NLBMDA Member Alert:

5^th Circuit Court Panel Reinstates CTA Nationwide Injunction

Three days after the Fifth Circuit ruled that the nationwide CTA injunction would be halted in Texas Top Cop Shop, Inc. v. Garland, a merits panel for the Fifth Circuit has now vacated the order and has reinstated the nationwide injunction halting enforcement of the Corporate Transparency Act (CTA). This new order means that businesses are no longer required to comply with the previously announced January 13^th deadline for filing Beneficial Ownership Information (BOI) reports with FinCEN.

 In its reasoning the court stated, “…in order to preserve the constitutional status quo while the merits panel considers the parties’ weighty substantive arguments, that part of the motions-panel order granting the Government’s motion to stay the district court’s preliminary injunction enjoining enforcement of the CTA and the Reporting Rule is VACATED.”

If the government elects not to appeal this new order to the U.S. Supreme Court, at a minimum, the temporary injunction will now remain in place through the end of March 2025. The National Lumber and Building Material Dealers Association (NLBMDA) applauds resumption of the nationwide injunction. “In just one week, small businesses have been informed of three separate deadlines to file with FinCEN.” Said NLBMDA President Jonathan Paine. “Vacating the 5^th Circuit December 23^rd order was a necessary step to help provide stability and clarity for the millions of businesses yet to file.”

FinCEN has confirmed that filing BOI reports remains voluntary while the current court order remains in effect. “On December 26, 2024, a different panel of the U.S. Court of Appeals for the Fifth Circuit issued an order vacating the Court’s December 23, 2024 order granting a stay of the preliminary injunction. Accordingly, as of December 26, 2024, the injunction issued by the district court in Texas Top Cop Shop, Inc. v. Garland is in effect and reporting companies are not currently required to file beneficial ownership information with FinCEN.”

NLBMDA will continue to closely monitor the latest developments and provide alerts as needed. For questions, please contact Matthew Delaney, NLBMDA Government Affairs Coordinator: mdelaney@dealer.org.