On Thursday afternoon (March 3rd), the House of Representatives voted 314-112 to repeal the 1099 requirement that will go into effect on Jan 1, 2012. The Senate is not likely to take up this legislation. However the disagreement is not over repealing the 1099 requirement it is how to pay for it.
When the new healthcare law was passed in 2009 the Congress created a requirement that included 1099’s to be issued for any transaction of $600. But repealing the 1099 is easier said than done. In Washington “speak” the healthcare law was “scored” by the Congressional Budget Office that the 1099 requirement would raise $19 billion in revenue over 10 years. So to repeal this requirement the Congress has to reduce spending by $19 billion to pay for the 1099 repeal.
The reduction cannot come from Social Security, Medicare or Medicaid programs. Although the Senate has passed a repeal of the 1099 it was on a bill that does not contain other tax issues.
The Senate Finance Committee (the Senate committee responsible for tax bills) is also considering a repeal of the 1099 in a tax bill. It is not known at this time when the Senate Finance Committee will take up any bill or report such a bill to entire Senate for consideration. We continue to monitor legislation that will finally repeal the 1099.
Once again, the issue is now not the repeal of 1099 but how to find $19 billion in other revenue to pay for it.
Don’t forget March 31st when the Gold and Silver PAC will be holding a political event during the Whitman Coin & Collectibles Expo in Baltimore at 6:30 pm in Room 303.