NDAA Awaits President’s SignatureDecember 16, 2020
On Dec. 11, the U.S. Senate passed 84-12 the conference report for the National Defense Authorization Act (NDAA). The bill now sits on the president’s desk awaiting his signature–something he has threatened to withhold despite the Senate having veto-proof majority support of the measure.
Unfortunately, while NSBA typically supports passage of the NDAA, a provision was added in at the last minute which would create mandate new, massively burdensome reporting requirements on ONLY small-business owners. The provision, so-called “beneficial ownership” was included in the House-passed version of the NDAA, and ultimately included in the final conference report.
In recent years, the NDAA has attracted numerous, often controversial, and sometimes non-germane floor amendments, though few receive floor time. This year was no different, and NSBA raised concerns about the inclusion the provision, the Corporate Transparency Act, offered by Rep. Carolyn Maloney (D-N.Y.) to the House NDAA.
The inclusion of this amendment is devastating news to the millions of small-business owners who will be faced with an additional $5.7 billion in regulatory paperwork. Throughout the process, NSBA urged lawmakers to oppose inclusion of the Corporate Transparency Act, highlighting that it will impose burdensome, duplicative reporting burdens on the smallest businesses in the U.S. and it threatens the privacy of law-abiding, legitimate small-business owners.
Beneficial ownership provisions would require ONLY the smallest businesses to file new reports and register significant personal identifying information for all owners—including their names, dates of birth, and addresses with the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) detailing all “beneficial owners” of the company. Failure to comply with these reporting requirements would be a federal crime with civil penalties of $500 per day up to $10,000 and criminal penalties of up to 4 years in prison.
NSBA remains opposed to the legislation and is deeply disappointed with its inclusion in the unrelated NDAA.