On December 3, 2024, the U.S. District Court for the Eastern District of Texas granted a nationwide preliminary injunction that stops the federal government from enforcing the Corporate Transparency Act (CTA).This act went into effect on January 1st of this year and requires small businesses to disclose information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN).
Since small businesses were supposedly being used to finance terror operations, they thought it was a good idea to see who actually owned our businesses.
A group of six plaintiffs filed a lawsuit in May 2024 claiming that Congress exceeded its authority under the Constitution in passing the CTA. In a 79-page order issued by United States District Judge Amos L. Mazzant, the Court found that the plaintiffs were likely to succeed on the merits of their claims and the Court issued a nationwide injunction instead.
That’s right. After telling everyone that they had to do this two days ago, I’m now telling you that you don’t.
If you’re like me and you already completed this registration, there’s no way that it can harm you. At the end of the day, how hard is it to figure out who actually benefits from a business? How hard is it to ask the IRS to pull a tax return?
This whole thing was a fool’s errand to begin with.
Please also realize that this could change again next week. There are several lawsuits still making their way through the court system. A different federal judge could restart the whole program again.
Further information can be found at the following link.
https://natlawreview.com/article/breaking-federal-court-enjoins-government-enforcing-corporate-transparency-act
Let me leave you with this…
Our friends at the Illinois Department of Revenue (IDOR) sent out a missive changing one of the older rules in sales tax accounting. In order to explain what’s changed, let’s go through an example.
Joanne B. Owner buys a desk from a retailer in Wisconsin for use in her business here in Illinois. The Wisconsin retailer delivers the desk to her offices in Illinois.
The Wisconsin retailer can’t collect Wisconsin sales tax on the item because the delivery was made to Illinois. But sales tax needs to be paid on the item, so how is this handled?
Illinois has something called Use Tax which covers this situation. That’s why the St-1 is named a Sales and Use Tax Return because it collects both taxes. In this instance, Joanne is required to report the purchase.
Prior to this rule change, Joanne would have paid a 6.2% Use Tax on the purchase. The rule change does nothing but change the rate of Use Tax from 6.2% to whatever the regular Sales Tax Rate is based on her company’s jurisdiction.
If she normally pays a 10.25% Sales Tax Rate, then her Use Tax Rate was just raised to 10.25%. Welcome to Illinois. Have a nice day.
This in no way changes how regular sales taxes are collected and remitted. Further information can be found at the following link.
https://tax.illinois.gov/research/publications/bulletins/fy-2025-10.html
We’re all going to get through this. Let’s get through it together.
Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. Whether you need Payroll Services, or Accounting and Tax Work, you have but to ask. I’m here and I remain,
Sincerely yours,
Chris Amundson
President
Accounting Solutions Ltd.
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