Small Business Needs Permanent Regulatory Relief, Too

P resident Trump and Congress gave small businesses historic tax relief in the bill they passed over the summer. They permanently cut taxes for Main Street — a move that will empower millions of small businesses to create jobs, give back to their communities, and grow our economy. But Main Street doesn’t just need permanent tax cuts. Small businesses need permanent relief from over-regulation, too. And one of the most invasive and unnecessary mandates needs to be repealed immediately.

More than 32 million small businesses are staring down the barrel of a gun known as the Beneficial Ownership Information (BOI) Reporting Requirement. Under a federal law passed in 2021, our nation’s smallest businesses must file their personal information into yet another newly created federal database. The law says that if they don’t act quickly, they could face up to two years in prison and $10,000 in fines.

The Treasury Department estimates this single rule would cost America’s small businesses $73 billion over a decade — money that small businesses would rather invest in their people and their communities. Instead, the law requires them to spend even more money on legal compliance, to avoid the potential of massive fines and jail time.

Small businesses shouldn’t be forced to hand over more personal data to the federal government. They already file plenty of reports with federal agencies, state agencies, and local governments. And the new federal database created by this mandate is a disaster waiting to happen. Multiple federal bureaucracies and law enforcement agencies have access to it without being required to first get a subpoena or warrant, creating a privacy, constitutional, and security nightmare.

The simple truth is that this mandate was never necessary. Before that 2021 law, big banks already gathered this information from their small business customers. It also cost them a lot less — just $1.5 billion over ten years. But they convinced Congress to shift that cost and burden to small businesses. That’s right: Wall Street and the big banks lobbied Congress to hit Main Street instead, regardless of the cost to the mom-and-pop shops that create two-thirds of American jobs.

That’s why the National Federation of Independent Business (NFIB) has fought this mandate from the start. Last December, in a lawsuit we brought on behalf of small businesses, a federal court blocked this rule from being enforced. While the Supreme Court later allowed it to go into effect, in another show of support for small businesses, the Trump administration quickly announced in March that it will not enforce this onerous mandate. Following that, in September, FinCEN announced that by the end of this year, it will destroy the unconstitutionally collected BOI data of America’s small businesses and issue a final rule that would exempt U.S. small businesses from BOI reporting requirements.

These major wins for small business owners would not be possible without the Trump administration’s commitment to prioritizing this issue and protecting small businesses. Now, Congress must follow suit. Despite the White House’s quick action, the mandate is still written into federal law. A future administration could easily decide to change course, fining and jailing small business owners. Main Street’s only hope is for Congress to repeal this mandate and remove it from the books forever.

Main Street is counting on our leaders to step up. Congress and President Trump must act quickly and decisively to give 32 million small businesses permanent relief from a particularly painful and pointless government mandate.