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Friday, April 15, 2011

1099 Reporting Requirement Headed for Repeal, Congress Funding Bill for Remainder of Fiscal Year 2011 Detrimental to Horse Industry

Courtesy American Horse Council

The American Horse Council reports that on April 5, 2011 the Senate passed a repeal of the onerous new 1099 reporting requirement that was scheduled to kick-in in 2012. The House approved the same 1099 repeal bill (H.R 4), introduced by Congressman Lungren (R-CA), earlier this year. The President is expected to sign the bill into law in the next several days.


“We are glad Congress took action to head off what would have been a large increase in tax-related paper-work for horse businesses in 2012,” said AHC President Jay Hickey.


The new 1099 paperwork mandate was a provision of the health care bill passed last year that would have imposed burdensome new tax reporting requirements on every business in the U.S., including those in the horse industry, beginning in 2012. Current law requires 1099s to be sent to any independent contractor that receives $600 or more from a business in a year. The new provision would have required 1099s be sent not only to independent contractors but also to any individual or corporation from whom a business purchased a total of $600 or more in goods or services in the year.


The bill repeals only the new broader reporting requirements. Businesses will still have to send 1099s to independent contractors as current law requires.


“Repeal of the new 1099 requirement has had Presidential and bipartisan Congressional support once its full impact on businesses was realized,” said Hickey “However, during the last Congress disagreement over details got in the way of repeal. We are happy Congress prioritized getting this done before businesses were impacted in 2012."

Congress Releases Details of Funding Bill for the Remainder of Fiscal Year 2011

The American Horse Council (AHC) reports the details of the negotiated Continuing Resolution (CR) for funding the government for the remainder of the 2011 fiscal year, which ends September 31, have been released.  This bill will cut funding to several government agencies and programs that are important to the horse community including U.S. Department of Agriculture (USDA) and the federal land management agencies.

Background

Normally, Congress debates and approves several separate appropriation bills for each area of the federal government.  Last year, Congress failed to pass a single appropriations bill.  Since October, 2010 government agencies and programs have been funded by a series of CRs that normally continue funding at the previous year's levels with slight adjustments.  The most recent CR is scheduled to expire on April15.

Funding the government for the rest of FY 2011 has been a contentious issue and almost resulted in a government shutdown. House Republicans originally passed a bill that would have cut $61 billion in government spending. However, the Senate refused to consider the bill. For the last several weeks the Senate, House and White House have been negotiating a bill that would scale back the spending cuts originally demanded by House Republicans and prevent a government shutdown. 

The CR  that has been crafted by House and Senate negotiators will fund the government for the reminder of the 2011 fiscal year and will cut government spending by almost $40 billion compared to FY 2010 levels. The $40 billion figure includes $12 billion in cuts made in three stopgap CRs and $28 billion in new cuts.  The CR will cut funding for several federal agencies important to the horse community.

The CR will cut $44 million from the Agricultural Research Service (ARS). ARS is the USDA's chief scientific research agency.  ARS has played a critical role in mitigating the health and economic impacts equine infectious diseases, such as Equine Piroplasmosis, have had on the horse industry.

The CR will also cut $ 41 million from the Animal and Plant Health Inspection Service (APHIS). APHIS is a multi-faceted Agency within USDA with a broad mission that includes protecting and promoting the health of U.S. livestock, administering the Horse Protection Act, and implementing emergency response and management protocols in the event of an equine disease outbreak.

The CR contains several cuts to programs and federal land management agencies that are important to recreational riders. These cuts will impact construction and maintenance of trails that equestrians use on federal public lands.  The CR will cut $6 million from the National Forest System, $127 million from the National Park Service, and $18 million from the Bureau of Land Management.

Additionally, the CR cuts $149 million from the Land and Water Conservation Fund (LWCF).  LWCF provides funds for the federal government, states and local governments to acquire land for conservation and recreation.   Many equestrians ride on public lands and trails that were acquired with LWCF money.

Status

Both the House and the Senate are expected to vote on the CR this week.

If you have any questions, please contact the American Horse Council.

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