The American Horse Council reports that on April 5, 2011 the Senate passed a repeal of the onerous new 1099 reporting requirement that was scheduled to kick-in in 2012. The House approved the same 1099 repeal bill (H.R 4), introduced by Congressman Lungren (R-CA), earlier this year. The President is expected to sign the bill into law in the next several days.
“We are glad Congress took action to head off what would have been a large increase in tax-related paper-work for horse businesses in 2012,” said AHC President Jay Hickey.
The new 1099 paperwork mandate was a provision of the health care bill passed last year that would have imposed burdensome new tax reporting requirements on every business in the U.S., including those in the horse industry, beginning in 2012. Current law requires 1099s to be sent to any independent contractor that receives $600 or more from a business in a year. The new provision would have required 1099s be sent not only to independent contractors but also to any individual or corporation from whom a business purchased a total of $600 or more in goods or services in the year.
The bill repeals only the new broader reporting requirements. Businesses will still have to send 1099s to independent contractors as current law requires.
“Repeal of the new 1099 requirement has had Presidential and bipartisan Congressional support once its full impact on businesses was realized,” said Hickey “However, during the last Congress disagreement over details got in the way of repeal. We are happy Congress prioritized getting this done before businesses were impacted in 2012.”