The Senate overwhelmingly approved on Wednesday an amendment that would repeal new and onerous 1099 reporting requirements.
The amendment, proposed by Senate Agriculture Committee Chairwoman Debbie Stabenow (D-Mich.), was added by an 81 to 17 vote to an unrelated bill reauthorizing the Federal Aviation Administration (FAA).
The 1099 requirements emanate from a provision in the recent health care reform law requiring businesses to issue a Form 1099 to every unincorporated service-provider they pay more than $600 during a tax year. Starting in 2012, businesses will also have to issue 1099s to incorporated businesses and goods-providers, meaning virtually every business transaction will be covered.
For small businesses like farms and ranches, this provision will dramatically increase the number of 1099s that need to be sent each year, adding to an already formidable stack of paperwork requirements producers must fulfill, which often means hiring someone or spending time away from core business operations.
Once the FAA reauthorization bill is approved by the Senate, it must go to the House of Representatives for consideration. Still, Wednesday’s vote is an important step forward to removing the 1099 requirements, which are almost universally opposed.
Despite popular support on the Hill and among constituents, two separate votes on amendments to ease the requirements, from Sen. Mike Johanns (R-Neb.) and Sen. Max Baucus (D-Mont.), failed at the end of the 111th Congress.
NAWG and coalition partners have written Members of Congress on this issue multiple times. In the latest letters, sent this week to Stabenow, Johanns and Baucus, NAWG and more than 25 other ag organizations said the requirements would certainly increase costs to small businesses like farms.
“The business of producing food, fiber and fuel is a hands-on venture where productivity and competiveness is compromised by government rules and regulations that turn producers into bookkeepers,” the groups said. “Prompt action is needed by Congress to reverse this onerous tax-reporting requirement.”
NAWG will continue to follow this issue and advocate for the 1099 requirements’ repeal as soon as possible.
To read the 1099-related letters sent this week and in the past, please visit www.wheatworld.org/othercorrespondence.