With the passage of the Federal Aviation Administration (FAA) Reauthorization legislation last week, the Senate has provided a legislative avenue for repealing the new 1099 reporting requirements.  However, despite movement towards repeal in both bodies, the path to the president’s desk for repeal legislation is uncertain and entangled in partisan politics.

The FAA Reauthorization contained an amendment sponsored by Senator Debbie Stabenow that would repeal the 1099 requirement contained in last year’s health care legislation and would offset the cost by permitting the Office of Management and Budget (OMB) to find the money in unspent appropriated funds.  Although a large number of Republicans voted for the amendment, House Republicans have concerns that the Stabenow approach gives too much authority to the Obama administration to pick from which programs to take the offset.

In last week’s Ways & Means Committee hearing, the committee passed two pieces of legislation to repeal the 1099.  The first, HR 4 sponsored by Rep. Dan Lungren, would repeal the health care law’s 1099 provision without any offset.  HR 4 was passed by unanimous consent.  A second bill, HR 705 sponsored by Chairman Dave Camp (R-MI), would repeal the health care 1099 provision and another 1099 reporting expansion contained in last year’s small business loan law that would include certain rental property improvements.  The bill would be offset by making changes to the health care law’s subsidy for lower income filers.  The bill was passed by party line vote, with Democrats decrying the pay-for as a tax increase.

With both parties advocating their own path for repealing the 1099, the target date both chambers passing repeal is unknown.  Association professionals and volunteers will advocate for 1099 repeal during American Associations Day 2011.  For more information on the event, see our fly-in page.

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