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Monday, November 29, 2010

Bloomberg:Repeal of Health Law’s ‘Onerous’ Business-Expenses Rule Fails

Repeal of Health Law’s ‘Onerous’ Business-Expenses Rule Fails

The U.S. Senate failed today to adopt language that would have repealed a rule, created by the health-care overhaul law, requiring businesses to report annual expenses to individual vendors in excess of $600.
Eliminating the mandate, known as the 1099 rule after an Internal Revenue Service form used by businesses, would have reduced U.S. tax revenue by more than $19 billion over the next decade. Two amendments that would have repealed the requirement were rejected today; two similar measures failed in September.
Senator Max Baucus, a Montana Democrat who is chairman of the tax-writing Finance Committee, and Senator Mike Johanns, a Nebraska Republican, sponsored today’s competing amendments, which would have been attached to a food-safety bill.
Under the Senate rules for consideration of the amendments, 67 votes were needed for passage. The Baucus measure, voted down 44-53, would have done away with the reporting requirements that were part of the health-care overhaul enacted in March. Johanns’s language, rejected 61-35, would have repealed the 1099 requirement and also would have required the White House to cut federal spending by $39 billion.
Both provisions would have resulted in $19.3 billion less in taxes collected through 2020, according to a preliminary analysis issued Nov. 19 by the congressional Joint Committee on Taxation and provided by Steve Wymer, a spokesman for Johanns.
The U.S. Chamber of Commerce and the National Association of Manufacturers, both based in Washington, and the Nashville- based National Federation of Independent Business supported repeal of the 1099 rule, saying the requirement would be cumbersome for business owners.
‘Onerous Data Collection’
“This mandate, if not repealed, will force more than 40 million entities, including governments, nonprofits, and both small and large businesses, to comply with onerous data collection and IRS information filing burdens,” Bruce Josten, the chamber’s executive vice president for government affairs, wrote in a letter sent to senators before the vote today.
President Barack Obama has said he would be willing for the expense-reporting requirement to be abolished. His remarks came during a news conference Nov. 3 after his Democratic Party suffered losses in the midterm congressional elections.
To contact the reporter on this story: Jeffrey Young in Washington at jyoung89@bloomberg.net.
To contact the editor responsible for this story: Adriel Bettelheim at abettelheim@bloomberg.net

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