Senate votes to repeal 1099 requirement in ACA

The Senate approved its first repeal of any part of the Affordable Care Act on Thursday when it easily passed a measure repealing the requirement that businesses implement extensive new filing requirements. The so-called 1099 requirement, named after the type of form required by the Internal Revenue Service, would require a tax agency report any time a business contracted for at least $600 in services.

The repeal, which had bipartisan and presidential support, was part of a Federal Aviation Administration bill that cleared the Senate on an 87-8 vote. Both parties generally supported repeal of the 1099 provision, which would go into effect in 2012, after small businesses nationwide objected to the requirement's cost and time to comply.

The House of Representatives is advancing its own repeal of the new tax form requirements. That measure, approved by the Ways and Means Committee last week, next moves to the House floor.

The two chambers are expected to clash over the funding source for repeal of the new 1099 requirement, which would cost $17 billion in lost tax receipts. The House repeal bill would offset the loss in expected revenue through cracking down on people who claim tax credits to pay for their insurance under the health care law but whose incomes disqualify them from such support.

The Senate bill would allow the Obama administration to find cost offsets. Such expanded authority for the administration to decide the source of its own funding is unlikely to garner the support of House Republicans after even some Senate Democrats voiced opposition to that approach in earlier comments on the Senate floor.