Second Effort to Repeal 1099 Reporting Requirement Fails

Last week, a second attempt to repeal the Affordable Care Act’s expanded Form 1099 reporting requirement failed in the Senate. Democratic lawmakers wanted to piggyback the repeal to tax-cut legislation, but Republicans rebuffed the measure as part of their hard-line stance against legislative add-ons, as reported by Politico.

At present, businesses are required to file 1099 forms for purchases of services of $600 or more each year from unincorporated businesses, such as sole proprietorships, according to Medscape Medical News. The health care bill extends this requirement to cover purchases of property and goods in addition to services from all businesses, including corporations, MMN reported.

While both Democrats and Republicans criticized the expanded 1099 reporting requirement as too burdensome for businesses, each has different ideas about to how to repeal the provision. Sen. Max Baucus (D-MT) and Sen. Mike Johanns (R-NE) both introduced bills to repeal the expanded reporting requirement. While the Johanns bill sought to pay for the repeal by making up the $19 billion shortfall through unused stimulus funds, the Baucus bill did not include offsets, as reported by the American Society of Association Executives (ASAE).

Senate Democrats, including Baucus, wanted to add a repeal of the 1099 measure to legislation to extend tax cuts for individuals and businesses for two years, Senate aides told the Wall Street Journal. However, Republicans refused, arguing that, since the White House and Senate Minority Leader Mitch McConnell (R-KY) already had an agreement on the tax-cut legislation, adding provisions to the tax bill would slow down its passage.

It is expected that House Republicans will seek to repeal the 1099 reporting requirement next year, WSJ noted.