PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

SBE Council Praises Senator Rick Scott’s Leadership in Working to Remove Costly New Burden on Self-Employed Entrepreneurs

By at 24 March, 2021, 5:56 pm

NEWS

For Immediate Release

Washington, D.C. – Today in the U.S. Senate, Senator Rick Scott (R-FL) stepped up to advance an important bill to repeal a costly burden on the self-employed and small businesses that was tucked into the “American Rescue Plan Act of 2021” signed by President Joe Biden on March 11. The effort, however, was blocked by Senate Democrats. Senator Scott’s bill would return previous Internal Revenue Service (IRS) reporting thresholds for 1099-K filings, which were vastly altered through the massive COVID-19 spending package. The new thresholds will impose a significant new mandate on the smallest of businesses, requiring extra time and money at a time when many self-employed and gig entrepreneurs are barely keeping their businesses afloat.

“A rescue and relief plan needs to do just that,” said Small Business & Entrepreneurship Council (SBE Council) president & CEO Karen Kerrigan. “Imposing new paperwork and reporting burdens on those hardest hit by the pandemic is heartless and counterproductive. The small business community and its millions of free lancers, gig workers and self-employed individuals appreciate Senator Scott’s leadership on this issue, and we are very disappointed by the Democrat response. The change in reporting mandated by the recent $1.9 trillion package is quite a dramatic one for the self-employed and small businesses, and works against efforts to restore our economy and encourage entrepreneurship,” added Kerrigan.

In the American Rescue Plan signed by President Biden, the new reporting threshold associated with Form 1099-K, Payment Card and Third Party Network Transactions, would drop from $20,000 in aggregate payments and 200 transactions to solely a threshold of $600 in aggregate payments, with no minimum transaction requirement. The new threshold amounts to a costly new reporting requirement, which would disproportionately impact small businesses.

According to SBE Council’s Kerrigan, government policies must provide relief and support for small businesses as they dig out of the toughest economic challenge many have ever faced. New regulatory requirements and costs serve to undermine their efforts to return to normal operations, and hopefully growth.

“If Washington keeps piling on new costs and mandates, our small business sector will take much longer to recover. Some of these costs, like the new Form 1099-K reporting changes, will actually shutter small businesses and discourage people from starting businesses. We hope Senator Scott keeps up the fight on this issue, and that Democrats eventually understand the costs and pain such new requirements impose,” Kerrigan added.

CONTACT:

Karen Kerrigan, kkerrigan@sbecouncil.org

SBE Council is nonpartisan advocacy, research and education organization dedicated to protecting small business and promoting entrepreneurship. For more than 25 years, SBE Council has worked on and advanced a range of private sector and public policy initiatives to strengthen the ecosystem for strong startup activity and small business growth. Visit www.sbecouncil.org for additional information. Twitter: @SBECouncil

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