Palmetto State News

U.S. Senator Tim Scott has introduced a new piece of legislation aimed at easing the regulatory burden on small businesses. The Protect Small Businesses from Excessive Paperwork Act of 2025 proposes to extend the deadline for reporting beneficial ownership information (BOI) until January 1, 2026. This extension is intended to give the U.S. Department of Treasury additional time to educate business owners about new requirements and assess current decisions under the Biden administration.

Senator Scott emphasized that "small businesses are the backbone of our economy," and this bill seeks to ensure they are not overwhelmed by unclear regulations. He was joined in this legislative effort by several members of the Senate Banking Committee, including Senators Mike Rounds, Thom Tillis, Bill Hagerty, Cynthia Lummis, Katie Boyd Britt, Pete Ricketts, Jim Banks, and Kevin Cramer. Senators Jerry Moran and James Lankford also support the bill.

Senator Tillis remarked on the excessive nature of current BOI requirements under the Corporate Transparency Act (CTA), describing them as "overly burdensome." He noted that delaying these standards would provide courts more time to examine their constitutionality.

The bill has garnered support from other senators who have voiced concerns about regulatory impacts on small businesses in their states. Senator Lummis criticized what she described as "Biden-era red tape" affecting Wyoming's small businesses. Similarly, Senator Britt highlighted how Alabama's small enterprises contribute significantly to local communities and economies.

In addition to Senate backing, Representative Zach Nunn led companion legislation in the House that passed with unanimous support. Representative Nunn pointed out that over half of Iowans work for small businesses affected by these regulations.

The Corporate Transparency Act was initially signed into law as part of the FY21 National Defense Authorization Act and introduced new BOI reporting requirements for businesses. However, many small business owners remain unaware of these obligations due to insufficient notification efforts by FinCEN within the U.S. Department of Treasury.

According to surveys conducted by organizations like NFIB and NSBA, compliance costs for these reporting requirements could reach nearly $8,000 per business in their first year alone. With immediate compliance expected following a recent Supreme Court decision not to block enforcement actions against non-compliant entities, extending deadlines through this proposed act aims at providing relief while maintaining legal adherence.