South Iowa News

U.S. Representative Zach Nunn has introduced a bipartisan bill aimed at reducing paperwork for small businesses. The Protect Small Business from Excessive Paperwork Act, co-sponsored by Representatives Tom Emmer, Sharice Davids, and Don Davis, seeks to simplify compliance with federal laws and reporting requirements for small businesses.

"Iowa’s economy is driven by small businesses – more than half of Iowans are employed by Main Street," stated Rep. Nunn. He emphasized the need to reduce unnecessary regulations while maintaining legal compliance.

The Corporate Transparency Act, passed in 2020, introduced new beneficial ownership information (BOI) reporting requirements to combat shell companies linked to foreign adversaries. However, the U.S. Department of Treasury Financial Crimes Enforcement Network (FinCEN) did not adequately inform small businesses about these new obligations. A survey by the National Federation of Independent Businesses revealed that 80% of its members were unaware of the requirements. The National Small Business Association reported that compliance could cost nearly $8,000 in the first year alone.

"Small businesses are the backbone of our economy, and we should create policies that support them, not penalize them," said Rep. Davids. She highlighted the importance of allowing business owners time to adapt to new regulations.

Rep. Nunn organized a roundtable with FinCEN Director Gacki in Des Moines on May 31, 2024, discussing BOI requirements with local business owners. At this event, it was noted that only 2 million out of approximately 32.6 million small businesses had submitted their reports.

"Small businesses in Minnesota and across the country desperately need clarity on FinCEN’s complicated and costly beneficial ownership reporting requirements," commented Rep. Emmer.

Despite low compliance rates, FinCEN has not extended the deadline for filing reports as of January 1, 2025. Non-compliant business owners face daily fines up to $591 and potential jail time.

"Small businesses are the backbone of our economy and should not be burdened with unnecessary paperwork," said Rep. Davis.

The U.S. Supreme Court recently declined to block enforcement of these filing requirements, mandating immediate compliance from small businesses nationwide.

NSBA President Todd McCracken expressed support for Rep. Nunn's efforts: "On behalf of NSBA’s 65,000 members... I cannot stress how important some kind of certainty is on filing these Beneficial Ownership Information reports."

Tom Sullivan from the U.S. Chamber of Commerce praised Representatives Nunn and Davids for introducing legislation granting an additional year for small businesses to understand their obligations under the law.

The Protect Small Business from Excessive Paperwork Act proposes extending the filing deadline until January 1, 2026, allowing time for education on reporting requirements while preventing undue burdens on small enterprises.