Letter Supporting the Johanns Amendment and Opposing the Nelson Amendment to H.R. 5297, the "Small Business Jobs Act of 2010"
TO THE MEMBERS OF THE UNITED STATES SENATE:
The U.S. Chamber of Commerce strongly supports an amendment expected to be offered by Sen. Johanns to H.R. 5297, the “Small Business Jobs Act of 2010,” which would repeal Section 9006 of the “Patient Protection and Affordable Care Act” (PPACA), usually referred to as the 1099 reporting mandate, and strongly opposes an amendment expected to be offered by Sen. Bill Nelson, which would increase energy taxes and further complicate the 1099 mandate.
The Chamber strongly supports the Johanns amendment because it would fully repeal the 1099 reporting mandate in the recently enacted healthcare law. This mandate will force more than 40 million entities, including governments, nonprofits, and both small and large businesses, to comply with onerous data collection and IRS information filing burdens on virtually all noncredit card purchases totaling $600 or more with any vendor in a tax year. Entities will have to institute new complex record-keeping, data collection and reporting requirements to track every purchase by vendor and payment method. This provision will dramatically increase accounting costs and expose businesses to costly and unjustified audits by the IRS.
During the August recess, the Chamber was among the more than 1099 businesses and organizations that sent a letter to Congress urging repeal of the 1099 mandate. The message of this letter is simple: when America is counting on the small business community to generate jobs and grow the economy, lawmakers should not force companies to divert their precious time and resources to collect volumes of information and fill out mounds of new paperwork for the government.
The Nelson amendment would make the 1099 reporting mandate even more complicated. It would create additional burdens on small businesses to determine at what point they have exceeded the 25 employee threshold that triggers the full force of the mandate when hiring fulltime, part-time, or seasonal employees. The amendment would likely discourage job creation because the full cost of compliance must be accounted for when exceeding this threshold.
Another provision in the amendment, which instructs the Department of the Treasury to provide exceptions from reporting on payments to businesses which bear minimal risk of tax non-compliance, would add time and confusion in determining which vendors are covered. This provision would likely favor larger concerns over smaller enterprises, creating new disincentives for firms to purchase from small businesses.
Moreover, the Nelson amendment would raise taxes by repealing the Internal Revenue Code Section 199 manufacturing deduction for the major integrated oil companies intended to expand domestic energy exploration and production. Such a shortsighted, new $15 billion energy tax would likely be passed along to consumers, decrease domestic energy production, decrease U.S. energy security, and hinder U.S. economic recovery.
The U.S. Chamber of Commerce, the world’s largest business federation representing the interests of more than three million businesses and organizations of every size, sector, and region, urges you to support the Johanns amendment and oppose the Nelson amendment to H.R. 5297. The Chamber will consider including votes on, or in relation to, these amendments in our annual How They Voted scorecard.
R. Bruce Josten