NEWS | Eleventh Circuit Court of Appeals Issues Reversal of Previous NSBA, Small Business Win Over Corporate Transparency Act (CTA)

NSBA will continue to monitor what these circuit court reversals mean for our community - follow us for updates on the Corporate Transparency Act (CTA), including our work urging Congress to codify repeal of this unconstitutional law unduly affecting small business.

DEC. 16, 2025 | On Tuesday, the Eleventh Circuit Court of Appeals ruled against NSBA in its lawsuit against the Corporate Transparency Act (CTA), citing that Congress was within Congress’s Commerce power to enact the CTA. While this latest move is deeply unsettling, NSBA is continuing to analyze the ruling and urging small businesses not to panic – yet.

WHAT THIS MEANS FOR YOU: While this decision could make way for enforcement of CTA in the future, today, U.S. small business do NOT have to file any new beneficial owner reports thanks to Treasury currently opting NOT to enforce the CTA on U.S. businesses.

Earlier this year, Treasury published an interim rule stating they will NOT take any enforcement actions under the CTA on U.S. citizens or domestic reporting companies or their beneficial owners. That is still an interim rule, however, so, if that is not finalized or a new administration repeals the rule, small businesses will be back in Treasury’s crosshairs. Again, for now, however, there is no change to U.S. small businesses.

“Obviously, we are very disappointed by this ruling and its impact on small businesses,” stated NSBA President and CEO Todd McCracken. “While small businesses still remain safe today against the unfair CTA burden, it is now imperative that Congress pass legislation that permanently repeals the CTA.” 

In its decision, the Eleventh Circuit reversed and remanded 3-0 the initial ruling from Judge Liles Burke of the U.S. District Court of the Northern District of Alabama that enjoined enforcement of the CTA.

RELATED | NSBA Secures Victory for Small Business Over the CTA

The Eleventh Circuit found that the law was within Congress’s Commerce power and also rejected NSBA’s request to affirm the case on the Fourth Amendment grounds that Judge Burke had not initially ruled on. 

NSBA has been leading the charge for years against the CTA and filed the first lawsuit in the nation against Treasury over this unfair regulatory regime. Unfortunately, this decision does nothing to stem the massive invasion of privacy the CTA will be for small businesses. 

“We have known from the start that the only way to stop the CTA is for Congress to act. We fully support the goal of stemming money laundering – but we cannot allow the federal government to charge small businesses with the enforcement of it, which is exactly what the CTA will do,” stated McCracken. 

NSBA’s legal team is continuing to analyze the ruling, what it means for the CTA and what avenues NSBA may have for proceeding forward with its lawsuit against the CTA.  

“We maintain that, while the commerce clause might give Congress the power to regulate the commercial activities businesses engage in, the states and states alone are empowered to regulate the entities themselves. The CTA imposes reporting obligations merely because the entities are formed, not because they engage in commercial activity,” stated Thomas Lee, Special Counsel, Hughes Hubbard & Reed, LLP and part of the NSBA legal team. 

Furthermore, regulation of the maintenance and operation of a separate corporate entity has always been under the exclusive purview of the states—only when a separate corporate entity engages in some activity otherwise regulated by Congress does federal jurisdiction arise.  

“We respect the Court’s decision but respectfully disagree with it, and we are considering our options for seeking review by the Supreme Court,” stated Lee. 

As background, the CTA created a requirement for small businesses to report their ‘beneficial ownership information.’ This information requires extensive personal data to be turned over to the federal government including full legal names, dates of birth, residential addresses, and copies of drivers licenses or other state-issued IDs of the business’s beneficial owners. The U.S. Treasury Department's Financial Crimes Enforcement Network (FinCEN) is charged with overseeing this reporting, and they have had a history of cybersecurity issues and data leaks, putting every beneficial owner at risk for a costly data breach when complying. 

What constitutes a beneficial owner is wildly ambiguous based on FinCEN’s rulemaking. And as is the case with so many federal rules, it not only fails to provide clarity, it adds layers of complexity and ambiguity. In essence, a beneficial owner could end up being an advisor or a family member based on the broad rule implemented by FinCEN. We simply don’t know. 

“We have known from the start that the only way to stop the CTA is for Congress to act. We fully support the goal of stemming money laundering – but we cannot allow the federal government to charge small businesses with the enforcement of it, which is exactly what the CTA will do,” stated McCracken. 

Click here to send lawmakers an email urging them to support CTA repeal. 

Click here for NSBA’s CTA Resource page. 

Click here to view NSBA’s statement on the decision.