The small-business sector, which is the main producer of new jobs in the United States, is rightly up in arms over a little-known provision of the massive new health care law that will create a paperwork nightmare.

Specifically, the law, known in some circles as ObamaCare, will require nearly 40 million businesses to file tax forms for every vendor that sells them more than $600 in goods.

While Democrats and Republicans in the House want to repeal it, nothing is easy in an election year.

The intent of the provision embedded in the law is to prevent vendors from underreporting their income to the Internal Revenue Service. The government is projecting that it will bring in $19 billion over the next decade through this change.

Until now, businesses were required to file Form 1099s with the IRS when they buy more than $600 in services from a vendor in a year. The new rule would extend the requirement to the purchase of goods, starting in 2012.

We think this change is disastrous because businesses that make many small purchases from a vendor will have to spend an extraordinary amount of time keeping track, so they know whether they exceed the $600 threshhold.

“Tax paperwork and compliance are already major expenses for small businesses,” a coalition of 80 business groups wrote in a recent letter to lawmakers. “This new and expanded requirement means that almost every business-to-business transaction is potentially reportable to the IRS.”

With job creation lagging and businesses worried about government regulation, let’s drop this sneaky plan.