WASHINGTON, DC – To eliminate a burdensome paperwork requirement facing small businesses, Senator Roberts has cosponsored a bill to repeal a costly tax provision in the new health care law that requires immense expansion of 1099 reporting for small businesses and charities.

“Small businesses are America's job creators and essential to our nation's economy," Senator Roberts said. "Under the new health care law, small businesses will be hit with a costly tax reporting provision that will increase the cost of doing business at a time of economic uncertainty.”

Senator Roberts joined Senator Mike Johanns (R-NE) who introduced the Small Business Paperwork Mandate Elimination Act, which would repeal Section 9006 of the Patient Protection and Affordable Care Act (PPACA).

Beginning in 2012, the new health care law requires businesses, tax-exempt organizations, and state and local governments to submit a separate 1099 reporting form for every single business-to-business transaction that totals more than $600 in a given year. This includes everyday purchases such as shipping costs, supplies, internet and phone services. Since smaller companies will have to fill out additional 1099 forms for each vendor, businesses will reconsider working with smaller businesses as vendors. Under current law, businesses must report services from non-corporate entities, or independent contractors, but under the new health care law provision, these filings will increase by 2000 percent.

"Unless corrected, this time-wasting mandate of 1099 filings on common purchases needed to do business, will stifle economic growth and job creation while the IRS will be handed a paperwork nightmare. I have heard from many Kansas small businesses and farmers, already burdened with government bureaucracy, that these new reporting requirements will waste time and negatively impact their bottom-line.”

Small businesses have created more than 64 percent of new jobs in the past fifteen years. The new requirements under this provision would impact as many as 40 million businesses nationwide. The National Taxpayer Advocate has estimated the IRS will be unable to process the increased amount of paperwork and enforce this new requirement.

Senator Roberts voted against the PPACA and is a member of the Senate Committee on Finance.

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