The Senate yesterday approved legislation to repeal a burdensome tax paperwork requirement that could cost small businesses – including many Realtors – thousands of dollars each year. The bill now goes to President Obama for his signature, which is expected.
A new rule was introduced under the Patient Protection and Affordable Care Act last year. It would have forced businesses to file an IRS Form 1099 for each vendor from whom they spend more than $600 in goods in any given tax year starting in 2012. Had that rule gone into effect, an independent Realtor who bought more than $600 of goods from any single vendor would have had to file out a new 1099. The annual $600 threshold applied to all vendors, so that businesses could find themselves sending out 1099 forms for such mundane purchases as coffee, fuel and office supplies.
A number of business groups, including the National Association of Realtors® and the National Association of Home Builders, fought aggressively to have the new tax law repealed, fearing the burden it would create for members. Rather than hiring additional workers to expand and grow, they said, small businesses would be spending money on accountants and bookkeepers just to keep up with the new requirements.
The Senate passed the Small Business Paperwork Mandate Elimination Act of 2011 (H.R. 4) 87 to 12; it passed the House earlier.
In addition to repealing expanded 1099 requirements, H.R. 4 also repeals a provision in the Small Business Jobs Act of 2010 stipulating that independent landlords as of Jan. 1, 2011, must submit 1099s to firms to which they give more than $600 for services.
Going forward, businesses will still have to comply with long-standing reporting requirements for the purchase of services.
Source: Florida Realtors®