Baucus, Tester applaud passage of bill to cut small business paperwork burden
Senators Vote to Repeal 1099 Reporting Requirements So Montana Businesses Can Focus on Jobs
(Washington, D.C.) – Montana’s U.S. Senators Max Baucus and Jon Tester applauded Senate passage today of legislation to eliminate new Form 1099 paperwork requirements and free up resources for Montana small businesses to grow and create jobs.
“Today’s vote was a vote to help small businesses create jobs with a simple, common sense fix that will cut red tape and free up resources so employers can focus more on hiring new workers and less on filing paperwork” said Baucus, author of the Small Business Jobs Act. “Small businesses are the backbone of our economy, especially in Montana where we have more workers employed by small businesses than anywhere else in the country. Montana businesses have made clear these paperwork requirements won’t work for them. I urge the House to pass this bill quickly so Montana businesses can focus their resources on growing and creating jobs.”
“This is the right thing to do because it cuts red tape in a fiscally responsible way, allowing Montana’s small businesses to focus on creating jobs,” Tester said. “Now it is up to the House to start focusing on bills that will help get folks to work, and they can start by passing this bill.”
Baucus originally introduced legislation to repeal 1099 reporting requirements last November, with the support of the Montana Chamber of Commerce and the National Federation of Independent Business, after hearing concerns from Montana businesses that the new requirements created too large of an administrative burden. Baucus has been fighting to repeal the provision ever since. He reintroduced legislation last week with Tester, who also voted to repeal the provision twice last year.
After passing the Senate today, with Baucus and Testers’ support, the repeal will now need to pass in the House of Representatives to become law.
The reporting requirement is not scheduled to take effect until 2012. However, following passage of the law in 2010, Montana business owners expressed concern that when the provision does go into effect, the forms would place a heavy paperwork burden on small businesses, which is particularly troubling in Montana where 97 percent of all workers are employed by small businesses.
The reporting requirement, referred to as “1099” because it would require businesses to file Form 1099 with the IRS to report payments made to corporations for goods and certain services, was proposed by the Bush administration to help better keep track of what businesses spend and earn, which in turn helps better keep track of what they owe in taxes.
The U.S. Treasury Department estimates that more than $345 billion in owed taxes go unpaid each year, adding to the federal deficit. The 1099 information reporting requirement was passed in hopes that better information would help the IRS collect more of those unpaid taxes and keep taxes lower for all taxpayers. As chairman of the Senate Finance Committee, with sole jurisdiction over the tax code, Baucus vowed to address Montana businesses concerns by repealing the new reporting requirement and look for other ways to improve tax compliance and keep taxes low.