CONGRESS REPEALS 1099 TAX REPORTING PROVISIONS

On April 5, the Senate voted to repeal the health care overhaul’s 1099 tax reporting requirements; the House of Representatives earlier repealed the provision. The Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011 repeals the expanded 1099 reporting requirement in the Patient Protection and Affordable Care Act. The requirement would have made nearly every business-to-business transaction reportable to the Internal Revenue Service. While the provision would have raised $19 billion to help pay for health reform, under its specifics, business owners would have had to file a tax reporting document for all vendors from which they buy $600 worth of goods or services within a year.

Major E&S industry associations actively supported repealing the 1099 requirement. The National Restaurant Association lobbied the Senate with the backing of 49 state restaurant associations and provided testimony from operators about the overwhelming challenges of the provision. It also rallied grassroots action to urge Congress to overturn the requirement. The Foodservice Equipment Distributors Association and the Manufacturers’ Agents Association for the Foodservice Industry were among industry groups that also urged repeal of the provision.

“Today’s vote is a victory for thousands of restaurant operators and small business owners who don’t have large administrative staffs to handle recordkeeping and reporting responsibilities,” said the NRA’s Scott DeFife.

President Barack Obama is expected to sign the bill despite concern about how to replace the money the provision would have raised.