NY State Senate Bill 2023-S8112

Senate Bill S8112

2023-2024 Legislative Session

Requires certain joint tax returns pertaining to residential real estate cash purchases by limited liability companies to disclose the source of funds used for the purchase

download bill text pdf

Archive: Last Bill Status - In Senate Committee Budget And Revenue Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 08, 2024	referred to budget and revenue

2023-S8112 (ACTIVE) - Details

Current Committee:: Senate Budget And Revenue
Law Section:: Tax Law
Laws Affected:: Amd §1409, Tax L

2023-S8112 (ACTIVE) - Summary

Requires certain joint tax returns pertaining to residential real estate cash purchases by limited liability companies to be accompanied by a document which identifies the source or sources of funds used for the purchase, including the type of funding used, the bank account information of any funds used in the purchase and the amount used by each source of funds.

2023-S8112 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S8112

SPONSOR: SKOUFIS
 
TITLE OF BILL:

An act to amend the tax law, in relation to requiring certain joint tax
returns pertaining to residential real estate cash purchases by limited
liability companies to disclose the source of funds used for the
purchase

 
PURPOSE::

This bill will require LLCs that are purchasing certain residential real
estate in cash to disclose information about the source of funds used in
the purchase as part of tax returns to the Department of Taxation and
Finance.

 
SUMMARY OF PROVISIONS::

Section one of the bill amends section 1409 of the tax law, as amended
by section 3 of part 0 of chapter 59 of the laws of 2021, to require
that LLCs purchasing residential real estate, with up to four dwelling

units, including condos and coops, and the purchase is not secured by a
mortgage, to provide the source of funds including the type of funding
used for the purchase, the bank account information of any funds used in
the purchase and the amount used by each source of funds. In addition,
any source of funds that originates from a foreign national would
require identifying the name and address of such person and any corpo-
rate entities they own.

Section two of the bill relates to the effective date.

 
JUSTIFICATION::

This new disclosure builds upon a law I sponsored (Chapter 297 of 2019)
which requires LLCs purchasing residential real estate to disclose the
natural persons who own such LLCs in an effort to increase transparency
of these transactions. All cash transactions through LLCs are able to
not only shield their identity but evade anti money laundering laws and
regulations. These shadow transactions allow money to flow towards the
purchase of residential real estate through anonymous means. This bill
would pull back the curtain on these transactions and require informa-
tion on the source of funds used to be reported to the Department of
Taxation and Finance.

This legislation is modeled off similar federal requirements for LLC all
cash purchases that is currently operating as a pilot program by the
Financial Crimes Enforcement Network (FinCEN) in 12 US cities including
New York City. The pilot program known, as Geographic Targeting Orders
(GT0s), was recently renewed and applies to residential transactions,
over $300,000. This legislation will apply to all residential trans-
actions not secured by a mortgage, regardless of the purchase price,
throughout the State.  Given the recent scrutiny of Russian oligarch
purchases of real estate in New York and other US States, this gives the
State new tools to crack down on money laundering schemes.

 
LEGISLATIVE HISTORY::

Assembly
2021-2022- A8398, Referred to Health

 
FISCAL IMPLICATIONS::

None.

 
EFFECTIVE DATE::

This act shall take effect immediately and shall apply to returns filled
on and after January 1, 2023.

2023-S8112 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8112
 
                             I N  S E N A T E
 
                              January 8, 2024
                                ___________
 
 Introduced  by  Sen. SKOUFIS -- read twice and ordered printed, and when
   printed to be committed to the Committee on Budget and Revenue
 
 AN ACT to amend the tax law, in relation to requiring certain joint  tax
   returns pertaining to residential real estate cash purchases by limit-
   ed  liability  companies  to disclose the source of funds used for the
   purchase

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Paragraph 3 of subdivision (a) of section 1409 of the tax
 law, as amended by section 3 of part O of chapter  59  of  the  laws  of
 2021, is amended to read as follows:
   (3)  IN ADDITION TO THE REQUIREMENTS IN PARAGRAPH TWO OF THIS SUBDIVI-
 SION, WHEN THE GRANTOR OR GRANTEE OF A DEED FOR A BUILDING USED AS RESI-
 DENTIAL REAL PROPERTY CONTAINING  UP  TO  FOUR  FAMILY  DWELLING  UNITS,
 INCLUDING  CONDOMINIUMS AND COOPERATIVES, IS A LIMITED LIABILITY COMPANY
 AND THE PURCHASE IS NOT SECURED BY A MORTGAGE, THE  JOINT  RETURN  SHALL
 NOT  BE ACCEPTED FOR FILING UNLESS IT IS ACCOMPANIED BY A DOCUMENT WHICH
 IDENTIFIES THE SOURCE OR SOURCES OF FUNDS USED FOR THE PURCHASE, INCLUD-
 ING THE TYPE OF FUNDING USED, THE BANK ACCOUNT INFORMATION OF ANY  FUNDS
 USED  IN  THE  PURCHASE AND THE AMOUNT USED BY EACH SOURCE OF FUNDS.  IF
 ANY SOURCE OF FUNDS FOR SUCH PURCHASE ORIGINATED FROM A FOREIGN NATIONAL
 AS DEFINED IN SECTION 30121 OF TITLE 52 OF THE UNITED STATES  CODE,  THE
 DOCUMENT  SHALL  IDENTIFY SUCH FOREIGN NATIONAL INCLUDING THEIR NAME AND
 ADDRESS AND ANY CORPORATE ENTITY OWNED BY SUCH FOREIGN NATIONAL.
   (4) 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. This act shall take effect immediately and shall apply to returns
 filed on and after January 1, 2024.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets

                       [ ] is old law to be omitted.
                                                            LBD04703-01-3

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