For months now, conservatives and other critics of the White House’s health care reform have pointed to a provision in the law requiring businesses to report to the IRS purchases from every vendor totaling $600 or more per year.

Karen McMahan reported on this for Carolina Journal in July.

The new law has been described in some quarters as the ?Staples tax,? as it will force millions of companies to begin filing 1099 forms to every business selling them office supplies, snack foods, and cleaning products.

The Heritage Foundation, a Washington, D.C.-based public policy research organization, says the new regulations will affect 40 million businesses, of which 26 million are sole proprietorships. Small businesses face the biggest threat because they lack the resources to track and manage this type of reporting.

It seems the Obama administration has gotten the memo. HHS Secretary Kathleen (“don’t tell the truth about Obamacare”) Sebelius and Treasury Secretary Timothy (“only the little people pay taxes“) Geithner have written the Senate, urging it to amend the bill, boosting the reporting threshold from $600 to $5,000. Republicans are pushing repeal of that provision entirely. (At first. Repeal of the entire mess remains high on the GOP’s agenda.)

Ed Morrissey at HotAir.com nails it:

Had this bill been processed normally through committees and debated honestly, this flaw would have gotten immediate attention. Instead, the ObamaCare bill got written in back rooms, rushed to the floor of both chambers, instead of developed in the normal process. The excuse was that it was too important to get vetted, and too time-critical to delay it or pass it in components. Well, this is what happens when Congressional leadership says that they have to pass a bill to find out what?s in it, and when they drop 2,800 pages of legislative text on members just 48 hours before floor votes.

UPDATE (2:08 p.m.): The Washington Examiner reports each party defeated the other’s proposed fix in the Senate. Dems led a 46-52 vote against full repeal; then an attempt to increase the threshold to $5,000 and exempt companies with fewer than 25 employees went down 37-61.

It’s gonna be a nasty fall.