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HMA —Hobby Manufacturers Association
Legislative Alert
LEGISLATIVE ALERT
FORM 1099
As a result of a new law signed this year,
beginning with payments made in 2012, every business will
be required to issue to any vendor of services OR property
to which the business has paid more than $600 a year for those
services or property, an information reporting form known
as Form 1099. The Form 1099 must also be sent to the Internal
Revenue Service. In addition to issuing the forms, a business
will have to get Taxpayer Identification Numbers (TINs) from
all of those vendors and withhold payments to any such vendor
until it receives the TIN. Penalties apply if you fail to
issue the Forms 1099.
Under the existing law, businesses issue the Form 1099 only
to individuals who provide services to a business. The new
law makes two changes: the Form 1099 must be issued to corporations
of all sizes and shapes as well as to individuals AND a Form
1099 must also be issued to individuals and corporations that
provide property to a business.
The payments that are included under this law are, not only
those made directly by check, but also those made by other
means such as credit cards, for example. Think about the airlines,
hotels, rental cars, and restaurants that appear on your credit
card bill. You might not think of them as vendors of goods
and services, but that is what they are. Also, if you are
in the business of selling or distributing goods, all of your
suppliers of products are also vendors under the new law.
(Under existing law there are regulations that provide narrow
exceptions for some types of vendors (telegrams, telephone,
freight, storage) and some individual vendors that accept
payment from you by credit card and meet qualifications set
forth by the IRS. Even if some regulatory exceptions are carried
over under the new law, you will still be the one responsible
and liable for issuing the information report and it will
not be easy.) And, of course, any business that pays you more
than $600 will be sending you a Form 1099.
Senator Mike Johanns (R-NE) has introduced S.3578
- Small Business Paperwork Mandate Elimination Act and Representative
Daniel Lungren (R-CA) has introduced H.R.
5141, The Small Business Paperwork Mandate Elimination
Act. Both bills would repeal the provision.
 The
message is simple. Tell your Senators and Representative to
repeal this new requirement before it is implemented. Click
here to find your Representative by zip code and to send
an email. Click here to send an email to your Senators. When
you send email, identify yourself as a constituent in the
header. For example: "Repeal Form 1099 Constituent from
ZIP CODE XXXXX."
You can create
your own message or copy and paste the following:
Please repeal the new Form 1099 requirement found in Section
9006 of Public Law 111-148. It requires me to issue a
tax information reporting form to virtually all of my
vendors. This is a significant direct increase in the
paperwork burden on me. Further, it is not simply a matter
of completing the form, but also the work and time involved
in obtaining the proper tax identification number and
dealing with backup withholding requirements. While I
am told the goal is to get businesses to report all of
their income, if I do not issue these forms correctly,
the penalties will not fall on those businesses that might
have been underreporting income but on me, even though
I am running my business in a proper way!
Please let your representatives
know that small business needs this 1099 legislation repealed
if we are to see an improved business climate.
CPSC Proposed Interpretative Rule:
Definition of Children's Product
The Office of the General Counsel of the U.S.Consumer
Product Safety Commission (CPSC) last week provided a notice
to the Commission on a proposed interpretive rule designed
to provide guidance on the factors that must be considered
when evaluating what is a children's product.
Read
more
The
Consumer Product Safety Act of 2008 was voted into law
on August 14, 2008. Prompted by highly-publicized recalls
of imported toys, the Act substantially amends the Consumer
Product Safety Act and enhances the authority of the U.S.
Consumer Product Safety Commission. The new Act, which
is over 60 pages long, covers a broad range of topics, and
primarily focuses upon the components, testing and labeling
of children's products and toys, particularly with respect
to lead and phthalates. As such, the new Act is likely to
impact products manufactured and distributed by HMA members.
HMA has been working diligently with our members
to communicate this information. Contact your local Congressman
now to express your issues with the Act and the possible areas
for repeal or revision. Click
here to contact your local Representative.
HMA Members, click here
for more information.
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