Repealing the Corporate Transparency Act: Small Business Owners Call for Ease of Reporting Requirements

Small businesses have long been burdened by reporting requirements, but a new piece of legislation aims to ease that burden, specifically targeting the Corporate Transparency Act (CTA). The National Federation of Independent Business (NFIB) supports this legislation and believes it’s necessary to repeal the CTA.

The CTA imposes significant burdens on small business owners by subjecting them to civil and criminal penalties for minor paperwork violations. Additionally, it grants law enforcement agencies access to a vast database containing the private information of millions of small business owners. NFIB Vice President of Federal Government Relations, Jeff Brabant, believes that the CTA is beyond repair and fully supports the repeal efforts led by Sen. Tuberville and Rep. Davidson.

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 the Financial Crimes Enforcement Network (FinCEN). This rule went into effect on January 1, 2024, and is estimated to impact 32.6 million small businesses in the 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 is advocating for its repeal to alleviate the regulatory burden on small businesses.