Senators Katie Britt and Roger Marshall introduce bill to reduce regulation on small businesses

On Monday, U.S. Senator Katie Britt (R-Alabama) announced that she and Roger Marshall (R-Kansas), along with their colleagues Senators Mike Braun (R-Indiana), Ted Budd (R-North Carolina), and Rick Scott (R-Florida) have recently introduced the Small Business Regulatory Reduction Act. This legislation is aimed at helping protect small businesses from the financial burden of top-down federal regulations.

"I'm proud to join my colleagues in introducing this commonsense legislation to alleviate burdens on small businesses, who already have to contend with persistently high inflation on top of the Biden Administration's red tape regime," said Sen. Britt. "From entrepreneurs just starting out to the established, family-owned shops on Main Streets across our great state and nation, I will continue to fight tirelessly for small businesses and the families they support."

"Washington D.C.'s top-down regulatory approach hurts our small businesses – the backbone of our economy – the most," Sen. Marshall said. "Main Street merchants are constantly under attack from this Administration's onslaught of regulations and jumping through unnecessary and costly hoops to provide services to our communities. I am proud to join Rep. Beth Van Duyne in fighting for this important legislation that addresses our small businesses' concerns and stands up to the Administration's relentless attacks."

Sponsors claim that when Washington, D.C., imposes regulations, it comes at a significant cost to locally-owned businesses. In 2022 alone, complying with regulations cost American small businesses an average of $14,700 (adjusted for 2023 dollars) per employee on their payroll. The Small Business Regulatory Reduction Act would alleviate these costs and require the Administration to submit an annual report to Congress outlining the impacts of regulations on small businesses.

"Not later than 60 days after the last day of a fiscal year, the Administrator of the Small Busi[1]9 ness Administration shall submit to Congress a report on any regulations issued by other Federal agencies that have an impact on small business concerns," the bill reads. "Such report shall include rules issued during the fiscal year preceding and the fiscal year following the date of the report and such rules shall be disaggregated by the issuing Federal agency."

Congresswoman Beth Van Duyne (R-TX-24) introduced similar legislation in the U.S. House of Representatives last year.

Small businesses and family run business entities across the country are in the midst of figuring out their reporting requirements under the Corporate Transparency Act (CTA). Critics claim that the CTA places a new compliance burden on main street Americans with an LLC. Failure to comply comes with criminal penalties that could potentially lead to jail time for small business owners. The CTA requires individuals with "substantial control" over a company or an equity position of 25 percent or greater to disclose personal data with the Treasury Department's Financial Crimes Enforcement Network (FinCEN).

LLCs with more than 20 employees and greater than $5 million in revenue do not have to file with FinCEN – only small businesses have to.

According to the U.S. Chamber of Commerce, the Corporate Transparency Act (CTA), aimed at combating illicit financial activity, went into effect on January 1, 2024. Under the act, small businesses across the United States need to file beneficial ownership information reports, also known as corporate transparency reports. The CTA was developed to increase transparency in business ownership and curtail the use of anonymous shell corporations for tax fraud, money laundering, and other illegal financial activity. Reporting companies established before January 1, 2024, have until January 1, 2025, to file their initial corporate transparency reports. This is causing businesses thousands of dollars in reporting costs, and many (perhaps most) aren't even aware of this yet. This is just one example of how new regulations can impact business owners.

Katie Britt was elected to the U.S. Senate in 2022.

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