Shaheen co-sponsors 1099 expansion repeal

New Hampshire U.S. Sen. Jeanne Shaheen is part of a bipartisan group of six senators who have introduced a bill to repeal the controversial expansion of the Form 1099 reporting requirement due to take effect in January 2012.Buried in the massive Patient Protection and Affordable Care Act, signed into law in March, the legislation would require all businesses, tax-exempt organizations and federal, state and local government entities to issue a Form 1099 to all contractors and corporations for the purchase of $600 or more of goods or services by cash or check.For example, a home-based business owner buying $600 worth of office supplies from Staples would have to send a Form 1099 to the company beginning in tax year 2012.The 1099 expansion is intended to help pay for some of the federal government’s health reforms. Currently, any purchase of goods in general is exempt as is the payment of services to a corporation.Businesses had been reporting for years on the 1099 payment of $600 or more paid to contractors and freelancers, but expanding the ruling to include corporations and goods, opponents say, would cause a nightmare for not only small businesses and other organizations but for the Internal Revenue Service as well.The IRS has said purchases or payments made with a debit or credit card, however, would be exempt because the financial institutions processing these transactions would send the 1099.The Taxpayer Advocate Service, an independent organization within the IRS that assists taxpayers in financial straits, said the legislation could affect as many as 40 million businesses and other entities.”We need to make sure that small businesses, which are the engines of economic growth in New Hampshire, do not face unnecessary regulatory burdens in the future,” said Shaheen in a statement. “Removing this requirement is the right thing to do.”Backing the repeal effort with Shaheen are Sens. Scott Brown, R-Mass., Max Baucus, D-Mont., Mary L. Landrieu, D-La., Mark Begich, D-Alaska, and Debbie Stabenow, D-Mich., and– CINDY KIBBE/NEW HAMPSHIRE BUSINESS REVIEW

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