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November 29 , 2010 AHC WASHINGTON UPDATE 1099 Reporting Requirement Amendments Fail Last night the Senate failed to approve either of two amendments to the FDA Food Safety Modernization Act that would have repealed the 1099 paperwork mandate. The amendments offered by Senator Max Baucus (D-MT) and Senator Mike Johanns (R-NE) both would have repealed the 1099 paperwork mandate. However, the Johanns amendment would have offset the projected cost of repeal with unused stimulus funds. The 1099 paperwork mandate was a provision of the health care bill passed earlier this year that imposes new tax reporting requirements, on every business in the U.S., including those in the horse industry, beginning in 2012. In September, Senator Mike Johanns (R-NE) offered a similar amendment that also failed. The AHC supports repeal of the 1099 reporting requirement. Background The Patient Protection and Affordable Care Act (“Health Care Bill”) that was signed into law earlier this year includes a provision broadly-expanding 1099 IRS form reporting requirements. Current law requires 1099s to be sent to any independent contractor that receives $600 or more from a business in a year. The new requirement expands that mandate to require that all businesses issue 1099 forms to any individual or corporation from whom they purchase a total of $600 or more in goods or services in the year. Its stated purpose is to identify unreported taxable income, fraudulent tax deductions, and increase tax compliance. This new requirement will greatly increase the administrative burden on all businesses, particularly small businesses, including those in the horse industry. For example if a horse farm buys $600 worth of hay and grain from a particular retailer, or purchases buckets and bridles for a total of $600 from a tack shop, or an event buys office supplies of $600 from a supply store over the course of the year, or an individual buys a computer for $700 from a local store, they are required to issue each a 1099 form that must be completed and returned to the IRS. This reporting mandate places an added burden on each business involved. The horse businesses would have to collect information and tax identification numbers for every entity they do $600 worth of business with and mail them forms and the business receiving the forms must complete them. This new requirement would impose a heavy administrative burden on small and large businesses.
It is expected that Both Senators Baucus and Johanns will continue to look for an opportunity to repeal the 1099 requirement. The AHC continues to support repeal of the 1099 reporting requirement.
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AHC Washington Update
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The American Horse Council keeps you up to date with electronic AHC Washington Update that reports on Congressional action and other important issues affecting the industry. The AHC Washington Update is a member benefit, and thus, is not intended to reproduction. For more information on federal legislation, equine health and regulatory issues, taxes, animal welfare, racing, recreation, and showing please visit our website at www.horsecouncil.org
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As the national association representing all segments of the horse industry in Washington, DC, the American Horse Council works daily to represent your equine interests and opportunities.
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