Small Businesses Gain Temporary Relief from CTA Filing Mandates
In a victory for small and medium-sized Main Street businesses, a federal court this week issued a nationwide injunction suspending enforcement of disclosure requirements under the Corporate Transparency Act (CTA). The CTA, which took effect this year, requires businesses with less than $5 million in revenue and fewer than 20 employees to report personal information about their owners and managers to the Financial Crimes Enforcement Network (FinCEN) at the Treasury Department.
While the court action provides a reprieve for filing disclosures originally due at the end of the year, the issue is expected to continue working its way through the courts as the Treasury Department plans to challenge the decision.
For now, businesses in the lumber and building materials (LBM) sector are off the hook for this year’s reporting requirements. Noncompliance would have triggered civil penalties of up to $591 per day and potential jail time. However, a permanent resolution will depend on the next Congress and incoming administration.
ABMA Priorities in Focus for Upcoming Tax Legislation
Incoming Senate Majority Leader John Thune (R-S.D.) announced this week his goal of drafting a budget reconciliation package within 30 days of President-elect Trump taking office. Leadership staff indicated the GOP will pursue two reconciliation packages in 2025.
The first package will focus on energy, border security, and military readiness. Details of these policies remain unclear. The second package will address tax policy, specifically extending business tax benefits from the Tax Cuts and Jobs Act (TCJA).
Budget reconciliation is an appealing process for Republicans because it bypasses the Senate’s 60-vote filibuster threshold, requiring only a simple majority. With 53 Senate seats in the 119th Congress, these measures are likely to pass unless there are GOP defections.
Reconciliation has strict parameters but has historically been used when one party controls both chambers of Congress and the White House. ABMA’s priorities for the second reconciliation package include restoring full expensing tax benefits, reviving and extending the research and development tax credit, and extending the 20% tax deduction for S-corporations.
Although Sen. Thune is pushing for quick action, the process takes time. For example, the TCJA was enacted nearly two years after President Trump took office in 2016.
Workforce Development Gets a Boost with New Bipartisan Legislation
This week, Sens. Bill Cassidy (R-La.) and Maggie Hassan (D-N.H.) introduced workforce development legislation aimed at connecting individuals to jobs in their communities. The bill, titled the Improve and Enhance the Work Opportunity Tax Credit Act, updates the Work Opportunity Tax Credit (WOTC).
The WOTC provides a federal tax credit to employers hiring workers who face barriers to employment, including veterans, SNAP recipients, individuals with disabilities, and the long-term unemployed. Employers often incur higher recruitment and training costs when hiring from these populations.
WOTC, enacted 27 years ago, has not been updated, and its value has eroded due to inflation.
“It can be challenging for individuals to find jobs after being out of the workforce,” Cassidy said. “This bill helps employers help prospective employees struggling to find work, boosting the American economy and reducing reliance on government assistance.”
“Creating economic opportunity for all Americans is essential to our country’s success,” Hassan said. “Our bipartisan legislation will help connect more Americans with good-paying jobs while also lowering costs for businesses that invest in hiring veterans, people with disabilities, and others who may face barriers to employment. This tax cut is a commonsense, bipartisan way to support job growth and economic opportunity.”
Companion legislation has been introduced in the U.S. House by Reps. Lloyd Smucker (R-Pa.), Terri Sewell (D-Ala.), Brian Fitzpatrick (R-Pa.), Steven Horsford (D-Nev.), and Mike Kelly (R-Pa.).
