Amendment to NYS Tax Law Affects Recording of Deeds for LLCs
The Westchester County Clerk’s Property Records Electronic Portal (PREP) System has been updated to accommodate recent changes to the NYS Tax Law, affecting conveyances where a multi-member limited liability company is a grantor or grantee. When a multi-member LLC is a party to a conveyance, the members of the multi-member LLC must now be entered into the PREP System, and the Multi-Member LLC Addendum will automatically be generated and appended to the TP-584 form, when necessary.
Section 1409(a) of the New York Tax Law has been amended, effective September 13, 2019, in relation to real property transfer tax returns of limited liability companies (LLC).
The amended legislation “requires the real property transfer tax return relating to residential property sold or purchased by a limited liability company to include information on the ownership of such company.” S1730 Sponsor Memo
The amendment only applies to the conveyance of residential real property containing one- to four-family dwelling units when the grantor or grantee is an LLC. The implementation of the amendment has required changes to the TP-584 by the New York State Department of Taxation and Finance (DOTF). The revised TP-584 is now available in PREP and the required Multi-Member LLC Addendum will automatically be generated by following the procedure below:
If you are recording a deed:
- of a residential real property containing a one- to four- family dwelling unit, and
- a grantor or a grantee is an LLC
- If a grantor or grantee of a Single Member LLC is a natural person, the TP-584 may be completed as in the past, by adding the LLC Member using the link provided on the Party Tab.
- If the grantor or grantee is an LLC with multiple members, or the sole member of the grantor or grantee LLC is not a single natural person, then all members, managers, or any other authorized persons must be listed, by using the “Multi-Member Party” link provided on the Taxes Tab.
2a. If a member of the LLC is another LLC or other business entity, all shareholders, directors, officers, members, managers, partners and authorized persons of said LLC or business entity must be listed by name and business address until “full disclosure of ultimate ownership by natural persons is achieved.”
Additional information and guidance can be found in the New York State Department of Taxation and Finance's Technical Memorandum, TSB-M-19(2)R.