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Member, Beacon International Group, Ltd.
WASHINGTON (Reuters)—Bowing to pressure from business groups worried about an avalanche of paperwork, the U.S. Senate voted Tuesday to rescind the Form 1099 tax reporting requirement included in last year's health care overhaul law.
With bipartisan support, the Senate voted 87-12 to pass legislation sponsored by Sen. Mike Johanns, R-Neb., that repeals a requirement for businesses and landlords to file a Form 1099 document with the Internal Revenue Service for purchases of goods and services exceeding $600 a year.
The tax filing requirement did not directly relate to health care but was intended to help pay for the health care law that is considered one of President Barack Obama's top legislative achievements.
The legislation earlier was passed by the House of Representatives and now goes to President Obama, who is expected to sign it into law.
It was approved in Congress despite concerns by some Democrats to the way the $22 billion cost to the U.S. Treasury of repealing the tax reporting provision is covered.
The bill adjusts the health insurance tax subsidies to be given to middle-income people under the health care law. It would require anyone who receives excessive tax subsidies for health insurance to pay back a greater share than currently required under the law.
The Form 1099 reporting provision was meant to improve tax compliance and help pay for the health care law. But small firms and the self-employed complained it would bury them in paperwork.
Lawmakers in both parties agreed that the tax reporting requirement should go.
But some Democrats argued that the payback provision for excessive subsidies would discourage individuals and small businesses from complying with the law's requirement that they obtain health insurance.
WASHINGTON—The U.S. Senate has approved legislation that would repeal the health care reform law requirement that employers furnish 1099 statements whenever they do more than $600 in business with a corporate vendor.