Murkowski to Vote for Repeal of Tax Burden in Health Care Law

WASHINGTON, D.C. – U.S. Sen. Lisa Murkowski, R-Alaska, said today she would vote to allow consideration of an amendment that would rescind an onerous tax reporting burden on small businesses that was included in the government health care takeover bill. The vote, which requires 67 votes to succeed, was expected to come up later tonight on an unrelated bill that pertains to food safety.

A provision in the health care 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, the proposal would remove the 1099 provision from the health care law. The Senate was also expected to vote tonight on a similar proposal by U.S. Sen. Max Baucus, D-Montana, that would add more than $19 billion to the federal debt. The Johanns amendment is fully paid for by using funds from unobligated and unspent federal accounts. Murkowski will vote against the Baucus amendment.

“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 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. The 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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