NLBMDA applauds Senate’s repeal of 1099 rules
The National Lumber and Building Material Dealers Association (NLBMDA) praised the actions of the United States Senate for passing the crucial 1099 Repeal Legislation. The Senate passed H.R.4, the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act without changing anything in the House-passed bill.
The bill now goes to the desk of President Obama.
"After a hard-fought, year-long battle on the 1099 legislation, today’s vote is a huge victory for all LBM dealers across the country," said Scott Lynch, NLBMDA executive VP. "Thanks to all of the hard work from all of the NLBMDA members for really pressing this issue with their respective representatives and senators and to those who traveled to Washington last month for the NLBMDA Legislative Conference to make the case in person."
While the administration has not officially put out a statement on what President Obama will do, the President has said on more than one occasion that the 1099 mandate should be repealed. The NLBMDA urges President Obama to sign the repeal legislation, he said.
Under existing tax law, a business taxpayer making payments to a service provider aggregating to $600 or more for services in the course of a trade or business in a year is required to send an information return to the IRS (and to the service provider-payee) setting forth the amount, as well as the name and address of the recipient of the payment (generally on IRS Form 1099). Under the law, the business taxpayer is not required to issue a Form 1099 to a corporation that provides services to it.
The new healthcare reform law made two changes to those rules. The first is to require businesses to issue the Forms 1099 to corporations, as well as all persons in a trade or business. The second is to expand significantly the scope by requiring the issuance for payments made to "property" providers, as well as service providers. The changes were to take effect for payments made after Dec. 31, 2011.
BFS files early results
In connection with a recent offering of senior secured notes, Builders FirstSource filed financial results for the fist two months of 2011 with the Securities and Exchange Commission (SEC) on April 5.
Sales for January and February 2011 were $95.7 million, a 4.2% increase over sales of $91.8 million for the two months ended Feb. 28, 2010. Lumber commodity prices were comparable over these same periods, and single-family housing starts declined 19.8% in its markets during January and February.
The Dallas-based pro dealer said it expects sales will be in the range of approximately $160 million to $165 million for the fiscal first quarter ending March 31, 2011, essentially flat with first-quarter 2010 sales of $161.4 million.
The company also expects that its fiscal first quarter, adjusted for EBITDA loss, will be in the range of approximately $9 million to $12 million, compared with a loss of $15.3 million in the first quarter of 2010.
Loss widens at KB Home
Los Angeles-based KB Home saw revenues drop 25% to $196.9 million in its first quarter ended Feb. 28. For the three months, the builder posted a net loss of $114.5 million, compared with a loss of $54.7 million in the same quarter last year.
President and CEO Jeffrey Mezger pointed to some positive trends.
"Despite the many headwinds that persist in today’s housing markets, our year-over-year pretax results, excluding noncash charges and the loss on loan guaranty, improved for the fourth consecutive quarter," he said.
Mezger added that the company is seeing higher traffic compared with a year ago.
The company delivered 949 homes in the first quarter of 2011, down 28% from the same period of 2010, with decreases in each of KB Home’s geographic regions.