by Bunnie Riedel
My nonprofit expertise includes a healthy dose of public policy advocacy. That said, I have never used this blog for a “call to action” on specific legislation. However, today I must.
Deep in the health care legislation was a buried provision that will wreck havoc on nonprofits and businesses alike. It’s being called the “1099 Rule.” The legislation mandates that all businesses and nonprofits issue 1099’s to any individual or corporation from whom the business or nonprofit has purchased $600 or more in services and goods.
This is a major change in our tax law. Currently, nonprofits must issue a 1099 to an individual or unincorporated business if they purchase $600 or more in services. Say you contract with someone to sell advertising for your summer tradeshow or you bring in a strategic planning consultant to work with the board. You would issue a 1099 to that person if the total payments over the course of a year were $600 or more. However, you wouldn’t issue a 1099 for purchasing the conference space for your trade show or for the cost of renting a conference room.
This 1099 rule would apply to all purchases made over the course of a year. So if your nonprofit purchases $2,000 worth of goods from Staples, you will have to issue a 1099 to Staples. Or say you buy a new computer from Best Buy, you would have to issue a 1099 to Best Buy.
To issue the 1099, you will have to know where to send it. Additionally, you will have to have the Employer Identification Number of Staples or Best Buy or whatever company you’ve purchased goods from.
Perhaps large nonprofits or businesses will be able to assign a staff person or two to track down the corporate address and EIN of their vendors, but smaller entities typically don’t have that luxury.
Nonprofit and business groups have been working to get the 1099 Rule repealed. As of November 29th, that effort failed to pass the Senate. This is the second time the repeal has failed to pass.
The American Society of Association Executives has information on this issue ASAE and it has a sign-on letter your nonprofit can use. I recommend you download the letter, sign it and email it in. All mail to the Capitol is irradiated and takes two to three weeks to reach the member’s office, also, often the irradiation process tears up the envelopes and the letters.
Additionally, I recommend you pick up the phone and call your Senators and Representative.
Senate Contact Information
House of Representatives Contact Information
It's not clear who slipped this into the health care bill, but it certainly was not someone who understood the impact on the nonprofit community (nor on the small business community).
Send your sign on letters and make your phone calls today! Be sure to pass this information onto your board and your members, ask them to sign on to the letter and to make phone calls.
Good luck to all of us! And be sure to use the Comment button to let me know how it goes.
The goal of "Nonprofit Conversation" is to provide a forum for discussion of nonprofit success and challenges. Bunnie Riedel (host) provides advice, observations and solutions for the nonprofit community. Guest bloggers will be invited to share their ideas and interviews will be conducted with nonprofit executives, board members and other experts in an effort to create a "conversation."
Showing posts with label public policy. Show all posts
Showing posts with label public policy. Show all posts
Thursday, December 2, 2010
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