WASHINGTON, D.C. – U.S. Sen. Sherrod Brown (D-OH) today voted to cut red tape for Ohio’s small businesses by supporting a repeal of the 1099 tax reporting requirements included in the health care reform law.
“Small businesses create nearly two-thirds of all new American jobs. This bill will help cut unnecessary red tape for these companies, which are the engines of our economic recovery,” Brown said. “For firms with fewer than 20 employees, the per-employee cost of complying with the tax code is already $1,304. But under the 1099 requirement, those costs would skyrocket. Repealing 1099 will ease the paperwork burden allowing Ohio’s small businesses to focus on expanding operations and hiring workers.”
The “1099” provision would have required businesses to file a form 1099, starting in 2012, for all third-party vendor payments over $600. While most businesses report and pay taxes on miscellaneous income in good faith, filing the form 1099 would address the failure of some businesses to do so—a tax loophole that increases the deficit by billions of dollars each year.
Sen. Brown heard from many Ohio small business leaders who were concerned about the potential burden and compliance costs created by the 1099 reporting requirements. As a result, in January 2011, Brown cosponsored bipartisan legislation to repeal the 1099 reporting requirement. Brown was an original cosponsor of a similar bill when it was introduced in November 2010. In September 2010, Sen. Brown voted for an amendment offered by Sen. Bill Nelson to raise the minimum reporting threshold to $5,000.