Congress Fails In Effort To Repeal 1099 Provision In Health Care Law

NU Online News Service, Nov. 30, 3:47 p.m. EST

WASHINGTON–Property and casualty trade groups urged Congress to keep trying after the Senate failed late Monday to pass legislation that would repeal a tax reporting provision of the health care reform law.

The provision, which the Independent Insurance Agents and Brokers of America called "burdensome" on small businesses, will require businesses that spend $600 or more with a vendor to file a 1099 form with the IRS starting in 2012.

The effort to repeal the provision failed due to parliamentary procedures and the fact that the legislation, as proposed, did not fill the gap of $12 billion in expected revenue over five years that would be lost by repealing the provision.

Both Democrats and Republicans agreed in floor debate that the rule should be changed.

But, the Senate twice was unable to get the 67 votes needed.

Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, said Monday that he and Sen. Mike Johanns, R-Neb., have agreed to work out a compromise designed to facilitate repeal the provision.

"We're obviously disappointed that the amendments weren't passed," said Matt Brady a spokesman for NAMIC.

"With broad support for repeal on both sides of the aisle, eliminating these burdensome requirements is something that Congress can do right now to ease the concerns of small-business owners across the country."

He added that "actions speak louder than words, and there is no better time than now for Congress to repeal the impending 1099 requirements."

Leonard Brevik, executive vice president and CEO of the National Association of Professional Insurance Agents, voiced "disappointment" with the Senate failure to pass legislation concerning the provision.

He said the expanded reporting requirement "places an onerous burden on small businesses, including independent insurance agencies."

However, Mr. Brevik said, "We are optimistic that repeal will be successful–perhaps during the lame-duck session–in part because of the overwhelming support in the Senate."

Charles Symington, IIABA senior vice president of government affairs, said the "mountain of paperwork required of small businesses to comply with this burdensome new provision will divert resources and prevent investment in job growth and business expansion at a delicate point in the American economy."