NPGA Urges Congress to Delay the Corporate Transparency Act

Earlier this month, a Federal District court judge ruled that the Corporate Transparency Act (CTA), which became law on January 1, 2021, was unconstitutional. The Act mandates that over 32 million small businesses hand over sensitive, private data to the Federal government’s Financial Crimes Enforcement Network (FinCEN), a branch of the Department of the Treasury. Failure to comply with the law would have saddled these businesses with significant legal headaches and potential criminal penalties. However, this ruling only narrowly applies to the plaintiffs in this case, the National Small Business Association (and the 65,000 businesses they represent), leaving tens of millions of businesses still subject to these reporting requirements.

This week, NPGA joined a coalition of 125 organizations that sent a letter to the U.S. Senate urging the passage of legislation that would delay the implementation of the CTA for one year. This past December, the House passed a companion bill with an overwhelming margin of 420-1. A one-year delay of CTA’s filing deadline would allow the court process to progress through the Appellate and Supreme Court and provide FinCEN and the business community more time to educate small business owners regarding these reporting requirements.

For more information, contact Rhett Johnson, NPGA’s Senior Manager of Legislative Affairs.