Less than 50 days left to comply with the Corporate Transparency Act (CTA), and a majority of small-business owners still lack clarity.
It's true: by our victory in federal court earlier this year, NSBA members in good standing as of March 1, 2024, are currently exempt from beneficial ownership information (BOI) reports due to be filed under the Corporate Transparency Act (CTA).
While there are less than 50 days to comply with the CTA before its Jan. 1, 2025, deadline, a majority of small-business owners still have questions on this opaque law, where the U.S. Department of the Treasury and its Financial Crimes Enforcement Network (FinCEN) will establish a database of BOI submissions.
In typical fashion of small-business owners bearing the brunt and cost of new, cumbersome regulations, large businesses are not required to submit BOI reports, and, to pile on small business further, Treasury and FinCEN's new database will not require a warrant for search queries - a plain violation of the Fourth Amendment.
NSBA is continuing its fight over the CTA and continues to make headlines for its case to protect small business.
An appeal over the federal court ruling is currently pending, but we expect a ruling on this case soon. In the meantime, here are a number of recent headlines regarding NSBA's efforts over the CTA.
Please read and share the below articles on social channels where you may be active, and read more about NSBA's action against the CTA here.
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Nov. 1
“Both parties want to appeal to the small business community,” says Todd McCracken, the President of the National Small Business Association (NSBA), a non-partisan advocacy group.
“But they take very different approaches.” Republicans, McCracken says, go straight for tax cuts and slashing regulations. Democrats—Vice President Harris especially—want to make it easier to get small businesses going. “Who small business owners support depends on where they are in their life cycle.”
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Oct. 2
Months after the CTA went into effect, a federal court found it unconstitutional. The ruling resulted from a lawsuit filed by the National Small Business United (also known as the National Small Business Association, or NSBA) and Isaac Winkles. On March 1, 2024, U.S. District Judge Liles C. Burke of the Northern District of Alabama, Northeastern Division, found the CTA unconstitutional "because it exceeds the Constitution's limits on Congress' power."
However, while the ruling bars the U.S. Treasury from enforcing the CTA against the Plaintiffs, it does not enjoin enforcement against others. The government has appealed the ruling.
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Oct. 31
Entrepreneur | The Government Is Forcing Business Owners to Share Personal Data or Get Fined $10,000 — So Why Don't More People Know About It?
Some think the law will be overturned in the courts or by Congress. But that's not likely anytime soon. Opposition by legislators in Congress has been weak and ineffective so far. Business groups like the National Small Business Association (NSBA) and the Small Business Association of Michigan have filed lawsuits challenging the law's constitutionality but these lawsuits will take many months before having their day in court. A federal judge in Alabama overturned the law earlier this year, but because the case was not a class action, the ruling only affected the members of a single association — about 65,000 small businesses of the 33 million potentially impacted. The Treasury Department has vowed to carry on with the filing requirement for everyone else and is appealing the judgment.
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Read more CTA press coverage mentioning NSBA here.