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Proposed Small Business Paperwork Relief Act Would Repeal 1099 Reporting Requirements

Small businesses enjoying tax cuts this year might also experience less paper cuts. In an open letter to small business owners Karen Mills expressed her support of the Small Business Paperwork Relief Act,  a measure proposed by Montana senator Max Baucus to repeal a provision of the Affordable Care Act that requires small businesses to file a 1099 report for any transaction over $600.

Under Section 9006 of the Affordable Care Act, business owners will have to report their purchases from the local office supply store and other vendors on a 1099, starting with 2012 purchases and 2013 filings. Small business owners are not known for their paperwork filing skills, which might explain why the Small Business Administration is backing the proposed legislation.

Said Mills:

As President Obama said on Nov. 3: “… the 1099 provision in the health care bill appears to be too burdensome for small businesses. It just involves too much paperwork, too much filing. It’s probably counterproductive.” Our support for the Small Business Paperwork Relief Act also follows the Administration’s support in September for Senate Amendment 4595 (offered by Senator Bill Nelson), which would have relaxed the reporting requirement.

The Nelson amendment would have raised the minimum reporting requirement from $600 to $5,000 for businesses with 26 employees or more. Senator Baucus had spoken in favor of the amendment, which the Senate debated – and ultimately rejected – on September 14th by a vote of 56-42 in favor of the amendment, which needed 60 votes to pass.

Senator Baucus introduced the new bill on Friday, November 12. “Small businesses are the backbone of our economy, especially in Montana where we have more workers employed by small businesses than anywhere else in the country,” said the senator in a statement. ” Montana businesses need to focus their efforts on growing and creating good-paying jobs – not filing paperwork. “

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