New York Plows on with its own BOI Reporting Requirement

Despite the apparent suspension of the U.S. Corporate Transparency Act’s requirement to report information on companies’ beneficial owners, New York’s own BOI requirement is still set to kick in next year.

The New York LLC Transparency Act (NYTA) signed by New York Gov. Kathy Hochul on March 1 and that kicks in Jan. 1, could remove obstacles from finding out the true owners of newly created LLCs. New York will become the only state to have such a requirement.

The U.S. Corporate Transparency Act (CTA) was passed in 2020 as part of the Anti-Money Laundering Act of 2020, establishing uniform beneficial ownership information (BOI) reporting requirements for certain types of corporations, LLCs and other similar entities created in or registered to conduct business in the United States. A company was to have reported BOI to the Financial Crimes Enforcement Network. In March, though, the U.S. Treasury essentially suspended the CTA/BOI reporting requirement for U.S. persons.

New York’s law is still modeled largely on that federal one, including that a beneficial owner, among other conditions, generally exercises substantial control over the reporting company or owns or controls 25% or more of the ownership interests of the reporting company. New York also generally follows the CTA/BOI categories of exempt companies, including types of entities already subject to disclosure or regulation such as publicly traded companies, investment companies, banks, insurance companies, tax-exempt entities and government entities.

Some differences

“Anonymous corporate ownership has proliferated since the 1990s and has

contributed to numerous problems,” reads the text of New York’s bill.

“Anonymous shell companies are used to bypass sanctions, avoid taxes, fund terrorist organizations and organized crime and launder money. Anonymous LLCs leasing real property are correlated with more numerous code violations, higher rents and more evictions compared to non-corporate owners. Drug and human traffickers use anonymous shell companies like LLCs to launder the proceeds of their criminal activities and evade detection. Deed theft, campaign finance violations, and bid rigging can be facilitated by anonymous LLCs … The anonymous ownership of a significant portion of real estate in New York hampers policymaking and upends centuries of precedent” regarding ownership.

Reporting companies formed – or merely authorized to do business in – New York on or after Jan. 1, 2026, have 30 days after formation or qualification to file their beneficial ownership information report or establish their exemption with the secretary of state. By Jan. 1, 2027, reporting companies formed or qualified prior to Jan. 1, 2026, must file or establish an exemption.

Filing requires identification to the New York secretary of state of the names of the company’s individual beneficial owners and certain company applicants who participated in the filings with the secretary of state. Owners must provide their full name, date of birth and current home or business address. They must also a unique ID from a passport, driver’s license or other ID card.

New York’s law differs in part from the federal CTA/LLC:

LLCs claiming exemption under the NYTA must electronically file, under penalty of perjury, an attestation of exemption, which includes the specific exemption claimed and the facts on which it’s based.

The NYTA’s reporting requirement is annual (the CTA/BOI’s was one-time) and LLCs formed or authorized to do business in New York prior to Jan. 1, 2026, have until December 31, 2026, to comply. LLCs formed or authorized to do business in New York on or after January 1, 2026, must file their BOI within 30 days of submitting their articles of organization to form a domestic LLC in New York or within 30 days of filing their application for authority to do business in New York. Non-compliance is punishable by fines of up to $500/day, suspension of the company’s ability to do business in the state.

BOI collected by New York will be in a secure database, accessible only if necessary to law enforcement and other official authorities.

Competitiveness question

Despite the obvious need to use all tools to combat money laundering, critics of NYTA maintain that it will hamper the state’s competitiveness and disproportionately burden small businesses. Despite an early rush of interest by other states in the early days of the federal CTA/BOI, New York standing alone with a reporting requirement.

Others question if the state is ready for this huge administrative task that begins in just six months.

Your tax specialist needs to stay on top of this and many other issues of wealth, foreign income and tax enforcement. If we can help, please let us know.

Please note: This content is intended for informational purposes only and is not a replacement for professional accounting or tax preparatory services. Consult your own accounting, tax, and legal professionals for advice related to your individual situation. Any copy or reproduction of our presentation is expressly prohibited. Any names or situations have been made up for illustrative purposes — any similarities found in real life are purely coincidental.

About the author:

Alicea Castellanos, CEO of Global Taxes LLC

Alicea Castellanos is the CEO and Founder of Global Taxes LLC. Alicea provides personalized U.S. tax advisory and compliance services to high-net-worth families and their advisors. Alicea has more than 20 years of experience. Prior to forming Global Taxes, Alicea founded and oversaw operations at a boutique tax firm, worked at a prestigious global law firm and CPA firm. Alicea specializes in U.S. tax planning and compliance for non-U.S. families with global wealth and asset protection structures which include non-U.S. trusts, estates, and foundations that have a U.S. connection.

Alicea also specializes in foreign investment in U.S. real estate property and other U.S. assets, pre-immigration tax planning, U.S. expatriation matters, U.S. persons in receipt of foreign gifts and inheritances, foreign accounts and assets compliance, offshore voluntary disclosures/tax amnesties, and foreign companies wanting to do business in the U.S. Alicea is fluent in Spanish and has a working knowledge of Portuguese.

Alicea is an active member of the Society of Trusts & Estates Practitioners (STEP), the New York State Society of Certified Public Accountants (NYSSCPA), the American Institute of Certified Public Accountants (AICPA), the International Fiscal Association (IFA), a member of Clarkson Hyde Global, a world-wide association of accountants, auditors, tax specialists and business advisors and the Global Referral Network (GRN).

Distinctly, in 2020, Alicea was awarded with a prestigious NYSSCPA Forty Under 40 Award. She was selected as someone that has notable skills and is visibly making a difference in the accounting profession. Alicea has also been recognized as a leading expert for tax advice and she has been invited to join Advisory Excellence, as their exclusively recommended tax expert in the USA.

In 2021 and 2022, Alicea won Gold and Silver in Citywealth's Powerwomen Awards for USA - Woman of the Year - Business Growth (Boutique). In 2023, she received Gold for Company of the Year - Female Leadership (Boutique) and was listed in the Global Elite Directory, an exclusive directory of top wealth advisors.

In 2024, Alicea was named to Citywealth's Top 50 Tax Professionals, shortlisted for the Magic Circle Awards, peer-nominated as a Non-Legal Adviser, and appointed as a judge for the Citywealth Powerwomen Awards USA. She is also certified as an International Business Advisory Firm by AuditTrust International and a proud STEP member for 2024/2025.