IRVING, Texas — The Electronic Security Association (ESA) is backing President Obama’s support of revoking a reporting measure it deems harmful to small business owners. Obama raised the issue during his State of the Union address on Tuesday.
The 1099 reporting requirement was passed within the health care legislation last year. Beginning in 2012, all businesses will have to fill out a 1099 form, reporting all goods and services dealings worth more than $600. Failure to report such transactions will result in the company being taxed by the federal government. The provision would raise $19 billion over 10 years to help pay for the cost of health care reform.
“Anything can be improved,” Obama said. “We can start right now by correcting a flaw in the legislation that has placed an unnecessary bookkeeping burden on small businesses.”
ESA believes the measure will give small business owners more paperwork and expenses that they can’t afford during tough economic times. The association’s government relations team has been lobbying Congress to have the provision repealed.
Both Democrats and Republicans in Congress have supported repealing the language.
Rep. Dan Lungren (R-Calif.) presented H.R. 4, the Small Business Paperwork Mandate Elimination Act of 2011 to repeal the requirement. The measure has 258 co-sponsors and House Republicans have signaled that it will be one of their first pieces of business.
Similar bills have also been introduced in the Senate. Sen. Mike Johanns (R-Neb.) presented S. 18, which has 55 co-sponsors. If approved, it would repeal the provision while providing an offset for the $19 billion by rescinding $39 billion in unused, non-required funds from all accounts.
Senate Finance Chairman Max Baucus (D-Mont.) and Senate Majority Leader Harry Reid (D-Nev.) have introduced S. 72, an identical measure to Lungren’s bill.
Lawmakers failed to reach an agreement and pass a bill revoking the requirement before the end of the 111th Congress, despite bipartisan support.