WASHINGTON, D.C. -

According to the the National Automobile Dealers Association, two crucial amendments associated with federal health care reform are expected to be voted on soon in Congress. NADA says the 1099 reporting requirements will take a tough toll on dealers.  

NADA leaders explained two amendments to S. 510 offered by Sen. Mike Johanns, a Republican from Nebraska, and Sen. Max Baucus, a Democrat from Montana, would repeal the recently enacted 1099 reporting requirements. The association is encouraging that dealers reach out to senators, urging them to vote in favor of these amendments.

Last April as part of the health care reform bill, Congress apparently issued a mandate that begins on Jan. 1, 2012. The mandate states that all businesses — including dealerships — will have to file “1099” forms with the IRS any time they purchase any goods or services worth $600 or more from a vendor in a given year.

NADA claims this new requirement would create a needless and significant paperwork burden for dealers, and as such, the group supports complete repeal.

The association strongly backs both the Johanns Amendment and the Baucus Amendment. NADA pointed out the difference in the amendments is that Johanns offsets the cost of repeal by using unspent stimulus funds and Baucus repeals the new 1099 requirement with no budget offset.

NADA went on to mention four other facets as to why it believes these amendments’ passage is so critical for dealers:

—Tax paperwork and regulatory compliance are already major expenses for small businesses. The new reporting requirements will significantly increase the paperwork.

—Even the IRS taxpayer advocate has expressed concern with this mandate since it “may turn out to be disproportionate as compared with any resulting improvement in tax compliance.”

—Complete repeal of the 1099 requirements is the only solution to protect dealers from this burdensome and costly paperwork regulation.

—Small Business Administrator Karen Mills recently issued a letter supporting repeal of the 1099 provisions of the health care reform bill.

The NADA urged dealers to contact Senate leaders voicing their support for the amendments’ passage by calling (202) 224-3121 or visiting www.senate.gov.