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Tax Provision May Burden Small Carriers With Extra Paperwork; Congressman Steps In

Small businesses are not too pleased with a provision of President's Obama's health care reform bill, which requires businesses to submit a 1099 tax form to the IRS for purchases over $600

by Staff
May 5, 2010
Tax Provision May Burden Small Carriers With Extra Paperwork; Congressman Steps In

(Photo courtesy of Corcentric)

2 min to read


Small businesses are not too pleased with a provision of President's Obama's health care reform bill, which requires businesses to submit a 1099 tax form to the IRS for purchases over $600.

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The mandate takes effect in 2012. Many say the provision could create a paperwork nightmare for small businesses, including trucking companies, who don't have the manpower or resources to handle it.

"Large corporations have whole divisions to handle such transaction paperwork but for a small business, which doesn't have the manpower, this is yet another brick on their back," said Rep. Dan Lungren (R-Calif.), who is fighting back.

Bob Pitcher, vice president at the American Trucking Associations, called the mandate "a very large burden, and unnecessary for tax administration."

Lungren has introduced the Small Business Paperwork Mandate Elimination Act, which would remove this provision from the health care legislation. The National Federation of Independent Business wrote a letter to Lungren last month, voicing its support of his effort.

"Businesses are already overburdened with tax paperwork and reporting requirements," the letter said. "Unfortunately, the expanded information reporting requirement included in the Patient Protection and Affordable Care Act will only further increase the cost and complexity of complying with the tax code.

"The cost of tax compliance falls heavily on small business. On average, small businesses spend more than $74 per hour on meeting their compliance obligations, which represents the most expensive paperwork burden that the federal government imposes on small business owners."

According to a statement by Lungren, the new tax filing mandate is reported to raise $17 billion.

"The paperwork reporting provision, like so many other provisions in the law is about finding a way to pay for the new law," the NFIB's letter said.

"We should be working on reining in the cost of health care, not imposing a new government mandate to squeeze every drop of revenue out of small business," Lungren said.


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