The House on Thursday passed by a vote of 314-112, H.R. 4, the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011, legislation to repeal the new expanded Form 1099 tax reporting requirements under the Patient Protection and Affordable Care Act (PPACA) passed last year.

The Financial Services Institute (FSI), for one, has been lobbying to ensure repeal of the measure as the PPACA provision requires businesses to file Form 1099 tax reports with the Internal Revenue Service (IRS) for any expenses worth $600 or more.

David Bellaire, general counsel and director of government affairs at FSI, says that the 1099 requirements “would have imposed an extremely burdensome information reporting requirement on small businesses, including independent financial advisors whom we serve.” FSI, he said, “Was pleased that the House recognized that the reporting requirement couldn’t be justified by the limited utility that the Form 1099 filings would have provided.”

But Republicans and Democrats are now at odds on how to pay for the repeal. Rep. Sander Levin, D-Mich., chairman of the House Ways and Means Committee, along with Rep. Pete Stark, D-Calif., ranking member on the Committee’s Health Subcommittee, say the House Republicans’ bill would raise taxes on the middle class by $25 billion. Levin and Stark say the $25 billion tax increase would be levied on families of four earning less than $110,000 per year.

“This bill would saddle hundreds of thousands of middle-income taxpayers with a hefty tax increase. We all favor repealing 1099, but to do so on the backs of the middle class is irresponsible,” Levin said in a statement after the House vote. “With this legislation, Republicans continue their reckless overreach, this time by gouging middle-income taxpayers.”

The House bill has now been sent to the Senate, but it’s likely to meet opposition as the Senate passed its own version of 1099 repeal in early February. The Senate proposes to pay for the 1099 repeal by authorizing the Office of Management and Budget to identify “unobligated” federal funds.