What's happening
This bill requires limited liability companies transferring residential property in New York to disclose all individuals behind the LLC.
Why it matters
Increases transparency in real estate transactions by requiring LLCs to reveal the identities and business addresses of all individuals with ownership or control (members, managers, authorized persons) when transferring residential property. This closes a current loophole that allows people to hide behind LLCs, making it easier to identify who is actually buying or selling homes.
Requires disclosure of ultimate ownership by natural persons, not just shell entities. If an LLC involved in the transaction is owned by another LLC or business entity, the law mandates full disclosure up the chain until the actual human owners are identified, preventing the use of complex entity structures to obscure true ownership.
Limits privacy objections by clarifying that this disclosure is not considered an unwarranted invasion of personal privacy under New York's public officers law. This means the information must be provided regardless of privacy concerns, making it accessible to regulators, law enforcement, and possibly the public.
Could help combat money laundering, tax evasion, and illegal purchases of residential property by increasing government and public visibility into property ownership. This may affect investors, speculators, and anyone using LLCs to anonymously acquire or transfer residential real estate, and could impact the dynamics of New York’s housing market.
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Who cares
Headline styles
Reveal LLC Property Owners
Plain English, a few words. Used as the page title.
Sponsors
History
- Referred to investigations and government operations
- Referred to investigations and government operations
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Reveal LLC Property Owners
Assembly Floor Calendar · Sponsor James Skoufis
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
1717
2017-2018 Regular Sessions
IN SENATE
January 10, 2017
Introduced by Sen. CARLUCCI -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Government Operations
AN ACT to amend the tax law and the administrative code of the city of New York, in relation to real property transfer tax returns of limited liability companies
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subdivision (a) of section 1409 of the tax law, as amended by chapter 309 of the laws of 1996, is amended to read as follows:
(a) A joint return shall be filed by both the grantor and the grantee for each conveyance whether or not a tax is due thereon other than a conveyance of an easement or license to a public utility as defined in subdivision two of section one hundred eighty-six-a of this chapter or to a public utility which is a provider of telecommunication services as defined in subdivision one of section one hundred eighty-six-e of this chapter, where the consideration is two dollars or less and is clearly stated as actual consideration in the instrument of conveyance. When the grantor or grantee of a deed for residential real property containing one- to four-family dwelling units is a limited liability company, the joint return shall not be accepted for filing unless it is accompanied by a document which identifies the names and business addresses of all members, managers, and any other authorized persons, if any, of such limited liability company and the names and business addresses or, if none, the business addresses of all shareholders, directors, officers, members, managers and partners of any limited liability company or other business entity that are to be the members, managers or authorized persons, if any, of such limited liability company. The identification of such names and addresses shall not be deemed an unwarranted invasion of personal privacy pursuant to article six of the public officers law. If any such member, manager or authorized person of the limited liabil-
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD02404-01-7
S. 1717 2
ity company is itself a limited liability company or other business entity, the names and addresses of the shareholders, directors, officers, members, managers and partners of the limited liability company or other business entity shall also be disclosed until full disclosure of ultimate ownership by natural persons is achieved. For purposes of this subdivision, the terms "members", "managers", "authorized person", "limited liability company" and "other business entity" shall have the same meaning as those terms are defined in section one hundred two of the limited liability company law. The return shall be filed with the recording officer before the instrument effecting the conveyance may be recorded. However, if the tax is paid to the commissioner pursuant to section fourteen hundred ten of this article, the return shall be filed with such commissioner at the time the tax is paid. In that instance, a receipt evidencing the filing of the return and the payment of tax shall be filed with the recording officer before the instrument effecting the conveyance may be recorded. The recording officer shall handle such receipt in the same manner as a return filed with the recording officer.
§ 2. Section 11-2105 of the administrative code of the city of New York is amended by adding a new subdivision h to read as follows:
h. When the grantor or grantee of a deed for residential real property containing one- to four-family dwelling units is a limited liability company, the joint return shall not be accepted for filing unless it is accompanied by a document which identifies the names and business addresses of all members, managers, and any other authorized persons, if any, of such limited liability company and the names and business addresses or, if none, the business addresses of all shareholders, directors, officers, members, managers and partners of any limited liability company or other business entity that are to be the members, managers or authorized persons, if any, of such limited liability company. The identification of such names and addresses shall not be deemed an unwarranted invasion of personal privacy pursuant to article six of the public officers law. If any such member, manager or authorized person of the limited liability company is itself a limited liability company or other business entity, the names and addresses of the shareholders, directors, officers, members, managers and partners of the limited liability company or other business entity shall also be disclosed until full disclosure of ultimate ownership by natural persons is achieved. For purposes of this subdivision, the terms "members", "managers", "authorized person", "limited liability company" and "other business entity" shall have the same meaning as those terms are defined in section one hundred two of the limited liability company law.
§ 3. This act shall take effect immediately.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the tax law and the administrative code of the city of New York, in relation to real property transfer tax returns of limited liability companies
Purpose or general idea of bill
This bill requires limited liability companies to disclose the individual members of the company when it files a joint tax return for any sale of real residential property that it is named the grantor or grantee in. This only applies to residential property containing one- to four-family dwelling units and requires that the joint tax return be accompanied with a list identifying all the members, managers, and any other authorized persons of the company. This practice has been successfully implemented in New York City as of 2015. This bill seeks to codify the practice in New York City and apply it on a statewide level.
Summary of specific provisions
Section 1 of the bill adds a new subdivision (h) of Section 11-2105 of the administrative code of the city of New York to require any limited liability company who is the grantor or grantee of a deed for residential real property containing one- to four-family dwelling units to accompany the filing of any joint tax return a list identifying all the members, managers, and any other authorized persons.
Section 2 of the bill incorporates the same provisions into section 1409 of the tax law into paragraph (a) for statewide application.
Section 3 of the bill establishes that this act will take effect immediately.
Justification
The issue of transparency that this bill addresses is important because when real estate transactions take place involving an LLC, those behind the companies are often unable to be identified. This bill seeks to address the anonymity and related concerns by requiring limited liability companies that engage in residential property sales to disclose their members when filing a joint property tax return. This practice has been successfully implemented in New York City as of 2015. This bill seeks to codify the practice in the city and apply it on a statewide level.
Prior legislative history
2015-16: S7795A/A10430 - Rules/passed assembly
Fiscal implications
None
Effective date
The bill takes effect immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.