A bill has been proposed to ease the reporting requirements for small businesses, specifically targeting the Corporate Transparency Act (CTA). The National Federation of Independent Business (NFIB) supports this legislation, introduced by Sen. Tommy Tuberville and Rep. Warren Davidson. Repealing the CTA would remove the beneficial ownership information requirements, considered one of the most burdensome regulations affecting small businesses.
Small business owners have been subjected to significant burdens under the CTA, with civil and criminal penalties imposed for minor paperwork violations. Moreover, it grants law enforcement agencies access to a vast database containing private information about millions of small business owners. According to Jeff Brabant, Vice President of Federal Government Relations at NFIB, the CTA is beyond repair and fully supports its repeal efforts.
Under the CTA, corporations, LLCs or similar entities with 20 or fewer employees and $5 million or less in gross receipts are required to report their beneficial ownership information to FinCEN. This rule went into effect on January 1st, 2024 and is estimated to impact around 32.6 million small businesses in its first year, with an ongoing impact on five to six million small businesses each year thereafter. NFIB has actively opposed the Corporate Transparency Act and continues to advocate for its repeal to alleviate the regulatory burden on small businesses.