Ohioans Helped Lead The Fight To Stop It
On October 22, The United States House of Representatives passed the Corporate Transparency Act of 2019 (H.R. 2513), by a vote of 249-173 attempts to shift a paperwork reporting requirement from big banks to America’s smallest businesses, saddling them with an additional 131.7 million hours of paperwork at a cost of $5.7 billion over the first 10 years.
“The House today not only shouldered millions of small business owners with a tremendous compliance burden but put their personally identifiable information at serious risk,” said NFIB President & CEO Juanita D. Duggan. “The reporting requirements and devastating financial penalties will affect only small businesses, from farmers to franchisees to the mom-and-pop retail shop down the street. It is a big-government solution in search of a small-business problem, and we will not cease our efforts to stand up for small businesses against this serious threat.”
To make matters worse, a last-minute amendment was included in the final bill that would allow the Treasury Department’s Financial Crimes Enforcement Network to make public certain information, potentially including the individual names, addresses, birth dates, and even the driver’s license numbers of small business owners, despite months of rhetoric about protecting the privacy of small business owners.
The Corporate Transparency Act of 2019 requires small corporations and limited liability companies with 20 or fewer employees to complete and submit annual paperwork which includes the personally identifiable information of each business owner to the Treasury Department’s Financial Crimes Enforcement Network upon the creation of the business and periodically for the life of the business. Failure to comply is a federal crime with civil penalties up to $10,000 and criminal penalties of up to three years in prison.
In its review of the bill, the nonpartisan Congressional Budget Office wrote, “Because of the high volume of businesses that must meet the new reporting requirements and the additional administrative burden to file a new report, CBO estimates that the total costs to comply with the mandate would be substantial.” The Corporate Transparency Act would generate between 25 million to 30 million new reports annually.
A recent NFIB study found that, under the Corporate Transparency Act of 2019, small businesses would face $5.7 billion in new regulatory costs and an additional 131.7 million hours of paperwork if the legislation is signed into law.
Thirty-six business groups including NFIB urged members of the U.S. House of Representatives to vote “no” on the Corporate Transparency Act of 2019 (H.R. 2513).
Leading up to the vote there were several pieces that ran in opposition to the bill:
- In Northwest Ohio, NFIB member Dave Boothe also wrote a letter to the editor in The Toledo Blade, explaining how the act will be a burden to small businesses.
- And, in Southwest Ohio, Steve Schramm, chairman of the board of directors of the NFIB authored a piece in The Cincinnati Enquirer on the bill as well.
- Congressman Davidson also penned an op-ed about the harmful aspects of the bill to small-business owners.
Congressman Warren Davidson speaks with members in Greenville, Ohio about the issues associated with the Corporate Transparency Act of 2019.
While all members of Congress in Ohio who attend one of NFIB’s Area Action Councils voted “No” on the bill, several members of Ohio’s Congressional delegation stood strong in opposition to the bill:
- Congressman Warren Davidson (OH-8) was one of the leaders in opposition and offered the Republican Motion to Recommit, which would’ve required a subpoena for law enforcement to access business owners’ personal information. The House proceeded with 10 minutes on the Davidson (OH) motion to recommit with instructions. The instructions contained in the motion seek to require the bill to be reported back to the House with an amendment to require a court-issued subpoena for specified requests in the underlying bill.
- Congressman Steve Stivers (OH-15) also spoke out against the bill on the House floor, which took courage, as he was a lead sponsor of a non-controversial bill (H.R. 2514, the COUNTER Act) that was rolled into this controversial bill (H.R. 2513, the Corporate Transparency Act) in an effort to gain more Republican votes.
- Congressman Anthony Gonzalez (OH-16) also was a leader in opposition. He attempted to offer an amendment to require a small business cost-benefit analysis, but the Rules Committee did not allow the amendment, ruling it out of order with no explanation.
The bill now heads to the United States Senate. Already, in Lima, Ohio, the owner of Lima Pallet Company, Tracie Sanchez, met with a staff member from Senator Brown’s office. As Ranking Member of the Senate Banking Committee, he will be a key figure in the Senate consideration.
We appreciate all the efforts of these members of Congress and our own members in battling this piece of legislation. Make sure to watch for future e-mails on how you can help in the fight. To read more on NFIB’s efforts to protect small business privacy, visit https://nfib.com/protectprivacy.
