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Judge halts Corporate Transparency Act implementation

On Dec. 3, a federal judge in Texas issued a preliminary injunction to halt implementation of the Corporate Transparency Act (CTA) reporting requirements.

The CTA requires incorporated businesses to file reports detailing which individuals are “beneficial owners” of their businesses, with civil penalties and potential jail time for those who do not comply.

In the case Texas Top Cop Shop Inc. vs. U.S., Judge Amos Mazzan of the U.S. District Court for the Eastern District of Texas found that the requirements are likely unconstitutional on the grounds that they are outside Congress’ power. Mazzan noted that the law is an attempt by the federal government to monitor companies created under state law and ends anonymity afforded to individuals in some states.

“For good reason, plaintiffs fear this flanking, quasi-Orwellian statute and its implications on our dual system of government,” Mazzan wrote.

Farm Bureau welcomed the ruling, which is effective nationwide until resolution of the case.

“Farm Bureau has long fought against the mandated disclosure of farmers’ private business information to the federal government in a number of different scenarios,” AFBF President Zippy Duvall said in a prepared statement. “For a second time this year, a federal court has ruled the CTA oversteps the Constitution on that front. We appreciate the temporary reprieve provided by the injunction and hope Congress can take a cue from the courts in the coming weeks to provide a more permanent resolution to this problematic policy.”

To read the ruling click here.

To read about CTA requirements, click here.

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