House Approves Repeal of Reform Law’s 1099 Tax-Reporting Provision
However, the Senate is unlikely to consider the House measure because of differences over how to offset the cost of a repeal, further delaying efforts to repeal the provision (Boles, Wall Street Journal, 3/3).
The tax-reporting requirement -- which is scheduled to take effect in 2012 -- requires businesses, not-for-profit groups and government offices to file 1099 forms with the Internal Revenue Service when they purchase $600 or more in goods or services from another business in a given year. The law previously required 1099 forms only for services above that amount. Federal analysts predicted that the provision would raise $19.2 billion in revenue over 10 years.
HR 705 would offset the cost of the 1099 repeal by changing a reform law provision to allow the federal government to recapture subsidy overpayments to consumers who purchase health coverage through state-based health insurance exchanges, regardless of whether the overpayments were made because of changes in income or by accident (Pear, New York Times, 3/3).
The Senate has passed an amendment attached to a Federal Aviation Administration bill that would repeal the tax-reporting provision. The Senate's version of the repeal would offset the cost of the repeal by requiring the Office of Management and Budget to rescind $44 billion in appropriated but unspent discretionary funds from various sources. The departments of Defense and Veterans Affairs and the Social Security Administration would be exempt from those budgetary rescissions (California Healthline, 2/3).
Because the House and the Senate repeal language involve different cost offsets, it is unclear how lawmakers will reach a compromise (Haberkorn/Kliff, Politico, 3/3).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.