purchases of $600 or more. Many small business owners and national associations have advocated for the repeal of this provision.
Rep. Lungren (R-Calif.) introduced H.R. 4, the Small Business Paperwork Mandate Elimination Act of 2011, to repeal form 1099 information reporting requirements. The legislation has 263 cosponsors.
Two bills have been introduced in the Senate: 1) S. 72 introduced by Sen. Baucus, D-Mont., has 19 cosponsors and is a companion to the Lungren bill and 2) S. 18, Small Business Paperwork Mandate Elimination Act introduced by Sen. Johanns, R- Neb., has 59 cosponsors. The costs of the Baucus and Lungren bills are not offset. The Johanns’ bill is paid for by using unobligated stimulus funding.
After the bills were introduced, Sen. Johanns and Senate Agriculture, Nutrition & Forestry Committee Chairwoman Stabenow, D-Mich., filed amendments to the Federal Aviation Administration bill on the Senate floor to repeal form 1099 informational reporting requirements. Sen. Baucus did not file an amendment. The Johanns and Stabenow amendments both fully repeal 1099 and use unobligated funds as a “pay for.”
Sen. Stabenow indicated in an Agriculture Committee news release that, “The U.S. Senate today passed an amendment offered by Senator Debbie Stabenow to repeal a burdensome recordkeeping requirement for small businesses in a bipartisan vote of 81-17. Called the ‘1099 requirement,’ this IRS regulation would require small business owners to file an IRS form 1099 for each vendor from whom they make purchases of $600 or more. Many small business owners and national associations have advocated for the repeal of this provision. With respect to the vote, Nebraska GOP Senator Mike Johanns stated that, ‘I’m thrilled that after multiple attempts to repeal this burdensome mandate, the Senate has finally done the right thing in voting to repeal it,’ Johanns said.”
The measure now must be taken up by the House.
The NCC had joined other farm, livestock and commodity organizations in urging Congress to act to approve legislation to repeal the reporting requirements. Copies of the letters are available on the NCC’s website at http://www.cotton.org/issues/index.cfm. The same group letter that was sent to Sen. Johanns and Sen. Baucus also was sent to Sen. Stabenow. The NCC supported similar efforts last year.
Under current law, IRS Form 1099-Misc must be filed when a person engaged in a trade or business pays $600 or more to a non-employee for services performed during the calendar year. Rental payments are included in the reporting requirement but payments made to corporations are generally excluded. The business making the payment must provide a taxpayer identification number for each payee. A copy of the 1099 form must be furnished to both the person providing the service and to the IRS. Beginning in 2012, though, farms, ranches and other businesses would be required to complete an IRS Form 1099 for all payments including goods and services which total $600 or more in a calendar year to a single non-employee payee. Payments made to corporations will not be excluded from the reporting requirement.