House OKs 1099 repeal

On March 3, U.S. House members voted 314-112 to repeal a new tax rule the Owner-Operator Independent Drivers Association says will burden its members.

Contentious bi-partisan debate preceded House approval of the Small Business Paperwork Mandate Elimination Act, sponsored Rep. Daniel Lungren (R-Calif.).
Starting in 2012, companies would have to file a Form 1099 on every business which they spend at least $600 a year. Congress reacted to the new law with a flurry of bipartisan bills for repealing language contained in Section 9006 of the Patient Protection and Affordable Care Act.

On March 1, the Obama administration agreed the new requirement is “too great a burden.” But it is against the approach Congress has for paying for the repeal, which would result in tax increases on middle-class Americans, according to the White House statement.

On Feb. 17, the Senate passed the Federal Aviation Administration Air Transportation Modernization and Safety Improvement Act, or S. 223. It included an amendment to eliminate the 1099 requirement, introduced by Michigan Democrat Sen. Debbie Stabenow.

Todd Spencer, executive vice president of the Owner-Operator Independent Drivers Association, said that left unchanged, the law will create an undue paperwork burden for owner-operators. Spencer submitted testimony favoring the repeal to the House Small Business Committee’s Feb. 9 hearing on the issue.

Annually, owners of one truck will make at least 100 fuel purchases for $600 or more from 50 or more fuel vendors. They also deal with many businesses for equipment maintenance, with each purchase usually exceeding $600, Spencer said.

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