President repeals reporting provision 1099
As expected, President Barack Obama signed H.R. 4 into law on Thursday, April 14, 2011. The president previously had indicated he supported the bipartisan bill.
The Specialty Equipment Market Association (SEMA) says the law, which repeals the Form 1099 reporting provision, is good for small businesses.
Last week, Congress acted to repeal the costly 1099 reporting requirement included in last year’s health care law (see "TIA urges President Obama to sign H.R. 4"). Under the terms of the repeal, businesses will no longer be required to issue 1099 forms to all vendors from whom they buy more than $600 worth of goods or services in any year, beginning in 2012.
The requirement was intended to prompt vendors receiving 1099 forms to pay taxes on the income.
“Small businesses remain the most important economic engine driving America’s expanded recovery. Eliminating the 1099 reporting burden will allow our companies to focus on producing tangible goods and services rather than wasteful paperwork,” wrote SEMA CEO and President Chris Kersting in a letter sent to the White House asking President Obama to sign the bill into law.
“I was pleased to take another step to relieve unnecessary burdens on small businesses by signing H.R. 4 into law," said the president on April 14. "Small business owners are the engine of our economy, and because Democrats and Republicans worked together, we can ensure they spend their time and resources creating jobs and growing their business, not filling out more paperwork."
SEMA contended that the 1099 requirement would not only fail to generate much under-reported income, but also succeed in punishing businesses that already comply with United States tax law.
H.R. 4 was part of the Patient Protection and Affordable Care Act.
“Our members and all American businesses can rejoice, as the horrible 1099 reporting requirement is no more," says TIA Executive Vice President Roy Littlefield.
"I also want to thank our members, who took to the phones and their computers to let their representatives and senators know that this requirement must be repealed. When members support their association and get involved, great things can be accomplished.”