WASHINGTON (Reuters) - A top Democrat in the Senate on Friday pledged to repeal a provision of the new healthcare law that requires businesses to file tax forms on transactions of more than $600.
Senator Max Baucus, chairman of that chamber’s tax-writing committee, said he would introduce legislation to repeal that part of the law, which requires filing so-called 1099 forms, after small business groups complained it would become a paperwork nightmare.
Republicans, who won control of the House of Representatives election and gained seats in the Senate in the recent elections, have vowed to try to repeal the entire healthcare law. They have also sought repeal of the 1099 provision separately.
Baucus noted that the change was originally proposed under former Republican President George W. Bush.
Baucus said he was convinced by business groups’ complaints that it was an administrative burden.
“I have heard small businesses loud and clear and I am responding to their concerns,” Baucus said in a statement.
Obama last week said that he would fight any attempt to repeal the legislation, but would be willing to consider some Republican ideas. He suggested the two sides work together to change the new business transaction reporting requirement.
The provision in the healthcare bill requires businesses and tax exempt organizations to file so-called 1099 forms for purchases and service transactions over $600. It was intended to ensure greater tax law compliance and raise an estimated $17 billion in revenues over 10 years to help cover the cost of expanding health coverage to the uninsured.
The 1099 reporting requirement, which goes into effect in 2012, sparked an outcry from small business groups. They argue it will increase tax compliance costs and tie up small business owners in red tape while they are already struggling in a poor economy.
Reporting by Kim Dixon