Wyoming small business owners are facing a looming deadline to comply with a new federal requirement that mandates disclosure of company ownership, Cowboy State Daily reports.
Under the 2021 Corporate Transparency Act (CTA), businesses must file a report detailing their beneficial owners by January 13, 2025. Failure to submit the required form by this date could result in fines up to $10,000 or even jail time, sparking concerns among local business owners.
The CTA was designed to combat financial crimes like money laundering and fraud by requiring small businesses to disclose ownership information to the US Department of the Treasury. The law applies to for-profit, privately held companies with fewer than 20 employees or under $5 million in annual revenue. The CTA mandates that businesses provide details on individuals who hold significant control over the company, including shareholders owning at least 25% of the company or those with substantial operational influence.
Though the deadline was originally set for January 1, 2025, the Treasury Department granted a short extension to January 13 following a ruling by the Fifth Circuit Appeals Court in Louisiana, which reversed a previous injunction blocking the law. This ruling prompted concerns from Wyoming Secretary of State Chuck Gray, who has called for legal action against the law, arguing that it is overly burdensome for small businesses and unconstitutional. Gray has requested that Wyoming’s Attorney General, Bridget Hill, pursue an injunction to prevent the CTA’s enforcement within the state.
In his letter to Hill, Gray emphasized the negative impact on Wyoming businesses, including ranchers, who face substantial fines for non-compliance. He criticized the federal government’s approach to tackling financial crimes, suggesting that it unfairly targets businesses that have done nothing wrong. He also raised concerns about the timing of the deadline, which falls just ahead of the presidential inauguration and a new Congress, potentially limiting efforts to repeal the law.
While the CTA aims to increase transparency and reduce corporate secrecy, some critics argue that it unfairly burdens small businesses and violates constitutional principles related to privacy. The law has been met with opposition in states like Wyoming, where privacy laws are often seen as an attraction for businesses seeking more control over their information.
Wyoming’s business community has been under scrutiny in recent years for its role as a “secrecy haven,” with some alleging that the state’s privacy laws allow questionable business practices to remain hidden. However, Gray has defended Wyoming’s approach to financial transparency, noting that the state has actively worked to combat fraud using existing laws and that new measures are being considered to strengthen oversight.
As the January 13 deadline approaches, Wyoming business owners are urged to review their compliance with the CTA.
