Reversing a district court, the Eleventh Circuit held Tuesday, Dec. 16, that the Corporate Transparency Act (CTA), which mandated beneficial ownership information (BOI) reporting, is constitutional and remanded the case for further proceedings.
In National Small Business United, et al. v. U.S. Department of the Treasury, et al., the court found that Congress has the power to enact the CTA under the Commerce Clause of the U.S. Constitution.
“In short, the CTA is a constitutional exercise of Congress’s enumerated power to regulate interstate commerce,” the court stated. “Because it is directed at the ownership and maintenance of corporations, it is a regulation of economic activity. And Congress rationally concluded that this activity has a substantial aggregate impact on interstate commerce.”
The CTA also does not violate the Fourth Amendment, as the National Small Business Association (NSBA) had claimed, according to the court. The case involves about 65,000 small businesses that were NSBA members as of March 1, 2024. Read more.