House Business Committee backs memorial urging repeal of Corporate Transparency Act

House Business Committee members voted by voice to send House Joint Memorial 3 to the House floor with a "do pass" recommendation, urging Congress to repeal the federal Corporate Transparency Act.

The memorial, introduced by Representative Jordan Redmond, expressed the committee's view that the federal rule has created excessive regulatory burdens for small businesses and interfered with state authority. "The federal government's implementation of the Corporate Transparency Act has led to unneeded regulation of small businesses in Idaho and court challenges have caused great concern across our state," Redmond said for the record.

Nicole Fitzgerald, chief deputy secretary of state, told the committee the Secretary of State's business services division has been overwhelmed by inquiries and implementation problems since the Financial Crimes Enforcement Network (FinCEN) began accepting beneficial‑ownership reports. "Our business serves over 900,000 businesses, and the consequences of the Federal Corporate Transparency Act ... has created significant administrative burdens, caused confusion, sometimes chaos among Idaho business owners, and has really affected our ability to serve our constituents effectively," Fitzgerald said.

The committee heard specifics about implementation timing and legal uncertainty. Fitzgerald summarized the enforcement timeline: FinCEN began accepting reports Jan. 1, 2024; the statutory filing deadline was Jan. 1, 2025; a district court issued a nationwide injunction in early December 2024 in one case, a separate court later stayed that injunction and set a Jan. 13 deadline, and a subsequent judicial panel vacated the stay and suspended the filing deadline. The Supreme Court upheld the CTA in one appeal but another case (Smith v. Department of the Treasury) remained pending, leaving business owners unsure whether and when to file.

Committee members and witnesses described operational impacts in Idaho. Fitzgerald said her office fielded thousands of phone calls tied to the CTA, sometimes 500 calls in a day, producing roughly seven extra hours of phone time over normal volumes; the business services division receives about 70,000 calls per year. She and others also raised data‑security concerns after a reported early‑January breach of Treasury systems by Chinese state‑sponsored actors and warned of fraudulent solicitations that charge roughly $120 to submit information on a business' behalf.

Denise Hansen Lefever, a certified public accountant from Meridian, testified in support of repeal. She told the committee that the CTA forces small businesses to provide personal identifying information to FinCEN, imposes steep penalties — "up to $10,000 in fines and 2 years in jails" for certain failures — and duplicates information already captured by the IRS and state filings.

Supporters framed the memorial as a request that Idaho's congressional delegation pursue repeal. Secretary of State McGrane told the committee he and other state officials had contacted congressional offices, including Senator Risch and Congressman Fulcher, and said the House had recently passed a measure to delay implementation for a year. "I think a repeal is appropriate, and then we should ... continue to work on how do we target these shell companies," McGrane said.

After public testimony and committee discussion, Representative Marvin moved to send House Joint Memorial 3 to the House floor with a "do pass" recommendation. The motion carried by voice vote.

The memorial expresses the committee's request to Congress; it does not change state law and carries no direct state fiscal action. The committee record notes concerns about administrative burden, data security and the pace of federal rulemaking and litigation as chief reasons for the memorial.