Idaho Secretary of State Phil McGrane, Montana Secretary of State Christi Jacobsen, and Wyoming Secretary of State Chuck Gray joined forces with a coalition of secretaries of state nationwide taking a stand against federal overreach and urging President Donald J. Trump to support repeal of the Corporate Transparency Act (CTA).
In a letter sent on February 18, 2025, the secretaries lambasted the CTA for saddling small businesses with excessive regulations and bureaucratic red tape and noted that “implementation of the Act by the Biden administration has been an absolute train wreck.”
Until the passage of the CTA, this kind of regulation belonged exclusively to the states. The Act effectively created a new category of federal corporate regulation that authorizes the disclosure of individuals’ private information to foreign governments and regulatory agencies for the express purpose of criminal investigation without court authorization or agency justification.
The new law unsurprisingly sparked extensive litigation. Although the so-called “Beneficial Ownership Information” (BOI) reporting rule for small businesses had been temporarily stayed by a lower court, on the same date the letter was sent to President Trump, the U.S. District Court for the Eastern District of Texas issued its decision to allow the rule to go into effect even as the lawsuit over its constitutionality advances through the court system. In other words, while the BOI reporting rule may ultimately be struck down by the courts, millions of small businesses will still need to comply and file their reports no later than March 21, 2025.
The secretaries’ letter notes that the back and forth between the courts has further undermined their ability to convey accurate information and notes that while high-grossing companies and nonprofits are exempt, American small business owners are forced to shoulder a compliance nightmare. This regulatory framework not only risks severe penalties but also places an immense administrative burden on those already struggling to compete.
“Since the enactment of the CTA, our offices have received frequent communication
from constituents expressing concerns, including tax attorneys and certified public
accountants on their behalf,” the letter stated. The Financial Crimes Enforcement Network (FinCEN)— the federal regulatory agency charged with enforcing the new small business reporting rules—has been “unable to provide clarity and sufficient support.” The secretaries further stated their grave concerns that their states’ businesses are left “bewildered and grasping for answers.”
Due to the expected volume of calls, FinCEN apparently tried to assure all parties that although small business owners who have compliance questions will likely not be able to speak to a live person, a chatbot will be readily available to assist—an excellent comfort to the people who face fines of $10,000 and two years in prison for providing wrong answers.
The letter further cites a staggering estimate: complying with the CTA would require 25 million small business owners to expend over 30 million hours, at a cost nearing $145 million—a number that underscores the inefficiency and misdirected priorities of the current mandate. As one passage in the letter aptly puts it, the Act is “yet another hook for the federal government to pursue and/or punish hardworking Americans.”
In response to these critical issues, a bill has been introduced in Congress—H.R. 8147, titled the “Repealing Big Brother Overreach Act.” This legislation is aimed at dismantling the problematic provisions of the CTA, offering a pathway to alleviate the undue burdens placed on small businesses.
Idaho, Montana and Wyoming’s secretaries of state are joined by those of Alabama, Nebraska, Georgia, New Hampshire, North Dakota, Indiana, Ohio, Iowa, Oklahoma, Kentucky, South Carolina, Louisiana, South Dakota, Mississippi, Tennessee, Missouri, and West Virginia pleading with President Trump to rethink a destructive policy that has left small business owners caught in a web of compliance red tape and legal uncertainty.