House Repeals Unpopular 1099 Health-Care Law Provision

The measure passed by a vote of 314 to 112, although it probably won't find similar support in the Senate.

March 04, 2011

WASHINGTON - Yesterday afternoon the U.S. House of Representatives voted 314 to 112 to repeal the unpopular 1099 tax provision contained in the health-care law, reports the National Journal. However, it??s unlikely the Senate will provide similar support.

According to the news source, the House bill offsets the estimated $17 billion in lost revenue from the 1099 requirement by requiring those on the threshold of 400 percent of the federal poverty limit to pay back insurance exchange subsidies if their income increases over the course of a year. House Democrats who oppose the measure say it would impose tax increases on the middle class.

"If this bill would become law, it would mean a tax increase for hundreds of thousands of middle-income taxpayers," House Ways and Means ranking member Sander Levin (D-MI) said during debate, adding, "What this bill would do would be to saddle middle-income taxpayers in future years, pure and simple."

Although businesses don??t have to fill out the actual 1099 tax forms until 2013, they will have to get ready to track all purchases over $600 in 2012 to comply with the reporting requirement. Such uncertainty could affect purchasing and accounting decisions.

House Majority Leader Eric Cantor (R-VA) commented that the next step is negotiation between Senate and House versions of the measure.

"We'll have to see where the differences lie between the two bills," Cantor said. "Hopefully we can get this to the president??s desk as quickly as possible."

In early February the Senate voted 81 to 17 to roll back the 1099 tax reporting requirement, although it??s version of the bill would authorize the Office of Management and Budget to find an equal amount of unused funds, essentially punting the responsibility of coming up with the cash.

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