There is a new development regarding the Corporate Transparency Act. A Federal court ruled the Corporate Transparency Act is unconstitutional.
See below from the Community Associations Institute (CAI):
“In a stunning decision late last week a federal court ruled the Corporate Transparency Act (CTA) unconstitutional.
On March 1, U.S. District Court Judge Liles C. Burke issued a 53-page opinion granting summary judgment in a lawsuit filed by the National Small Business Association. In his decision, Burke wrote the Corporate Transparency Act “exceeds the constitution’s limits on the legislative branch and lacks a sufficient nexus to any enumerated power to be a necessary or proper means of achieving Congress’ policy goals.”The court then permanently directed the government to stop enforcement of the CTA against the plaintiffs and ordered a hearing on awarding litigation costs.
While it is likely this litigation will continue in the federal court system, the initial decision is a victory for small businesses. More importantly, the decision means compliance with the CTA is in question.
Attorneys will interpret how this impacts community associations.This lawsuit provides additional uncertainty and lack of clarity regarding CTA. Now is a great time to contact your Senator and urge them to delay implementation of the Corporate Transparency Act and clarify whether community associations are exempt from CTA reporting requirements.”
Resources:
CAI Corporate Transparency Act Resources
Call to Action = Contact your Senator Today
Federal Court Ruling
National Small Business Association Announcement
Forbes Article
For the time being compliance with the CTA is on hold according to the law firm of Peyton Bolin. No need to take action now and we will wait and see if Congress exempts community associations in the future. In our original blog post titled Do HOA and Condo Communities have to comply with the new 2024 FinCEN regulations we said to wait until June 30th to see if there is an exemption. We will continue to keep you updated with new developments.