Legislative Round-Up: Week of July 5th

Next Reform — State Employee Retirement Bills?

U.S. Senate to Take Up Jobs Bill This Month

IRS Taking Comments on 1099 Reporting Issue

In May when the legislature passed the school employee retirement bills, many in Lansing assumed that the early retirement bills for state employees would not be far behind.

However, that has not been the case.   Resistance from the state employee unions has been strong and the bills, which are estimated to save approximately $100 million have not been taken up in the Democrat controlled House.  The Senate passed the bills months ago, and Gov. Granholm not only supports the bills but announced the plan this past winter.

However, there have been two budget related events which may move these bills up on the priority list.  The first is that the current year budget is about $300 million in deficit because of lower than anticipated revenues.  The second is that the federal government has yet to pass the Federal Medicaid Assistance Percentages that the states were counting on to cover some of their Medicaid expenses.  For Michigan this amounts to about $560 million dollars.  

This has brought more attention to potentially passing the state employee retirement bills.  Rumors circulated that the bills may have been brought up before the current legislative recess.  We will continue to press for these reforms.  While it is not expected that they will be taken up before the end of the month; we hope they can be passed into law before the end of the summer.

The U.S. Senate introduced the Small Business Jobs Act of 2010 early last week.  The bill contains various provisions that will benefit many small businesses.

Included in the bill are provisions that would:

While we are still reviewing various details of the bills, we believe that a number of these provisions will be beneficial.

Here is a summary of the bills that we received from our national affiliate the National Small Business Association.

The Internal Revenue Service (IRS) has formally invited public comment on how to most effectively carry out the law change that, starting in 2012, will require businesses to report a wider range of payments to contractors, vendors and others, on Form 1099.

According to the IRS, these comments will help the IRS issue guidance (later this summer) that implements this provision in a manner that minimizes burden and avoids duplicate reporting.

Under a proposed regulation, many business purchases made with credit or debit cards would be exempt from the new reporting requirement because they are already reported by banks and other payment processors. The IRS seeks comments on additional circumstances in which duplicate reporting might otherwise occur and on rules that would prevent such duplicate reporting.

The change, enacted in March through the health care reform law but not effective until 2012, expanded existing reporting requirements to include a business’s payments related to goods and other property, and payments to most corporations. With some exceptions, payments to corporations are currently exempt from this requirement.

SBAM and the NSBA will be submitting comments, but we encourage all of you to also send your thoughts and comments to the IRS.

There are three ways to submit comments:

The deadline is Sept. 29, 2010.

More information is available here.