Farmers and ranchers have received a temporary reprieve from federal reporting requirements under the Corporate Transparency Act (CTA), thanks to a nationwide injunction issued by the U.S. District Court for the Eastern District of Texas. The ruling delays enforcement of the Beneficial Ownership Information filing requirements, which were set to take effect Jan. 1, 2025.
The CTA mandates that businesses, including many family farms and ranches, report ownership information to the U.S. Treasury’s Financial Crimes Enforcement Network. Supporters argue the law combats financial crimes, but agricultural groups say it places an unnecessary burden on small businesses.
“Farmers and ranchers across the country have faced great uncertainty since the passage of the Corporate Transparency Act in early 2021 and as the Beneficial Ownership Information regulations have been written,” said American Farm Bureau Federation President Zippy Duvall. “Questions are swirling about who is required to file and who will have access to the confidential data being collected. Farm Bureau has long fought against the mandated disclosure of farmers’ private business information to the federal government in a number of different scenarios. For a second time this year, a federal court has ruled the CTA oversteps the Constitution on that front. We appreciate the temporary reprieve provided by the injunction and hope Congress can take a cue from the courts in the coming weeks to provide a more permanent resolution to this problematic policy.”
The injunction stems from Texas Top Cop Shop, Inc. v. Garland, a lawsuit challenging the CTA’s legality. Differences in court rulings over the law’s constitutionality suggest the case could eventually reach higher courts.
While the injunction provides temporary relief, agricultural groups continue to advocate for a long-term legislative solution. Growers are encouraged to consult legal and financial professionals to determine how the CTA may affect their operations in the future.
Sources: Southeast AgNet and American Farm Bureau Federation
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