Senate action on Elimination of 1099 Tax Requirements:

The National Community Pharmacists Assn. (NCPA) continues to work closely with NFIB and its coalition stakeholders to repeal or narrow the expanded 1099 reporting requirements for small business under the new health care reform legislation. The provision would require businesses to provide a 1099 form to any entity from which they purchase more than $600 in goods and services, starting in 2012.

Two bills were introduced earlier this year that would eliminate the new 1099 requirement. The Small Business Paperwork Mandate Elimination Act has 23 cosponsors in the Senate (S. 3578, introduced by Senator Johanns, R-NE) and 160 cosponsors in the House (HR 5141, introduced by Representative Lungren
R-CA).

Senator Johanns’ legislation will be voted on as an amendment to a Small Business Jobs Bill when the Senate returns in mid September. Another amendment offered by Senator Bill Nelson (D-FL) will also be voted on. This amendment would exempt payments made by credit or debit card. It also increases the payment threshold to $5,000 (up from $600) for the year for payments made for property (i.e. goods). Second, small businesses with 25 or fewer employees would not have to issue a form 1099 for payments made for property, regardless of the payment amounts.

The efforts to repeal this requirement appear to be picking up steam as Senate Democrats acknowledge this issue will have to be addressed when Congress returns in the fall. CONTACT YOUR CONGRESSMAN... NCPA is supporting a repeal of the 1099 requirements because of the burdens they will place on small pharmacies.