- Thursday, February 13th, 2025
Sen. Scott Leads Effort to Ease Burdens on Small Businesses
WASHINGTON — U.S. Senator Tim Scott (R-S.C.), chairman of the Senate Banking, Housing and Urban Affairs Committee, introduced commonsense legislation to ease burdens and shield small businesses from excessive legal red tape. The Protect Small Businesses from Excessive Paperwork Act of 2025 would extend the filing deadline for businesses to report beneficial ownership information (BOI) until January 1, 2026, giving the U.S. Department of Treasury more time to educate business owners on the new reporting requirements, assess Biden administration BOI decisions, and ensure small businesses are not overburdened – and potentially held liable – with unclear and unnecessarily complicated regulations.
Senate Banking Committee members, including Senators Mike Rounds (R-S.D.), Thom Tillis (R-N.C.), Bill Hagerty (R-Tenn.), Cynthia Lummis (R-Wyo.), Katie Boyd Britt (R-Ala.), Pete Ricketts (R-Neb.), Jim Banks (R-Ind.), and Kevin Cramer (R-N.D.), joined Senator Scott on the legislation. Senators Jerry Moran (R-Kan.) and James Lankford (R-Okla.) also signed onto the bill.
“Small businesses are the backbone of our economy, and we need to ensure they have the necessary time and information to comply with reporting requirements from the federal government. This commonsense bill will ensure small businesses are protected and not overly burdened by unclear and unnecessarily complicated regulations – allowing them to focus on serving their customers while following the law,” said Senator Scott.
“The beneficial ownership reporting requirements of the Corporate Transparency Act (CTA) are excessive and overly burdensome, particularly for small businesses,” said Senator Tillis. “This commonsense legislation delays these unreasonable standards until January 1, 2026 for small business owners, providing further time for the courts to continue their examination of the constitutionality of the CTA.”
“Wyoming’s small businesses are the cornerstone of our state’s economy, yet Biden-era red tape continues to threaten Main Street,” said Senator Lummis. “It’s time for us to dethrone Biden’s unelected bureaucrats and cut red tape to create an environment where small businesses thrive, not drown in a sea of regulations.”
“Alabama’s small businesses do more than just keep our state running — they employ our friends and neighbors, provide invaluable goods and services, and make our communities and state so special,” said Senator Britt. “This commonsense legislation would pare back unnecessary and costly regulations while providing needed clarity and reprieve to job creators across Alabama and the nation.”
“Small businesses create jobs and power our economy,” said Senator Ricketts. “They deserve fair and clear rules, not burdensome and costly regulations. This bill cuts red tape and ensures our job creators can focus on growing their businesses, not navigating bureaucratic hurdles.”
“Small businesses are the backbone of our rural communities, and with limited staff and resources, the current reporting requirements place an unnecessary burden on our businesses,” said Senator Moran. “Extending the filing deadline allows small businesses the additional time they need to comply with updated guidelines and avoid harmful penalties.”
Representative Zach Nunn (R-Iowa) led companion legislation in the House, which passed on Monday by a vote of 408-0.
“Iowa’s economy is driven by small businesses – more than half of Iowans are employed by Main Street,” said Representative Nunn. “D.C. bureaucrats insist businesses comply with onerous red tape without considering the burden it puts on business operations. That has to change. Thank you, Chairman Scott, for joining me in this fight to roll back unnecessary regulations and simplify requirements for job creators while still adhering to the law.”
BACKGROUND:
The Corporate Transparency Act was signed into law as part of the FY21 National Defense Authorization Act and established new reporting requirements around beneficial ownership for businesses.
During implementation of the rule, the U.S. Department of Treasury Financial Crimes Enforcement Network (FinCEN) failed to notify small businesses of the new reporting requirements. According to a survey by the National Federation of Independent Businesses (NFIB), 80% of NFIB members have never heard of the new reporting requirements. Complicating matters further, according to the National Small Business Association (NSBA), the average small business owner will spend nearly $8,000 to comply with these new reporting requirements in the first year alone.
On January 23, 2025, the U.S. Supreme Court declined to block the enforcement of these filing requirements. Now, small businesses across the country are expected to comply immediately or face harsh penalties. The Protect Small Businesses from Excessive Paperwork Act of 2025 would extend the filing deadline until January 1, 2026.
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