The Official Online Weekly Newspaper of NAHB
President Obama on April 14 signed legislation supported by NAHB to repeal a burdensome tax paperwork requirement that could have cost small businesses thousands of dollars each year.
"During the past several months, NAHB led the effort along with other industry groups to strike all new expanded IRS Form 1099 reporting requirements for small businesses and owners of rental real estate," said NAHB Chairman Bob Nielsen.
"In testimony before Congress and in 'key vote' letters to House and Senate leaders, we spelled out how failing to overturn these rules would have killed jobs and placed a major paperwork and cost burden on home builders,” Nielsen said.
Under the Patient Protection and Affordable Care Act approved last year, starting in 2012 businesses would have had to file an IRS Form 1099 for each vendor from whom they purchased more than $600 in goods over the course of the year.
With the annual $600 threshold applicable to all vendors, businesses could have found themselves sending out 1099 forms for such mundane purchases as coffee, fuel and office supplies.
Rather than hiring additional workers to expand and grow, small businesses would have been spending money on accountants and bookkeepers in order to meet these new requirements.
On April 5, the Senate by a vote of 87 to 12 passed the Small Business Paperwork Mandate Elimination Act of 2011 (H.R. 4), legislation previously approved by the House.
In addition to repealing expanded 1099 requirements in the healthcare law, H.R. 4 also repealed an unfair provision in the Small Business Jobs Act of 2010 requiring independent landlords starting this year to submit 1099s to firms to which they give more than $600 for services.
Going forward, businesses will still have to comply with long-standing reporting requirements for the purchases of services.
To read the bill, click here and enter H.R. 4 in the box at the upper center of the page.
For more information, email J.P. Delmore, or call him at 800-368-5242 x8412.