Federal statute affecting Arizona small businesses put on halt amid lawsuit [Video]

PHOENIX (AZFamily) — Nearly 32 million small businesses nationwide and here in Arizona will no longer have to report their ownership information to the federal government.

A judge for the U.S. District Court for the Eastern District of Texas issued a preliminary injunction, citing that the Corporate Transparency Act (CTA) was likely unconstitutional in a Texas firearms retailer case.

“They basically said Congress doesn’t have the authority to pass a law like this,” said Patrick MacQueen, an attorney in Arizona.

The CTA was enacted through the The National Defense Authorization Act (NDAA) in 2021 but went into effect this year.

The new law required businesses to file a beneficial ownership information report with the Financial Crimes Enforcement Network to disclose who owns the company.

“The beneficial owner is anybody who owes 25 or more of that reporting company or someone who substantially controls the company,” MacQueen said.

The bill was created to address the disclosure …