Repeal of Form 1099 Reporting Requirements Gains Momentum - Action Still Needed

The massive healthcare bill enacted in March contained a provision that requires government, nonprofits and businesses of all sizes to file Form 1099s with the IRS when goods or services purchased without a credit card from another business exceed $600 in a year.  Currently, a Form 1099 filing is required only for services-not goods-provided by self-employed independent contractors.  The provision was justified as a way to identify businesses that are not reporting or underreporting income to avoid paying their fair share of taxes.  The Congressional Budget Office estimated that the provision would raise $17 billion to offset a small portion of  the healthcare bill,  but AGC members know the increase in paperwork and compliance costs will be a tremendous burden on their businesses. AGC supports full repeal of the provision rather than a modification, which is why AGC supports the Small Business Paperwork Mandate Elimination Act.  The House considered legislation prior to the August recess that would have repealed the provision; however, the bill ultimately failed.  The Senate is scheduled to vote on two amendments to a small business jobs bill when they return next week: one that would repeal the provision (Senator Mike Johanns), and one that would modify the provision (Senator Bill Nelson).  Because the proposed modification would not repeal the 1099 requirement, but would instead put in place new exemptions, AGC does not believe the amendment would provide adequate relief for businesses. AGC continues to request members write their Senators and Representative in support of the Small Business Paperwork Mandate Elimination Act and in support of a full repeal of the burdensome 1099 reporting requirement.  For more information on the 1099 reporting requirement and to write your Members of Congress, use the AGC Legislative Action Center.