Ways and Means schedules mark up of 1099 provision
Monday, February 14, 2011
Ways and Means schedules mark up of 1099 provision
By Vicki Needham, The Hill
The House Ways and Means Committee will mark up on Thursday a
bill to repeal the 1099 provision included in the healthcare
law.
Congressional Democrats, Republicans and the White House are
backing the elimination of the burdensome provision that requires
businesses to report to the IRS annual purchases of goods and
services of more than $600 from each vendor.
The Senate recently approved an amendment to eliminate the 1099
provision to the Federal Aviation Administration reauthorization
bill on a broad bipartisan vote.
The House and Senate each tried to nix the provision last year
but Democrats and Republicans sparred over how to pay for the
approximately $22 billion loss in revenue.
The Senate's amendment sets aside $44 billion in unused,
previously appropriated funds to cover the repeal's cost.
President Obama's fiscal year 2012 budget still contains a
portion of the 1099 provision while eliminating the requirement for
goods but retaining it for services.
The proposal is expected to raise about $10 billion over 10
years.
The National Federation of Independent Business blasted the new
1099 proposal as a "bait and switch."
"We are disappointed that the president has not clearly heard
what small businesses are saying," NFIB senior vice president of
Federal Public Policy Susan Eckerly said in a statement. "We at
NFIB remain committed to helping the president and Congress
understand the needs of small business as the budget process moves
forward."
An administration official said the scaled-down proposal isn't
as controversial as the healthcare reform law provision and has
been proposed in the past.
Still, the administration's budget proposal has tax attorneys
scratching their heads; the president himself criticized the
healthcare law's reporting requirement in his State of the Union
address and the Senate has already voted to repeal it. The Ways and
Means Committee is due to mark up the House version of repeal
legislation on Thursday.
The White House's Office of Management and Budget explained the
rationale in its Analytical Perspectives.
"The administration recognizes the burden that this expanded
information reporting provision will put on small businesses and
proposes to repeal the provision," the document says. "Instead, the
administration proposes that a business be required to file an
information return for payments for services or for determinable
gains aggregating to $600 or more in a calendar year to a
corporation (except a tax-exempt corporation); information returns
would not be required for payments for property."
Julian Pecquet contributed to this story.