This week, Congressman Scott Murphy (NY-20) sent a letter to Majority Leader Steny Hoyer urging him to bring the Murphy bill to eliminate the 1099 reporting provision to the floor for a vote. The House failed to pass the measure 241-154, and Murphy requested that the bill be re-considered under normal rules as soon as possible.
"I'm calling on the Democratic leadership in the House to re-consider this vital legislation under normal rules as soon as possible," said Rep. Murphy. "This legislation would remove financial and regulatory burdens on small business that would potentially stifle private sector growth and cost small business jobs. As a small businessman, I know that private industry, not the government, will drive our economic recovery. I will keep fighting for them because they will always be engine of job creation in Upstate New York."
Congressman Murphy's bill received broad support from business leaders across the 20th District:
"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 Saratoga County Chamber of Commerce.
"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."
"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.
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.
The letter that Murphy sent to Majority Leader Steny Hoyer is below:
Dear Majority Leader Hoyer,
I am writing to request that H.R. 5982, the Small Business Tax Relief Act of 2010, be re-considered by the House of Representatives under normal rules.
The Small Business Tax Relief Act of 2010 would eliminate the 1099 reporting requirement, which will create a tremendous burden on small businesses. In addition, the bill will help American businesses be more competitive by closing tax loopholes for corporations who ship jobs overseas. This bill will remove financial and regulatory burdens on small business that will stifle private sector growth and cost our small businesses jobs.
On July 30, 2010, The Small Business Relief Act failed to garner the two-thirds majority required to pass the bill under suspension of the rules. It is unfortunate that some of our colleagues feel that we should protect corporations who are shipping jobs overseas instead of fighting for our small businesses. Yet, this bill has strong support both in Congress and throughout the nation. Therefore I respectfully ask that this legislation be re-considered under normal rules as soon as possible.
Member of Congress
Scott Murphy's H.R.5982 would eliminate the 1099 reporting provision, a critical undue tax reporting burden for small businesses. This bill will 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.