The new health care bill will impose significant burdens on businesses by requiring them to issue a Form 1099 to all vendors from which the business does more than $600 per year in purchases, the Marine Retailers Association of America said in an advisory to its membership.
To meet this new requirement, which goes into effect in 2012, businesses will have to keep track of all purchases they make by vendor. For example, if a self-employed individual makes numerous small purchases from an office supply store during a calendar year that total at least $600, the individual must issue a Form 1099 to the vendor and the IRS showing the exact amount of total purchases.
"The problem has a very broad reach," the MRAA said. "According to an analysis by the Internal Revenue Service, about 40 million businesses and many entities will be subject to the new requirement, including roughly 26 million non-farm sole proprietorships, four million S corporations, two million C corporations, three million partnerships, two million farming businesses, one million charities and other tax-exempt organizations and more than 100,000 government entities."
The MRAA recommends that all marine retailers consult with their accountants on this new requirement.