As this blog has reported, tucked deep in Section 9006 of the “Patient Protection and Affordable Care Act” is a requirement that all businesses file a form 1099 with the Internal Revenue Service and furnish taxpayer identification numbers for every vendor involved in a business-to-business transaction or series of transactions that exceed $600 in a year. Moreover, if a business cannot furnish TINs for every vendor, the business must then withhold the taxes due and remit them to the IRS.
This new law, scheduled to take effect in 2012, is a substantial new burden on franchisees and franchisors. Political leaders of all stripes–from President Obama to former speaker Pelosi to current Speaker Boehner–agree that it was an unintended consequence of the 2010 health care reform law and have vowed it’s repeal.
On Tuesday, April 5, 2011–tomorrow–the United States Senate will consider and vote upon H.R. 4–the House-passed form 1099 repeal bill. The Senate will also consider an amendment to H.R. 4 proposed by Senator Robert Menendez challenging the “offset” necessary to enact repeal. Both the bill and the proposed amendment need 60 votes to pass. If the bill is passed and the amendment defeated, the bill will go to the President, who has generally indicated his support for the repeal of the form 1099 law, if not this specific bill. If the bill and amendment are passed, the bill will need to go to conference committee.
If you are concerned about the requirements of the Section 9006, NOW is the time to contact your Senators and urge a vote in favor of H.R. 4.