New Developments for Corporate Transparency Act

On March 1^st, a federal district court in Alabama ruled the Corporate Transparency Act (CTA) unconstitutional. The CTA was passed as part of the 2021 National Defense Authorization Act with an effective date of January 1, 2024. It was intended to stop money laundering and tax evasion by requiring new reporting of “beneficial owners” of certain U.S. and non-U.S. companies doing business in the U.S. (read our previous article HERE).

For reference, in 2022 the National Small Business Association (NSBA) sued the U.S. Treasury Department, challenging the CTA’s mandatory disclosure requirements. U.S. District Court Judge Liles C. Burke granted summary judgement for the NSBA, ruling the CTA unconstitutional and enjoining the government from enforcing the CTA against the NSBA and its members. It’s important to note that the ruling is limited to the plaintiffs in the case – the NSBA and its members – and the Treasury Department has stated its position that the CTA remains in effect for all other reporting companies.

We will continue to monitor the progress and provide updates as they become available. In the meantime, contact us at info@ppandco.com or (408) 287-7911 if you have questions or need assistance with your specific situation.