Vol. XIX, No. 2, Spring 2011
By Congressman Bill Keating
When I began my term in Congress this January, I knew that the best way to represent my constituents was to listen to their opinions and concerns. One of the first things I heard was that the 1099 provision established by last year’s Affordable Care Act would be onerous for small business owners. According to that legislation, small businesses would be required to file a 1099 form every time they spent $600. The provision was to go into effect in 2012.
Small business owners throughout the South Shore, Cape and Islands echoed the sentiment that the 1099 provision would be extremely cumbersome. Some even went so far as to say it would be debilitating to their ability to efficiently operate their businesses.
The original intent of the 1099 provision was to act as a reporting requirement and assure that small businesses were paying for their employees’ health insurance. That obligation would be tracked by the 1099 forms submitted upon salary payment. Despite the intent, however, the provision—as written—was more far-reaching. It required all businesses that are not tax-exempt to file a 1099 return form with the IRS each time they spent $600 on anything during the calendar year.
My conversations with the small business owners in the district highlighted the heavy burden they would have to shoulder under that 1099 requirement. One business owner on the Cape told me that under the provision, she would have to file a 1099 form after every bad storm. She explained that storms on the Cape often knock down trees on her business property. The tree removal regularly exceeds the $600 threshold, thus triggering the 1099 requirement. In this economy, as small businesses struggle to survive—let alone increase profits and grow jobs—the answer cannot be more paper.
After hearing these very legitimate concerns, I returned to Washington and began working with colleagues across the aisle to remove this provision from the law. I’m pleased to report that this effort was successful and I’m proud to be listed as an original co-sponsor of the bill removing the 1099 requirement.
This legislation passed the House March 3 and the Senate April 5. As I write this, the bill was headed to the President’s desk. When you read this, it may already have been signed into law.
And that would be a good sign, because easing the burdens facing our small business community is critical for the economic health of the nation.