1099 Requirement Yet Another Burden on America’s Small Businesses

Mar 04, 2011
Frankly Speaking

Buried within the more than 2,000 page health care law passed by the former Democratic majority and current administration, one of the dozens of mandates included in the legislation had nothing to do with improving the health care in this country.  This mandate–a new 1099 form expansion–requires businesses to issue a 1099 form for payments of goods and services that exceed $600 per year. This requirement creates an overwhelming amount of paperwork that would hinder the overall effectiveness of every business and reduce potential growth.

Some small business owners who deal exclusively with vendors would be hit particularly hard.  Under this law, any business or professional practice that purchases supplies, professional services or contractor services valued at more than $600 annually will have to issue the supplier a 1099 form. In other words, every time your company spends more than $600 at Office Depot or on an air conditioning repair bill in one year’s time, that business must issue a 1099.  According to a National Federation of Independent Small Business Survey, tax paperwork is the most expensive paperwork burden placed on small businesses by the federal government, costing a whopping $74 dollars/hour. Our nation’s small businesses do not have their own in-house accounting departments to handle an unreasonably high volume of paperwork. This time-consuming and costly mandate creates extra hours and extensive paperwork that will cost all small business owners precious time, energy and resources they could otherwise be using to create jobs.

It is irresponsible to hinder the American people and small businesses with burdensome requirements at any time, much less during our current economic crisis. The first vote taken by the new House majority in the 112th Congress was to repeal the health care bill.  Unfortunately, that bill did not come close to passing the Senate, and moving forward, we are forced to dismantle this misguided law piece by piece. I look forward to working with my colleagues on measures that will genuinely help American workers and their families, and allow employers to focus on job creation.

Frank Lucas represents Oklahoma’s Third Congressional District in the United States House of Representatives.  For more Frankly Speakings, please visit Rep. Lucas’ Blog at https://lucas.house.gov/frankly-speaking.

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