Battle Continues for Repeal of 1099 Reporting Requirement

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December 1, 2010

Two measures that would have repealed the new requirement for businesses, including colleges and universities, to file Forms 1099 on purchases of goods or services over $600, failed to pass in the Senate last week.

Enacted earlier this year as part of the Affordable Care Act, the new requirement is estimated to generate about $19 billion in revenue over a ten-year period. Business groups, including higher education, are opposed to the measure and have lobbied throughout the year, calling for its repeal. In Congress, there is widespread, bipartisan support for repeal, including from Senate Finance Committee Chair Max Baucus, sponsor of one the amendments that was voted down last week.

So far, stumbling blocks have been disagreements among Senators about how to pay for the $19 billion that repeal will cost the government, and whether the legislation reopens the health care reform bill for further changes. Going forward, the provision's "price tag" could present a growing challenge in a political climate where members of both parties are under intense pressure to lower the federal deficit and to preserve, if not enhance, existing revenue streams.

Senator Baucus and others are committed to revisiting the issue, though it now appears unlikely to be considered by Congress until next year. Unless Congress repeals or postpones the provision, the new requirement goes into effect on January 1, 2012.