The Senate voted 81 to 17 to repeal a small business tax reporting requirement strongly opposed by agriculture. The President has called for 1099 reporting repeal, 300 House members are co-sponsoring repeal, and the Senate vote kills the Health Care Act provision that forces businesses to fill out tax forms anytime they spend $600 or more a year with a single vendor.
Senate Ag Chair Debbie Stabenow, D-Mich., co-sponsored the successful Senate measure to undo the requirement.
"It would basically have required 40 million businesses to have a 2,000% increase in the number of forms that they would have to fill out," Stabenow said. "I want our businesses focusing on growing their businesses, hiring new people, being successful, not filling out more burdensome paperwork with the IRS."
Farm Bureau Tax Specialist Pat Wolff recently has said quick action is needed.
"The new reporting requirement is scheduled to kick in next year in 2012," Wolff said. "So if Congress doesn't repeal the initiative before then it means that farmers and ranchers and all businesses will have to start printing out and filing IRS forms that the IRS admits they can't process."
Wolff says the just-passed Senate amendment and a bipartisan House bill are similar, improving the chances for final passage. The government had hoped to use 1099s to raise $17 billion in tax revenue for health reform, money that would have to be made up with savings elsewhere.