The House of Representatives today voted overwhelmingly by a 314-112 margin to scrap a widely-panned new tax-reporting burden that more than 175 small business organizations have asked Congress to repeal.
Buried deep in section 9006 of last year's sweeping health care reform law is a requirement for businesses to complete 1099 tax forms for most business-to-business transactions above $600 in a calendar year.
For many businesses, this means hundreds of new pieces of paperwork to fill out, and according to the Small Business Administration, the cost of complying with the new tax code is 66 percent higher for small business than for large business.
"As a former small business owner for nearly 22 years, I understand well the frustration that job creators nationwide feel toward this onerous provision," Rep. Walden said. "Small businesses should be focused on business expansion and job creation, not devoting precious limited resources to additional tax filing."
In fact, the 1099 reporting mandate is so overbearing that the IRS ombudsman has determined that the agency is ill-equipped to handle all the resulting paperwork.
"Repealing the 1099 requirement removes a huge new tax compliance burden on small businesses and reduces the deficit by $166 million over the next ten years," Rep. Walden said. "I hope the Senate acts quickly to send this commonsense legislation to the President."
The bill repealing the 1099 mandate is H.R. 4, the "Small Business Paperwork Mandate Elimination Act."
"Exhibit A for why taxpayers demanded reform'
The 1099 provision was slipped into the health care reform law, which was infamously written behind closed doors and rushed to a vote with little public scrutiny.
"This is the kind of junk that makes it into a bill when you write it behind closed doors and rush it to a vote," Rep. Greg Walden (R-Ore.) said. "It's Exhibit A for why taxpayers demanded a reform to the way Congress does business and more transparency in the nation's capital."
"Through the Transition Team that I led, we were able to deliver on our promises in the Pledge to America to add more transparency and openness to the legislative process. Damaging provisions like this wasteful 1099 reporting requirement are exactly what we can avoid with a careful, open, and transparent process," Rep. Walden said.