Senate Defeats Efforts To Adjust Reform Law’s Tax-Reporting Provision
On Tuesday, the Senate voted down two amendments to a small-business aid package bill that would have scaled back or completely repealed a tax-reporting mandate in the federal health reform law, Politico reports (Haberkorn, Politico, 9/14).
The tax-reporting provision, which will 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.
Many business groups are opposed to the requirement because they believe that it would add more burdensome reporting requirements to business practices at companies that already are struggling (California Healthline, 9/14).
An amendment (S 3578), sponsored by Sen. Mike Johanns (R-Neb.), that would have repealed the entire requirement failed, 46-52. Another amendment, sponsored by Sen. Bill Nelson (D-Fla.), to raise the reporting threshold to $5,000 and exempt companies with fewer than 25 employees failed 56-42. The measure needed 60 votes to pass (Bolton, The Hill, 9/14).
The Democratic amendment -- which the Obama administration endorsed earlier this week -- would have been offset by eliminating a tax break for gas and oil companies, a plan that Republicans rejected (Levey/Mascaro, Los Angeles Times, 9/15).
Seven Democrats voted in support of the Johanns amendment, while three Democrats voted with Republicans in opposition to the Democratic amendment (Haberkorn/Kliff, "Pulse," Politico, 9/15).
Begich, Landrieu Introduce New Proposals
Following Tuesday's votes, Sen. Mary Landrieu (D-La.) introduced a new proposal that mirrored a portion of the failed Democratic amendment.
Landrieu's proposal would raise the IRS reporting requirement for businesses from $600 to $5,000. Landrieu noted that with "a year and a half to fix [the 1099 provision]," Democrats and Republicans should work together to reach a consensus and a decision on how to pay for her proposal (The Hill, 9/14).
Meanwhile, Sen. Mark Begich (D-Alaska) filed a new amendment to completely repeal the reporting requirement, which would be paid for with surplus federal economic stimulus funds. Although the proposal drew support from three Democrats -- Sens. Debbie Stabenow (Mich.), Claire McCaskill (Mo.) and Ben Nelson (Neb.) -- its prospects are unclear because Senate Majority Leader Harry Reid (D-Nev.) indicated that he is not accepting any more amendments ("Pulse," Politico, 9/15).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.