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Leading Corporate Transparency Act (CTA) Reform:
A few weeks prior to President Trump’s inauguration, nearly 33 million small businesses faced a pressing deadline to file beneficial ownership information (BOI) reports with the Financial Crimes Enforcement Network (FinCEN). Failure to do so would have resulted in a daily civil penalty of $591 per day of incompliance or a criminal conviction which could entail a fine of up to $10,000 or two years of imprisonment. In 2024, NLBMDA launched a robust education campaign to ensure that LBM dealers were aware and achieved compliance with the law in order to avoid these steep penalties. Despite millions of small businesses unaware of their obligations under the law, federal officials pressed forward with a January 1st, 2024, deadline. In late 2024, the National Federation of Independent Business (NFIB), filed suit against the federal government which resulted in a federal judge issuing a national injunction blocking enforcement of the CTA. NLBMDA closely monitored every stage of the litigation routinely provided updates to ensure members remained in the know.
In January, NLBMDA and its coalition partners sent a letter to the White House and Secretary Scott Bessent emphasizing the need for regulatory relief as it became clear litigation in the courts would likely take months to play out. Following NLBMDA efforts, the Treasury Department announced plans to significantly rescope how the CTA would be interpreted. Today, all domestic reporting companies are exempt from CTA BOI filing requirements, a major reversal that signals the administration’s desire to eliminate rulemakings that increase regulatory burdens for Main Street businesses. A final rulemaking is expected later this year that will finalize the new interpretation of the CTA.
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