The National Lumber and Building Material Dealers Association (NLBMDA) is urging its members to contact their senators this weekend in advance of votes on measures amending the health care reform bill to eliminate or alter what the association and other groups decry as an onerous burden on small businesses.
At issue is a section of the Patient Protection and Affordable Care Act that requires all businesses to send 1099 tax forms to every company or individual from which the business purchased more than $600 in goods and services starting in January 2012. "This expensive and burdensome new paperwork requirement has no connection to health care, but was included as an attempt to generate revenue--$17 billion over 10 years--on the backs of small businesses," NLBMDA said in an alert e-mailed Wednesday.
NLBMDA called on its members to push their senators to back an amendment being offered by Sen. Mike Johanns, R-Neb., that would repeal the provision. A vote on that measure could come as early as the week of Sept. 13, reportedThe National Underwriter, a publication covering the insurance industry.
The debate on Johann's proposal is complicated by the fact that Senate majority leader Harry Reid, D-Nev., and other members of the majority party are backing another idea. Their alternative, sponsored by Sen. Bill Nelson, D-Fla., would modify rather than repeal the provision by exempting credit cards from the reporting requirement, increasing the threshhold for reporting to $5,000 from $600, and exempting from reporting any firms that employ no more than 25 employees at any time during the taxable year. Inn addition, "non-troublesome" transactions like meals, airplane tickets, and hotel rooms also would be exempted from reporting, National Underwriter said.
NLBMDA dislikes the Nelson alternative. "While the amendment creates exceptions from the 'property' information return requirements, those exceptions do not apply to 'services' transactions," the association said. "This lack of clarity will force small-business owners to track expenses associated with both 'property' and 'services,' the amount spent on each, and the method of payment to determine what information must be reported on under the new law. Rather than clarify, the Nelson amendment actually creates even greater complexity for those seeking to comply with the law."
In constrast, "Passage of the Johanns Amendment is crucial to preventing a flood of paperwork and costs to businesses across the country," NLBMDA said. "It is the only amendment that fully protects business owners from this costly new burden."
A Washington Post article on the issue published Sunday said the Johanns amendment "may turn off Democrats because it would offset the cost by delaying use of a $15 billion fund for preventive health projects and allowing more people to opt out of buying health insurance." But it added that Nelson's alternative "is a deal killer for many Republicans and even Democrats because it stops short of repeal and offsets the cost by eliminating tax breaks for certain oil companies."