NACS, along with the National Retail Federation (NRF) and the Restaurant Law Center, filed an amicus brief last week in an attempt to ensure that small businesses don’t have to meet complex and invasive filing requirements under the Corporate Transparency Act. The brief follows a district court case (Texas Top Copy Shop v. Merrick Garland, Attorney General of the United States) ruling from 2024, when a Texas court blocked the Corporate Transparency Act nationwide. NACS previously filed a brief on this case in late 2024.
NACS, NRF and the Restaurant Law Center previously argued in favor of the injunction put in place.
The original regulation requires certain U.S. entities and foreign entities registered to do business in the United States to submit beneficial ownership information (BOI) reports to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN). For small businesses, these reporting requirements require a significant amount of complex paperwork that is burdensome to meet.
The brief was filed with the U.S. Supreme Court, and the Court will now decide whether to keep the law blocked while the full litigation of the case takes place.
[NACS explained the implications of the rule in 2024.]
NACS’ brief states:
"Eliminating the District Court’s preliminary injunction would result in consequences to amici’s members that cannot be reversed. If the Government’s Application is granted, Respondents and companies subject to the CTA and Reporting Rule will be required to comply with the reporting obligations as soon as the District Court’s order is stayed or otherwise face the potential civil penalties up to $10,000 or imprisonment of up to two years. Small businesses who have deferred their compliance obligations in light of the injunction could therefore be confronted with potential imprisonment for simply taking no action.
The Act itself creates new obligations for reporting companies that come at a cost. Such costs include the financial burden and time to prepare the requisite beneficial ownership information (BOI) submission and the retention of professional advice to aid in the submission."