Murkowski Supports Bill to Rescind Onerous Health Care Law Tax Burden on Small Businesses
WASHINGTON, D.C. – U.S. Sen. Lisa Murkowski, R-Alaska, today signed on to legislation that would rescind an onerous tax reporting burden on small businesses that was included in the new government health care takeover law.
A provision in the new law requires any business that purchases more than $600 of goods or services from another business to submit a 1099 tax form to the IRS. The mandate will take effect at the end of next year and will result in small businesses paying the government $17 billion over the next 10 years.
Introduced by U.S. Sen. Mike Johanns, R-Nebraska, and co-sponsored by Murkowski, the bill would remove the 1099 provision from the health care law. Similar legislation has been introduced in the U.S. House of Representatives.
“At a time when we should be doing everything possible to help our small businesses grow their way out of this recession, we instead have saddled them with yet another tax burden,” said Murkowski, who voted against the Democratic health care bill. “Small businesses already face a number of tax hikes in this law, including a higher Medicare payroll tax, a brand new tax on investment income and an employer penalty for not offering health insurance. Now small businesses will have to spend needless amounts of money complying with the 1099 reporting requirements, money that could have been much better spent on expanding their businesses.”
The health care law’s tax reporting provision means that small businesses will have to provide 1099 forms for basic business expenses, including phone and internet services, shipping costs and office supplies. One likely effect will be to cause small businesses to rely on a single large supplier rather than negotiating with a number of small companies.
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