Friday, September 24, 2010

Senate rejects repeal of 1099 provision in health reform law

In a series of procedural votes, the Senate chose not to move forward on two amendments that sought to completely or partially repeal a tax reporting provision in the new health reform law.

Respective amendments offered by Sens. Mike Johanns (R-Neb.) and Bill Nelson (D-Fla.) each sought a different solution for paring down the reform law's 1099 provision, which in 2012 will require any business that purchases more than $600 worth of goods or services from another business to submit a 1099 tax form to the Internal Revenue Service.

The requirement is expected to save $17 billion over 10 years, but lawmakers and business groups have called for its repeal, claiming it would put a huge tax burden on small businesses. “Even the White House now admits they went too far and their mandate will hurt small businesses,” said Senate Republican Leader Mitch McConnell (R-Ky.).

Nelson, who had suggested exempting businesses with 25 or fewer employees from the requirement, argued that Johann's approach would “gut the reform bill” in order to pay for the repeal.

Neither amendment achieved the 60 votes necessary to proceed to a final vote for possible inclusion in the Small Business Jobs Act.

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