A Powerful, Connected and Well Educated Technology Community for Maine
2010 11/16 New Form 1099 Requirements
TechMaine has joined CompTIA and other technology associations in calling on Congress to repeal a new tax reporting requirement that will become effective January 1, 2012. Under this new requirement, any business that pays a single vendor $600 or more for goods or services annually must issue a Form 1099-MISC to that vendor, and this form must also be filed it with IRS.
Whether a business pays for goods or services – either to a corporation or individual, payments tallying $600 or more during a calendar year must be reported both to the IRS and the recipient on a Form 1099-MISC. This will require businesses to file significantly more number of Forms 1099 than is currently required. This translates into additional compliance; Maine small businesses do not need new filing burdens and costs, especially in a time when the economy suffers and jobs are scarce.
TechMaine has sent the following letter to our Congressional Delegation. Feel free to send this and additional communication to your representatives. This is a time-sensitive issue as we hope to spur Congressional action on this during the upcoming lame-duck session of Congress which begins on November 15th. To join our call for action, use the links below to contact Maine's Senators and Representatives.
Whether a business pays for goods or services – either to a corporation or individual, payments tallying $600 or more during a calendar year must be reported both to the IRS and the recipient on a Form 1099-MISC. This will require businesses to file significantly more number of Forms 1099 than is currently required. This translates into additional compliance; Maine small businesses do not need new filing burdens and costs, especially in a time when the economy suffers and jobs are scarce.
TechMaine has sent the following letter to our Congressional Delegation. Feel free to send this and additional communication to your representatives. This is a time-sensitive issue as we hope to spur Congressional action on this during the upcoming lame-duck session of Congress which begins on November 15th. To join our call for action, use the links below to contact Maine's Senators and Representatives.
TechMaine, The Technology Association of Maine strongly urges you to repeal the new Form 1099 reporting requirement (enacted under §9006 of the Patient Protection and Affordable Care Act). This new requirement is a significant problem for all technology businesses – both large and small. However, it has a disproportionately negative effect on small businesses.
Under this new requirement, any business that pays a single vendor $600 or more for goods or services annually must issue a Form 1099-MISC to that vendor, and this form must also be filed it with IRS.
- If a business hires an accounting firm to prepare its tax returns, that business must provide the accounting firm with a Form 1099-MISC, which must also be provided to the IRS.
- If a business buys a computer for $600 or more from a supplier, the business must provide the supplier with a Form 1099-MISC.
Whether a business pays for goods or services – either to a corporation or individual, payments tallying $600 or more during a calendar year must be reported both to the IRS and the recipient on a Form 1099-MISC. In reality, the additional compliance costs on businesses will likely exceed the $17.1 billion in revenue that the Joint Committee on Taxation estimated would be raised.
Even though this new reporting provision does not constitute a new business “tax,” its effects are the same. U.S. small businesses do not need new filing burdens and costs, especially in a time when the economy suffers and jobs are scarce. These requirements are too extreme and the associated costs are too high.
We urge immediate, bipartisan action to repeal this provision.
Sincerely,
