The Corporate Transparency Act (CTA) is an unconstitutional law imposing undue burdens on small business.
This week, NSBA joined more than 150 prominent trade associations in a letter to House Speaker Mike Johnson (R) urging delay of the Corporate Transparency Act’s (CTA’s) year-end compliance deadline.
With the CTA taking formal legal effect this year under the direction of the U.S. Department of Treasury and the Treasury’s Financial Crimes Enforcement Network (FinCEN), new businesses formed any time in 2024 must file beneficial owner information (BOI) reports, including disclosures of personal information on decision makers of their enterprise, within 90 days of formation.
Under the current form of the CTA, businesses formed before 2024 will have until Jan. 1, 2025, to file enterprise BOI reports.
In addition to costly compliance and persistent lack of clarity regarding beneficial owner definitions, NSBA has repeatedly expressed concerns to Treasury and FinCEN related to how the CTA justification to stem money laundering and other financial evasions places undue burdens on small business owners – a position consistently supported by a growing coalition of prominent trade associations.
With larger businesses exempt from BOI filings, this year, NSBA won a lawsuit over the CTA in federal court for its unconstitutional justifications and effects.
By this victory for small business, NSBA members who were part of NSBA before March 1, 2024, are currently exempt from CTA compliance requirements, including filing BOI reports.
Despite a promise to accept the summary judgment ruling in favor of NSBA’s case against the Treasury and FinCEN, the Department of Justice (DOJ) filed an appeal against the ruling on behalf of the agencies, disposition of which remains pending at this time.
While NSBA remains optimistic regarding the outcome of the appeal and hopeful the current exemption will be extended to members joining after the March 1 deadline, as well as to all small-business owners, NSBA has continued to pursue additional avenues of action over the CTA, including urging delays of its effects and requirements through Congress.
Currently, there is legislation (H.R. 9278) pending from Rep. Zach Nunn (R-Iowa) supported by NSBA that would delay the CTA by an additional year to reconcile FinCEN and Treasury’s lack of education and engagement with small-business owners regarding its effects.
Read the full trade association coalition letter urging Congress to take action against the CTA by Congressman Nunn’s legislation or additional means, including a complete repeal of the CTA, here, and follow NSBA as we continue or work to protect small business from unconstitutional and unjustifiable rules and regulations.
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