Today, Congressman Scott Murphy (NY-20) released the following statement after the vote on his bill, H.R. 5982, which would have eliminated the 1099 provision in the health care bill and closed tax loopholes for corporations who ship jobs overseas:
"Unfortunately, some of my colleagues feel that we should protect corporations who are shipping jobs overseas instead of fighting for our small businesses. This bill would have eliminated the 1099 reporting provision and closed tax loopholes for corporations who ship jobs overseas. This would have removed financial and regulatory burdens on small business that would potentially stifle private sector growth and cost our small businesses jobs. As a small businessman, I know that private industry, not the government, is key to our economic recovery. I will keep fighting for small businesses because they will always be the job creation engine in America."
The House failed to pass the measure 241-154. Congressman Murphy spoke on the House floor in support of his legislation. To view the video, please click here.
Organizations and business owners across the 20th District had voiced their support of the bill:
"At a time when our economy needs small businesses to help our country grow out of this recession, saddling them with expensive new requirements and paperwork burdens will only further hamper their ability to aid in our economic recovery," said Susan Eckerly, Senior Vice President of National Federation of Independent Businesses. "Small businesses need certainty and H.R. 5982 will take immediate steps to eliminate this new burden."
"The new 1099 reporting requirement would have created a tremendous burden on small businesses so we appreciate Congressman Murphy's leadership to push for its' repeal. For most small businesses in these times, they need to spend every waking hour focusing on making their business successful. The costs in time away from their business to comply with this new standard was excessive and we're pleased to see that this problem is being fixed quickly," said Todd Shimkus, President of the Southern Saratoga Chamber of Commerce.
"We support Congressman Murphy's efforts in cutting unnecessary burdens and taxes on small businesses in this down economy and extremely competitive environment. Each cut adds up to a big difference over time," said Todd Erling, Executive Director of the Hudson Valley Agribusiness Development Corp.
"I want to thank Congressman Murphy for fighting for our small businesses," said Kenneth Flood, Executive Director of the Columbia Economic Development Corporation. "Many small businesses in Columbia County called my office concerned about this provision which would have put one more barrier to doing business in upstate New York. Anything that Congress can do to help keep jobs here, we support."
"The last thing small business owners need to spend more time on is collecting and submitting more information for the government, when what we need them spending their time on is growing their businesses and creating jobs," said Garry Douglas, President of the North Country Chamber of Commerce. "We thank Congressman Murphy for understanding this fact and for taking the lead in reversing the new 1099 reporting requirements for small business."
Gordon Boyd, Owner of Energy Next said, "Scott obviously understands that any amount of time we save on year-end reporting is time we can spend helping our customers and growing our business. It is so refreshing to have someone in Congress who understands that an owner's time is just as important as any other cost."
"The 1099 provision needs to be eliminated. It's going to create more regulations and more red tape that we just don't need. As a small businessman, there's only so much that they can continue to pile on top. Expecting each small business to be able to file these forms each year is just useless paperwork. I want to thank the Congressman for his work on this really important issue," said Kevin Preston, an electrician from Schenevus in Otsego County.
Congressman Murphy has used his background as a small businessman to fight for small businesses by consistently supporting increased lending and voting to lower taxes and extend tax relief for all Upstate New York small businesses. This signature legislative initiative is critical to helping reliving businesses from burdensome regulation and allowing them to innovate.
Scott Murphy's H.R.5982 would eliminate the 1099 reporting provision, a critical undue tax reporting burden for small businesses. This bill also it helps our small business compete by closing tax loopholes for corporations who ship jobs overseas. By closing tax loopholes for corporations who ship jobs overseas, we can remove significant financial and regulatory burdens on small business that would potentially stifle private sector growth and cost our small businesses jobs.
Eliminating Burdensome Reporting
* Starting in 2012, businesses will be required to file information returns with respect to any person (including corporations) that receives $600 or more from the business in exchange for property and merchandise. Furthermore, businesses will be required to file information returns with respect to corporations that receive $600 or more in exchange for services or other determinable gains. The bill would provide relief for small businesses by repealing these requirements before they take effect.
* As written, the current law requires small businesses to collect Taxpayer Identification Numbers (TIN) as well as company information for each purchase they make. While this may be possible for large companies with sophisticated accounting systems, this will add a significant administrative cost burden to small businesses that do not currently have the capacity to track every purchase. This provision threatens to place a significant undue burden on law abiding small business, hindering economic growth with very little evidence that it would achieve the result the government intends.
Closing Tax Loopholes for Companies Taking Jobs Overseas
* This bill eliminates tax breaks for companies that ship jobs overseas. This bill ends the current foreign tax "split" practice. Currently foreign tax taxpayers are permitted to claim foreign tax credits with respect to foreign taxes paid on income earned offshore. Taxpayers have devised several techniques for splitting foreign taxes from the foreign income on which those taxes were paid. With these techniques, the foreign income remains offshore and untaxed by the United States, while the foreign taxes are currently available in the U.S. to offset U.S. tax that is due on other foreign source income.
* Limits the use of the hopscotch rule for foreign tax credit planning. U.S.-based multinational companies typically have complex foreign structures designed to mitigate their worldwide tax expense. In many cases, these structures include companies located in tax havens such as Bermuda and the Cayman Islands, in a multi- tier chain of subsidiaries. If a foreign subsidiary with a relative high tax expense distributes a dividend up through a chain of companies, the foreign tax credit on the dividend ultimately received by the U.S. shareholder is a blend of the tax rates of each foreign subsidiary in that chain. If there is a tax-haven company in that chain, the U.S. tax due on the dividend may be significantly higher than the tax would have been if the foreign subsidiary's dividend could have simply "hopscotched" over the chain as a direct distribution to the U.S. shareholder.