Senate Could Soon Sign Off on Bills To Repeal 1099 Reporting Rule
On Wednesday, Senate Democrats could vote on an amendment to a small-business bill (S 493) that would repeal the 1099 tax-reporting provision in the federal health reform law and then use a procedural maneuver to consider an identical House measure (HR 4) as approved, National Journal reports (McCarthy, National Journal, 3/29).
Explanation of Tax Rule
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.
Federal analysts predicted that the provision would raise $19.2 billion in revenue over 10 years, but lawmakers and the White House consider it an undue burden on small businesses and have pressed for its repeal. However, lawmakers have been unable to reach a compromise on how to offset the revenue lost by repealing the provision (California Healthline, 3/10).
Latest Work on Effort To Remove Requirement
Earlier this week, the Senate was expected to participate in a largely symbolic vote of another House-approved 1099 repeal bill (HR 705). The vote would have meant little because no further progress could have been made on the repeal until the House considered the Senate's small-business bill, which it had no immediate plans to do (Kasperowicz, "Floor Action Blog," The Hill, 3/28).
If the Senate clears the amendment, it could use a "deem and pass" procedure to consider HR 4 as passed. Lawmakers could then send HR 4 directly to President Obama (National Journal, 3/29).
However, if they do not use the procedure, the two chambers would have to reconcile House and Senate repeal measures to decide the fate of the small business bill (Haberkorn, Politico, 3/30).
It is unclear whether Obama would sign HR 4. Although he supports repealing the 1099 provision, a Statement of Administration Policy released earlier this month criticized the bill's offsets (National Journal, 3/29).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.