Resolution in Support of Repealing the Corporate Transparency Act

WHEREAS, the Corporate Transparency Act (CTA), enacted as part of the National Defense Authorization Act for Fiscal Year 2021, requires millions of small businesses and limited liability companies to report detailed ownership information to the Financial Crimes Enforcement Network (FinCEN); and

WHEREAS, the CTA imposes significant administrative and compliance burdens on small businesses, family-owned companies, and entrepreneurs who already face extensive regulatory requirements, potentially diverting resources away from growing their businesses and creating jobs; and

WHEREAS, the compliance requirements of the CTA disproportionately affect small businesses and startups by requiring them to navigate complex reporting obligations under threat of substantial fines and penalties, while larger corporations and publicly traded companies are exempt from these requirements; and

WHEREAS, the CTA's reporting obligations present privacy concerns by requiring businesses to disclose sensitive personal information, such as names, addresses, and identification numbers of beneficial owners, to a government database that could be vulnerable to misuse, breaches, or unauthorized access; and

WHEREAS, the objectives of the CTA, such as combating money laundering, fraud, and terrorism financing, are already addressed through existing regulatory frameworks, including Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements imposed on financial institutions; and

WHEREAS, the Financial Crimes Enforcement Network (FinCEN) estimates that compliance with the CTA will cost small businesses approximately $6.996 billion over five years for initial Beneficial Ownership Information (BOI) reports, and an additional $2.033 billion over five years for updated BOI reports, averaging to a significant annual financial burden on small businesses nationwide; and

WHEREAS, recent federal court decisions have raised constitutional concerns regarding the CTA, including:

• Texas Top Cop Shop, LLC v. U.S. Department of the Treasury: On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction against the enforcement of the CTA, ruling that the Act is likely unconstitutional as it exceeds Congress's authority under the Commerce Clause and infringes upon state sovereignty protected by the Tenth Amendment.

• National Small Business Association v. Yellen: In March 2024, the U.S. District Court for the Northern District of Alabama granted an injunction preventing the enforcement of the CTA against the plaintiffs, citing similar constitutional concerns regarding federal overreach and the infringement of state powers.

WHEREAS, The United States has appealed from the decisions in Texas Top Cop Shop and in National Small Business Association and it is uncertain whether the reviewing appellate courts will affirm or reverse them, and 

WHEREAS, according to available data, Kootenai County, Idaho, has approximately 5,755 small business establishments, accounting for 99.9% of all establishments in the county, which may be subject to the CTA’s disclosure requirements if the nationwide injunction issued in Texas Top Cop Shop is dissolved on appeal or the U.S. Congress fails to repeal the CTA.  Non-compliance is subject to criminal penalties, including fines up to $10,000 and imprisonment for up to two years for willful non-compliance; and 

WHEREAS, protecting the privacy, economic vitality, and entrepreneurial spirit of our local communities is a priority for this committee and the constituents we represent;

THEREFORE, BE IT RESOLVED, that the Kootenai County Republican Central Committee urges Idaho’s U.S. Congressional Delegation to unanimously support legislation to repeal the Corporate Transparency Act in its entirety; and

BE IT FURTHER RESOLVED that this committee calls upon Congress to prioritize regulatory frameworks that effectively address financial crimes without disproportionately burdening small businesses or infringing upon privacy rights; and

BE IT FINALLY RESOLVED, that copies of this resolution be transmitted by the KCRCC secretary to each member of our Idaho U.S. Congressional delegation, the Idaho Secretary of State Phil McGrane, and Idaho Attorney General Raul Labrador, encouraging them to take swift action in support of repealing the Corporate Transparency Act.

Adopted by the KCRCC on January 28, 2025