South Iowa News

The U.S. House of Representatives has passed a bipartisan bill aimed at reducing the paperwork burden on small businesses. The Protect Small Business from Excessive Paperwork Act, introduced by Representative Zach Nunn (IA-03) and co-led by Majority Whip Tom Emmer (MN-06), Representative Sharice Davids (KS-03), and Representative Don Davis (NC-01), seeks to simplify compliance with federal laws and reporting requirements for small enterprises.

"Iowa’s economy is driven by small businesses – more than half of Iowans are employed by Main Street," said Rep. Nunn. "Bureaucrats in D.C. sit in their ivory towers, demanding businesses comply with onerous red tape, without considering the burden it puts on businesses."

The legislation addresses issues stemming from the Corporate Transparency Act of 2020, which introduced new beneficial ownership information (BOI) reporting requirements intended to combat shell companies operated by foreign adversaries. However, many small businesses were not informed about these requirements due to a lapse in communication from the U.S. Department of Treasury Financial Crimes Enforcement Network (FinCEN). A survey by the National Federation of Independent Businesses revealed that 80% of its members were unaware of these new obligations.

"Small businesses are the backbone of our economy, and they shouldn’t have to spend unnecessary time and money navigating burdensome, unclear regulations," said Rep. Davids.

Rep. Nunn hosted FinCEN Director Gacki in Des Moines last year to discuss these BOI requirements with local business owners. At that meeting, it was reported that only 2 million out of approximately 32.6 million small businesses had filed their reports.

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

As per current regulations, non-compliance could result in daily fines up to $591 or imprisonment for up to two years starting January 1, 2025.

"The Protect Small Businesses from Excessive Paperwork Act provides small business owners the time and clarity they need to meet new reporting requirements without incurring penalties," stated Rep. Davis.

The proposed act aims to extend the filing deadline until January 1, 2026, allowing more time for education on these requirements while preventing undue burdens on small business owners.

The bill now moves to the Senate for consideration.