Repeal of the 1099 provision punted to next Congress

| 12/14/2010

U.S. Senate lawmakers will have to punt the IRS Form 1099 tax provision to the next Congress to figure out. If it stays on the books as a way to help pay for health care reform, the provision will require small businesses to file a 1099 form anywhere and everywhere they spend $600 or more in a given year.

Sens. Max Baucus, D-MT, and Mike Johanns, R-NE, both say they want the provision repealed. Each lawmaker has support, but they have not yet come to terms about how to replace the estimated $19.2 billion that the provision would otherwise generate and have now run out of time.

“The bottom line is that Congress is in a tight squeeze right now before the 111th Congress comes to a close,” said OOIDA Director of Legislative Affairs Mike Joyce.

“The 1099 provision doesn’t go into place until 2012, so absent an agreement between the Democrats and Republicans during the rest of the session, this is one of those issues that unfortunately gets punted into the next Congress.”

For truckers, the provision could mean filing an IRS Form 1099 for every fuel stop, repair services, parts providers, restaurants or other businesses where $600 is spent annually.

“We just want it repealed,” Joyce said.

“It’s important for OOIDA members to continue to do outreach to their members of the House and two members of the Senate. When the new Congress comes in, they’ll have a whole new set of lawmakers to impress their opinions on.”

Joyce says a repeal effort will likely include an offset – also known as a way to pay for it.

“If you’re repealing a provision in the IRS Tax Code that Congress passed in order to generate revenue to pay for a program such as the health care bill, you have to pay for it. You have to replace that revenue with something else,” Joyce said.