The provision requires businesses to file 1099 tax forms with the IRS for every vendor selling them more than $600 in goods or services. Business groups say that would create more onerous paperwork for more than 40 million companies.
But a Democratic bill to exempt firms with 25 or fewer workers and raise the reporting threshold to $5,000 for the rest, supported by President Obama, failed a 60-vote procedural test by 56-42. Meanwhile, a Republican bill to repeal the requirement also failed the test, by a vote of 46-52.
Most major business groups want to repeal the provision, which is expected to raise $18 billion in revenue over 10 years but does not go into effect until 2012.
Read the AP report on taxes.
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