WASHINGTON, D.C. (Dec. 11, 2020) – The National Federation of Independent Business (NFIB), the nation’s leading small business advocacy organization, issued the following statement from Vice President of Federal Government Relations Kevin Kuhlman in response to the inclusion of the Corporate Transparency Act in the NDAA Conference Report (Title LXIV, Establishing Beneficial Ownership Information Reporting Requirements in H.R. 6395, the William M. “Mac” Thornberry National Defense Authorization Act (NDAA) for Fiscal Year 2021). NFIB submitted letters of opposition to the House and Senate.
“The title included in this legislation contains the Corporate Transparency Act, which is unrelated to the defense bill and creates a burdensome regulation for small businesses that are already struggling due to the COVID-19 pandemic. This legislation would burden small businesses with 12.2 million new initial paperwork hours at a cost of $531 million, something small business employers simply cannot afford as they deal with the ongoing COVID-19 pandemic. According to NFIB research, one in five small businesses said they would have to close their doors if current economic conditions don’t improve. Now is not the time for Congress to add an additional regulation that will require more paperwork from owners when they are working hard to stay open.”
The Corporate Transparency Act provision within the NDAA Conference Report requires corporations and limited liability companies (LLCs) with 20 or fewer full-time employees to file new reports with the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) containing the personally identifiable information of small business owners and update that information periodically. The provision raises privacy concerns for small business owners as it establishes a first of its kind federal registry of small business owners.
When NFIB surveyed its membership concerning beneficial ownership reporting, 80% opposed the idea of Congress requiring small business owners to file paperwork with the Treasury Department each time they form or change ownership of a business.