Washington, D.C. – The Senate voted Tuesday to repeal the expanded 1099 information reporting requirements in last year’s health care reform and small business laws, sending the repeal to President Obama’s desk.

The repeal legislation, offered by Sen. Mike Johanns, R-Neb., was known as the Comprehensive 1099 Taxpayer Protection and Replacement of Exchange Subsidy Overpayments Act of 2011. Unlike the repeal vote earlier this year, the Senate and House bills contained similar language and offsets.

Senator Orrin Hatch, R-Utah, ranking member of the Senate Finance Committee, hailed Senate passage of the amendment, which passed by a vote to 87 to 12.

“The 1099 health care mandate is an albatross around the necks of American small businesses, forcing them to bear the brunt of the Obama Administration’s big-spending, tax-hiking, debt- increasing agenda,” said Hatch, who joined with Johanns last fall to launch the 1099 repeal effort. “I commend Senator Johanns for his ongoing leadership on this vital issue. Removing this costly regulatory burden from the backs of these entrepreneurs will allow them to do what they do best: create good-paying jobs.”

The 1099 provision required businesses, charities and state and local governments to file a 1099 form with the Internal Revenue Service to report annual purchases from other companies above $600.

House Ways and Means Committee Chairman Dave Camp, R-Mich., praised passage in the House of H.R. 4 1099 repeal legislation.

“The 1099 IRS reporting provision enacted in the Democrats’ 2010 health law quickly became the poster child for a government that is too big, too intrusive and too out of touch with small businesses,” said Camp. “After a nearly year-long battle, today’s vote is a major victory for America’s small businesses and the workers they employ. The Senate made the right choice in passing the bipartisan, common sense solution crafted by the House. The President should sign this into law immediately and work with us to find other ways to reduce the heavy burden of federal mandates, regulations and paperwork that takes employers’ time, energy and resources away from creating jobs.”

While both the Senate and House proposed competing versions of repeal legislation in the last Congress, the two chambers were never able to agree on a unified solution to provide small businesses with much-needed relief. H.R. 4, introduced by Rep. Dan Lungren, R-Calif., incorporated new language authored by Camp, R-Mich., repealing the onerous new Form 1099 information reporting requirements that were imposed on small businesses to pay for the health care law. The bill also would repeal an additional Form 1099 information reporting requirement on owners of rental real estate; and reduce improper overpayments of insurance exchange subsidies established under the health care law.

Upon final passage in the House, the Lungren-Camp 1099 repeal received 314 votes in the House—including 76 Democrats—last month and passed the Senate with a bipartisan vote of 87 to 12.

American Institute of CPAs president and CEO Barry Melancon praised passage of the bill.

“Today’s overwhelming vote by the Senate to repeal onerous information reporting requirements is a victory for taxpayers,” he said in a statement. “The AICPA had advocated strongly for the repeal of these reporting requirements because the increased burden on taxpayers and the time consuming process the IRS would have to use to reconcile millions of forms is too costly. We urge the President to quickly sign the repeal legislation into law.”

National Society of Accountants executive vice president John Ams described the 1099 reporting requirements as a “nightmarish regulation.” “Congress finally listened to the voice of actual experience rather than people in ivory towers,” Ams said. “For that, we are grateful. People on the ground making a living every day could see this would be a big problem and would not increase the revenue Congress was expecting. All it would do is cost businesses money and increase the burden on the IRS.”

By Michael Cohn, Accounting Today