H.R. 5297: Senate Nixes 1099 Fix

WASHINGTON BUREAU — The Senate today cleared the way for H.R. 5297, the Small Business Jobs Act bill, to reach the floor without changing a provision that could greatly expand Form 1099 reporting requirements.

Members voted 61-37 in favor of a cloture motion, or limit on debate, on the bill as a whole, which would revive a number of tax breaks that expired in December 2009. All Democrats and independents voted for cloture. Sens. George LeMieux, R-Fla., and George Voinovich, R-Ohio, also voted for cloture.

A Form 1099 amendment that was proposed by Sen. Ben Nelson, D-Fla., and supported by the Obama administration failed by a 56-42 vote. Supporters of the amendment needed 60 votes to invoke cloture and have it come up for a vote.

New Form 1099 reporting requirements are part of the Affordable Care Act, the legislative package that includes the Patient Protection and Affordable Care Act (PPACA). The requirements, set to take effect in 2012, are supposed to raise $18 billion in revenue over 10 years.

All businesses, tax-exempt organizations, and federal, state and local government entities would have to send 1099 forms to any vendor from whom they buy more than $600 in goods during a calendar year.

The Nelson amendment would have exempted firms with 25 or few workers from the reporting mandate and increased the reporting threshold to $5,000 for the other entities.

The Senate also voted 46-52 to reject an amendment by Sen. Mike Johanns, R-Neb., that would have repealed the new Form 1099 reporting requirements altogether.

The Johanns amendment would have paid for the repeal by diverting $11 billion from a new Affordable Care Act prevention and public health fund between now

and 2017. The fund is supposed to shore up anti-tobacco and obesity programs, public health departments, and organizations that provide health care in underserved communities.

The Affordable Care Act calls for the fund get $15 billion in appropriations between now and 2019.