Corporate Transparency Act Implementation Hits Speedbump

On March 1, U.S. District Judge Liles C. Burke for the Northern District of Alabama issued a ruling holding the Corporate Transparency Act (CTA) unconstitutional as it pertains to the roughly 65,000 members of the National Small Business Association (NSBA), who were the plaintiffs in the case.

The CTA is the federal law that went into effect on January 1 of this year and requires an estimated 35 million small business owners to file certain personally identifiable information with the United States Department of Treasury’s Financial Crimes Enforcement Network (FinCEN).

The District Court’s ruling is a significant win for the Main Street business community, but it’s important to note that the ruling only pertains NSBA members. Soon after the court’s decision, FinCEN announced that it plans to continue to enforce the law with respect to all other small businesses that meet the law’s parameters.  

ICSC and other small business groups continue to encourage FinCEN to suspend implementation of the law pending resolution of appeals in the case, while also urging Senate leaders to pass the delay bill. The delay bill, led by Representatives Joyce Beatty (D-OH-3) and Zach Nunn (R-IA-3), passed the U.S. House by a vote of 420-1 last year.

ICSC members should continue to seek guidance from legal counsel to determine if they are responsible for complying with the law’s requirements.