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National Restaurant Association - 1099 paperwork mandate headed for House vote

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1099 paperwork mandate headed for House vote

Restaurateurs are one step closer to helping repeal a new federal law that requires businesses to file many more 1099 tax forms with the IRS starting in 2012.

The enhanced 1099 information-reporting mandate has generated huge controversy since Congress passed it as part of the health care reform bill last March. Restaurateurs and other business owners say it will drown their operations in paperwork.

Yesterday, the House Ways & Means Committee voted to repeal the additional 1099 reporting -- a critical first step in bringing the measure to the House floor. The Senate voted last month to repeal the new 1099 mandate, but all eyes are on the House because all revenue bills need to start in the House. The House could take up the bill in March.

The mandate requires businesses to use 1099 forms to report all cash/check payments of $600 or more in a year to vendors, contractors and business partners who supply products and services. An NRA member who operates a small restaurant in Arvada, Colo., told the House Small Business Committee this month that he'll be tracking payments to 200 to 300 vendors if the measure takes effect.
 
There's one major sticking point: Since the 1099 mandate is expected to raise more than $20 billion, lawmakers need to agree whether and how to replace that money if they repeal the mandate. In a sign of the complicated debate on the issue, the House committee yesterday passed two measures: one without any offsetting revenues and a second that pays for 1099 repeal by modifying another part of the health care law.

The NRA continues to press Congress to repeal the new 1099 requirements as soon as possible.

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