12 18 24 Joint Trades Letter CTA Delay CR

Published

December 19, 2024

Share

Dear Speaker Johnson, Minority Leader Jeffries, Majority Leader Schumer, and Minority Leader McConnell:

The undersigned organizations, representing millions of small businesses, write in strong support of language included in the Further Continuing Appropriations and Disaster Relief Supplemental Appropriations Act of 2025 which would delay the Corporate Transparency Act’s (CTA) year-end compliance deadline for existing entities. This provision would provide much-needed relief to the Main Street business community, enable federal regulators to continue their education and outreach efforts, and allow various legal challenges to make their way through the courts.

The CTA mandates that companies disclose and regularly update detailed beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN). It subjects covered entities and their “beneficial owners” to vague and complex reporting requirements while putting their sensitive personal information at risk. Failure to comply can result in fines of over $590 per day, as well as felony charges and up to two years imprisonment.

FinCEN estimates that more than 32 million such entities will be affected by the new law just this year, with an additional 6 million each subsequent year as new businesses are formed. Yet as of December 1, 2024 – just one month before a year-end deadline – FinCEN has received less than 30 percent of the required filings, highlighting the stark education gap when it comes to the compliance obligations mandated by the CTA.

Adding to the confusion are the myriad legal challenges that have been filed throughout the country, and which stand at various stages of the legal process. Notably, a nationwide injunction against the CTA was recently appealed and will be heard by the Fifth Circuit, while an Alabama court ruling that found the CTA unconstitutional is pending appeal in the Eleventh Circuit. Small businesses therefore find themselves in a precarious position: they are currently under no obligation to file, but a single ruling could reverse that dynamic, leaving them with just days to comply with this burdensome and costly statute.

The one-year delay included in the Continuing Resolution bill addresses these challenges, and we strongly encourage lawmakers to pass it.

Sincerely,

AICC, The Independent Packaging Association

American Council of Engineering Companies

American Dental Association

American Farm Bureau Federation

American Financial Services Association

American Foundry Society

American Hotel & Lodging Association

American Lighting Association

American Mold Builders Association

American Pipeline Contractors Association

American Supply Association

American Veterinary Medical Association

AmericanHort

America's SBDC

Associated Builders and Contractors

Associated Equipment Distributors

Associated General Contractors of America

Coalition of Franchisee Associations

Community Associations Institute (CAI)

Construction Industry Round Table

Design-Build Institute of America

Education Market Association

Energy Marketers of America

Family Business Coalition

Foodservice Equipment Distributors Association

Forest Resources Association

Forging Industry Association

Franchise Business Services

GAWDA

Global Cold Chain Alliance

Heating, Air-conditioning and Refrigeration Distributors International (HARDI)

ICSC

Independent Electrical Contractors

Industrial Fasteners Institute

International Association of Movers

International Foodservice Distributors Association

International Franchise Association

International Housewares Association

International Sign Association

Leading Builders of America

Main Street Employers Coalition

Manufactured Housing Institute

Marine Retailers Association of the Americas

Metals Service Center Institute

MHEDA

Nareit National Apartment Association

National Association of Convenience Stores

National Association of Electrical Distributors

National Association of Insurance and Financial Advisors

National Association of Wholesaler-Distributors

National Automatic Merchandising Association (NAMA)

National Beer Wholesalers Association

National Community Pharmacists Association (NCPA)

National Council of Farmer Cooperatives

National Electrical Contractors Association

National Electrical Manufacturers Representatives Association (NEMRA)

National Federation of Independent Business

National Franchisee Association

National Funeral Directors Association

National Grocers Association

National Lumber and Building Material Dealers Association

National Marine Distributors Association

National Multifamily Housing Council

National Roofing Contractors Association

National RV Dealers Association (RVDA)

National Small Business Association

National Tooling and Machining Association

National Utility Contractors Association

National Wooden Pallet & Container Association

North American Association of Food Equipment Manufacturers (NAFEM)

North American Die Casting Association

North American Equipment Dealers Association

Oregon Cattlemen's Association

Outdoor Power Equipment and Engine Service Association

Performance Racing Industry (PRI)

Plumbing-Heating Cooling Contractors - National Association

Power & Communication Contractors Association

Precision Machined Products Association

Precision Metalforming Association

PRINTING United Alliance

Private Investor Coalition

Reserve Organization of America

S Corporation Association

Service Station Dealers of America and Allied Trades

Small Business Legislative Council (SBLC)

Society of Collision Repair Specialists (SCRS)

South Dakota Trust Association

Southeastern Lumber Manufacturers Association

Specialty Equipment Market Association (SEMA)

Subchapter S Bank Association

Textile Care Allied Trades Association

The Association for Hose and Accessories Distribution

The Real Estate Roundtable

The Wholesale Florist and Florist Supplier Association

Tile Roofing Industry Alliance

Tire Industry Association

U.S. Chamber of Commerce

Virginia Cattlemen’s Association

Virginia Farm Bureau

WASDA - Water and Sewer Distributors of America

Water and Sewer Distributors of America

Wholesale Beer Distributors of Texas

Wholesale Florist & Floral Supplier Association

Wine Institute

Wyoming Farm Bureau Federation

Wyoming Stock Growers Association

12 18 24 Joint Trades Letter CTA Delay CR