Legislation place “unnecessary burdens placed on businesses owned and operated by our fellow Tennesseans.”
Tennessee Secretary of State Tre Hargett recently penned a letter to United States Senator Bill Hagerty with concerns on “unnecessary burdens placed on businesses owned and operated by our fellow Tennesseans.”
The letter acts as an official request to repeal a “requirement under the Corporate Transparency Act” that Hargett says burdens small business operating in both the country and state by forcing them to report information on the Department of treasury’s Financial Crimes Enforcement Network (FinCEN). The requirement was set up as a counterterrorism and anti-illicit finance effort while focusing on businesses with 25 employees or less while exempting certain publicly traded companies, non profits and some large companies.
The letter can be read below:
The Honorable Bill Hagerty United States Senate
The Secretary of State
State Capitol
Nashville, Tennessee 37243-0305
May 03, 2024
615-741-2819 Tre.Harget@tn.gov
Dear Senator Hagerty,
State of Tennessee,
I hope this letter finds you and your colleagues well during these challenging times in our great nation and the world. I appreciate your leadership in the United States Senate and your continued willingness to stand up for Tennesseans and the issues that matter to us.
I am honored to serve as our state's Secretary of State. However, in my role, I have become increasingly concerned with too many unnecessary burdens placed on businesses owned and operated by our fellow Tennesseans. While some of these requirements appear to be the result of well-meaning policymakers, others, unfortunately, appear to be the result of laws enacted without much thought or basis.
Please consider this letter an official request to pursue repealing one such measure: the recently effective requirement under the Corporate Transparency Act, which burdens small businesses operating in the United States by forcing them to report and update beneficial ownership information to the Department of the Treasury's Financial Crimes Enforcement Network (or FinCEN).
Implementation of the Act has been an absolute train wreck. It was enacted, presumably, as a counterterrorism and anti-illicit finance effort, but the law focuses on businesses with 25 employees or less while exempting publicly traded companies meeting specific requirements, many nonprofits, and certain large operating companies. Under this law, the bad actors will either simply not comply, or they will find loopholes to slip through while legitimate hardworking, American small business owners will shoulder the additional burden of navigating unnecessary bureaucratic red tape in an attempt to comply.
Please visit https://www.fincen.gov/boi for further information about these new requirements.
My office has received calls from tax attorneys and CPAs asking for explanations and guidance to make sure their clients are complying. If they are having trouble figuring out the requirements, imagine the difficulties the small mom-and-pop businesses around our states will sos.tn.gov have, especially when they can't afford the services of expensive tax attorneys and CPAs. Not only that, but these firms are also concerned with what liability they may face if errors are made. Another alarming concern is the number of small businesses that have no idea this burdensome requirement even exists, much less the extreme penalties they'll face for noncompliance.
In a recent meeting with FinCEN representatives, we were told they aren't sure how many businesses this will impact therefore they won't be able to track full compliance. We have hundreds of thousands of businesses in our state alone. Additionally, they tell us they plan to be lenient and work with businesses, but that friendliness certainly isn't allowed for in the text of the law.
I fully support rooting out terrorists and other bad actors, but we know they have a solid track record of not following the law. While well-intentioned, this is just another burden placed on honest, hardworking, American citizens. Again, on behalf of all impacted small business owners in Tennessee who are simply trying to be successful in difficult economic times, I request that you immediately pursue repealing the beneficial ownership information reporting requirements under the Corporate Transparency Act. Repealing this requirement is the best and right thing to do for our state and the rest of the country.
Humbly submitted,
Tre Hargett Secretary of State
The Honorable Bill Hagerty United States Senate
The Secretary of State
State Capitol
Nashville, Tennessee 37243-0305
May 03, 2024
615-741-2819 Tre.Hargett@tn.gov
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