U.S. Sen. Tim Scott (R-SC) introduced legislation that would extend the filing deadline for businesses to report beneficial ownership information (BOI).
The Corporate Transparency Act established new reporting requirements around beneficial ownership for businesses. The law was challenged in court, but on Jan. 23, the U.S. Supreme Court declined to block the enforcement of these filing requirements. Currently, small businesses are expected to comply immediately or face penalties.
The Protect Small Businesses from Excessive Paperwork Act of 2025, S. 505, would extend the deadline to Jan. 1, 2026. This would give the U.S. Department of Treasury more time to educate business owners on the new reporting requirements and ensure that they are not overburdened.
“Small businesses are the backbone of our economy, and we need to ensure they have the necessary time and information to comply with reporting requirements from the federal government. This commonsense bill will ensure small businesses are protected and not overly burdened by unclear and unnecessarily complicated regulations – allowing them to focus on serving their customers while following the law,” Scott, chairman of the Senate Banking Committee, said.
The bill, introduced on Feb. 11, was cosponsored by Sens. Mike Rounds (R-SD), Thom Tillis (R-NC), Bill Hagerty (R-TN), Cynthia Lummis (R-WY), Katie Boyd Britt (R-AL), Pete Ricketts (R-NE), Jim Banks (R-IN), Kevin Cramer (R-ND), Jerry Moran (R-KS), and James Lankford (R-OK).
“The beneficial ownership reporting requirements of the Corporate Transparency Act (CTA) are excessive and overly burdensome, particularly for small businesses,” Tillis said. “This commonsense legislation delays these unreasonable standards until January 1, 2026 for small business owners, providing further time for the courts to continue their examination of the constitutionality of the CTA.”
According to a survey by the National Federation of Independent Business (NFIB), 80 percent of NFIB members have never heard of the new reporting requirements. Further, the National Small Business Association found that the average small business owner will spend nearly $8,000 to comply with these new reporting requirements in the first year alone.
U.S. Rep. Zach Nunn (R-IA) introduced companion legislation in the House, which passed on Monday by a vote of 408-0.
“Iowa’s economy is driven by small businesses – more than half of Iowans are employed by Main Street,” Nunn said. “D.C. bureaucrats insist businesses comply with onerous red tape without considering the burden it puts on business operations. That has to change.”