DEC 18, 2024

Attorney General Alan Wilson co-leads effort to protect small businesses

(COLUMBIA, S.C.) – South Carolina Attorney General Alan Wilson co-led a 25-state brief filed today in federal court to protect small businesses and uphold states’ authority to regulate the formation of corporations. The brief asks the 5th Circuit Court of Appeals to uphold a ruling by a lower court that the Corporate Transparency Act is unconstitutional.

“Right before Christmas, the federal government is acting like Ebenezer Scrooge by trying to squeeze billions of dollars out of small businesses,” Attorney General Wilson said. “It’s another example of the Biden-Harris administration trying to do something they don’t have the power to do and would hurt the economy.”

The Corporate Transparency Act, or CTA, would require businesses with 20 or fewer employees to report personal identifying information about their “beneficial owners” to the U.S. Department of the Treasury’s criminal enforcement bureau. A “beneficial owner” is someone who either exercises substantial control over the business or owns or controls 25 percent or more of the ownership interest in it.

It's estimated that in just the first two years of the CTA, small businesses nationwide would spend over 150 million hours and nearly $30 billion to comply.

Last March, a federal court ruled that the CTA is unconstitutional. The Biden-Harris administration has appealed that ruling. South Carolina, West Virginia, and Kansas are co-leading a brief by 25 states asking the Court of Appeals to agree that the act is unconstitutional and strike it down permanently.

In addition to the burden the CTA would place on small businesses, it would also violate states’ authority to regulate corporate formation.

In addition to Attorney General Wilson, West Virginia, and Kansas, the following states joined the brief: Alabama, Arkansas, Florida, Georgia, Idaho, Indiana, Iowa, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, North Dakota, Ohio, Oklahoma, South Dakota, Tennessee, Texas, Utah, Virginia, and Wyoming.

You can read the brief here.

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