An appeal against NSBA's victory for Small Business over the CTA remains pending, and the fight against unconstitutionality continues.
On Friday, Sept. 27, NSBA's legal team argued the merits of its case against Treasury over the unconstitutionality of the Corporate Transparency Act (CTA) in the Eleventh Circuit Court of Appeals in Birmingham, Ala. This was the second step in NSBA’s federal lawsuit against the CTA.
Following the Department of Justice’s (DOJ's) appeal of NSBA's initial victory over the CTA handed down by the U.S. District Court of Northern Alabama on March 1, 2024, arguments continued before a three-judge panel late last month.
During this hearing, the DOJ legal team asserted the CTA is legal and necessary to stem money laundering and tax evasion.
NSBA's team countered and maintained that, through the CTA, the federal government is seizing a power traditionally belonging to the states - a violation of the 10th Amendment.
Lead Attorney Tom Lee furthered NSBA's points by emphasizing how information reporting obligations imposed on U.S. citizens under the CTA violates the 4th Amendment’s protection against unreasonable searches and seizures.
According to the U.S. District Court's decision from NSBA's initial victory for small business over the CTA, NSBA members who joined by March 1, 2024, are currently exempt from beneficial ownership information reports due under the unconstitutional law.
NSBA remains hopeful this exemption will be expanded to new members and all small-business owners.
It is expected the appeals court will rule on the case by the end of the year.
Follow NSBA as we continue our work over the CTA, and learn more about how this undue law harms small business here.
