Small Business Gathers to Support H.R. 5141

In early June, NFIB members and representatives from nearly every local chamber of commerce gathered to announce their support of U.S. Rep. Dan Lungren’s H.R. 5141 – the Small Business Paperwork Mandate Elimination Act. 

H.R. 5141 would eliminate an onerous new requirement contained in the recently passed healthcare bill that would mandate that small businesses send Form 1099s for every business-to-business transaction of $600 or more for both property and services.

The announcement was made at McConnell Estates Winery, in Elk Grove, California.  Owner Mike Wackman, an NFIB member, spoke at the press conference and estimated his small business alone would have to file at least 300 1099s to the various people they do business with. 

“Most small businesses don’t have time to do that,” he said.  “Let us spend our time growing our business – doing paperwork doesn’t make us money.”

The cost of tax compliance falls heavily on small businesses. On average, small businesses spend more than $74 per hour on meeting their compliance obligations, which represents the most expensive paperwork burden that the federal government imposes on small business owners. Small business owners typically lack in-house finance departments like most large businesses, leaving the paperwork burden to be handled by the owner or outsourced to an accounting firm – both of which take time and resources that could be used to re-invest and grow their business.

We do not believe that increasing the paperwork and tax filing burden on an already struggling small business has any part in the new healthcare law – especially when the provision has nothing to do with healthcare. Instead, the paperwork reporting provision, like so many other provisions in the law is about finding a way to pay for the new law. At a time when our economy needs small businesses to help our country grow out of this recession, saddling them with expensive new requirements and paperwork burdens will only further hamper their ability to aid in our economic recovery.

Rep. Lungren speaks about the Small Business Mandate Paperwork Elimination Act

NFIB member Mike Wackman explains the impact the new 1099 reporting would have on his business.