Small business groups are grumbling about the Senate’s failure to repeal a 1099 tax-filing rule that will create a mountain of paperwork when it takes effect in 2012.
Under the provision, the nation’s 40 million small businesses would be required to file a 1099 in 2012 for vendors that they’ve bought more than $600 in goods from during the year. The new filings for purchase of goods would be in addition to the 1099s currently required for the purchase of services. The law is designed to eliminate underreporting of income and is expected to raise about $19 billion in new taxes, which will be used to pay for health care reform. But critics contend small businesses are not well equipped to handle the mountain of paper work required.
John Arensmeyer, chief executive at Small Business Majority, is among those urging Congress to correct the problem by eliminating the new provision. “It time to put politics aside and get the job done now,” he said in a statement. “Only then will we be able to focus on implementing the ACA (Patient Protection and Affordable Care Act) and getting small businesses real relief from rising healthcare costs so they can get back to doing what they do best ”creating jobs.”