If we as a business have to pay out monies to a customer because one of our grocery carts hit his car, do we issue a 1099?


No, provided that the amount paid is only for damages. Only punitive damages are reportable. Replacement cost payment is not. See IRS Instructions for Form 1099-MISC, "other income" (https://www.irs.gov/pub/irs-pdf/i1099msc.pdf). 

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