COLORADO SPRINGS — The deadline for 33 million small businesses to file a new form with U.S. Treasury Department is in limbo.
The form is called the 'Beneficial Ownership Information (BOI) Report' with a deadline of January 1. The bottom line, the Treasury Department hopes information required on the form will prevent money laundering and financing of terrorism.
We're learning less than one-third of those business have filed the form. Many local business owners had no idea they even needed to file the form.
Imagine being a small business owner and having to pay nearly $600 a day starting in the new year.
"Who was supposed to inform us about this report?" said Carrie Hibbard, Co-Owner of Terra Verde Boutique.
News5 spoke to ten small businesses in Downtown Colorado Springs. Only one owner filed the BOI report. Peri Bolts, Co-Owner of Eclectic Co. says as she was doing it, there was confusion.
"Who needs to do it?" said Bolts. "Are you an LLC that needs to do it? I don't have those answers."
News5 brought those questions to Jandi Kuem, an Attorney at 3i Law.
"For an example, are you a business registered with the Secretary of State or similar entity?" said Kuem. "....Do you fall under any of (the) 23 categories of exemption?"
Currently, there are 23 types of entities exempt from filing this report. Those include the following:
- securities reporting issuer
- governmental authority
- bank
- credit union
- depository institution holding company
- money services business
- broker or dealer in securities
- securities exchange or clearing agency
- Other Exchange Act registered entity
- investment company or investment adviser
- venture capital fund adviser
- insurance company
- state-licensed insurance producer
- Commodity Exchange Act registered entity
- accounting firm
- public utility
- pooled investment vehicle
- tax-exempt entity
- entity assisting a tax-exempt entity
- large operating company
- subsidiary of certain exempt entities
- inactive entity
But, if your entity is not on the list, and you are a small business, chances are you will have to file it.
Your name, address and driver's license are needed from beneficial owners. Those include someone who:
- exercises substantial control over a corporation or limited liability company
- owns 25% or more of the interest in a corporation or limited liability company
- receives substantial economic benefits from the assets of a corporation or limited liability company
Bolts says once you know you have to file it, it doesn't take long to do it.
"I would hate to see more small businesses... close because they didn't do something (as) silly as (filling out) the government form," said Bolts.
Whether or not you file, Keum says it's better to be at least aware of the report, so, talk to experts to find more information.
The law now requiring businesses to file a BOI report was passed in October, 2019. It's called the Corporate Transparency Act of 2019.
According to NBC, the U.S. Department of the Treasury first delayed the compliance deadline of January 1 when a federal court in Texas issued a temporary injunction on December 3, 2024 because of legal challenges. That injunction temporarily blocked the law from being enforced.
The temporary injunction, however, was reversed on Monday by the Fifth Circuit Court of Appeals, which is a court that reviews cases in some southern states, including the following:
- Louisiana
- Mississippi
- Texas
News5 wanted to know how many businesses in Colorado are required to file, and how many of them have filed. News5 reached out to the Treasury Department for that information Friday morning, but we are waiting to hear back.
News5 found out that there were more than 684,000 small businesses in Colorado in 2023, according to the U.S. Small Business Administration. That accounted for more than 99% of the state's businesses.
For more information, click here.
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