08 LC 18
6978
House
Bill 1155
By:
Representatives Knight of the
126th,
Tumlin of the
38th,
and Mosby of the
90th
A
BILL TO BE ENTITLED
AN ACT
AN ACT
To
amend Article 5 of Chapter 7 of Title 48 of the Official Code of Georgia
Annotated, relating to current income tax payment, so as to revise and change
certain provisions regarding withholding tax on distributions to nonresident
members of partnerships, Subchapter "S" corporations, and limited liability
companies; to repeal conflicting laws; and for other purposes.
BE
IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION
1.
Article
5 of Chapter 7 of Title 48 of the Official Code of Georgia Annotated, relating
to current income tax payment, is amended by revising Code Section 48-7-129,
relating to withholding tax on distributions to nonresident members of
partnerships, Subchapter "S" corporations, and limited liability companies, as
follows:
"48-7-129.
(a)(1)
Any partnership, Subchapter 'S' corporation, or limited liability company which
owns property or does business within this state shall be subject to a
withholding tax. Such tax shall be withheld from any distributions paid or
any
distributions credited to members who are
not residents of Georgia, except as provided in subsection (c) of Code Section
48-7-24.
(2)
The amount of tax to be withheld for each nonresident member shall be determined
by multiplying the distribution paid or
the
distribution credited by a rate of 4
percent. To the extent that the partnership, Subchapter 'S' corporation, or
limited liability company remits withholding tax during the course of the tax
year which exceeds the Georgia income tax liability of a nonresident member,
that member shall be entitled to a refund of the excess withholding at the end
of the taxable year.
(3)
Any partnership, Subchapter 'S' corporation, or limited liability company which
fails to withhold and pay over to the commissioner any amount required to be
withheld under this Code section may be liable for a penalty equal to
25 percent
of the amount not withheld and paid over.
Any penalty imposed under this subsection shall be paid upon notice and demand
by the commissioner or the commissioner´s delegate and shall be assessed
and collected in the same manner as the withholding taxes imposed by this
article.
(4)
The partnership, Subchapter 'S' corporation, or limited liability company and
its members shall be jointly and severally liable for the withholding tax
liability imposed under this subsection and shall be assessed
accordingly.
(b)(1)
As an alternative to the withholding requirement imposed by subsection (a) of
this Code section, the commissioner may allow the filing of composite returns by
partnerships, Subchapter 'S' corporations, or limited liability companies on
behalf of their nonresident members and may provide for the requirements of
filing composite returns by regulation. For purposes of this subsection, the
term 'composite return'
shall
mean
means
a return filed by a partnership, Subchapter 'S' corporation, or limited
liability company on behalf of all of its nonresident members which reports and
remits the Georgia income tax of the nonresident members.
(2)
Where a partnership, Subchapter 'S' corporation, or limited liability company
chooses to file a composite return and meets all the requirements of filing
the
such
composite return, such partnership, Subchapter 'S' corporation, or limited
liability company shall be exempt from the withholding requirements imposed
under subsection (a) of this Code section.
(3)
The liability imposed by this subsection shall be paid upon notice and demand by
the commissioner or the commissioner´s delegate and shall be assessed and
collected in the same manner as all other withholding taxes imposed by this
article.
(c)(1)
If a partnership, Subchapter 'S' corporation, or limited liability company fails
to remit withholding for a nonresident member and the commissioner determines
that such failure is due to a false representation that the member is a resident
of Georgia, there shall be imposed in addition to the tax a penalty of the
greater of $250.00 or 5 percent of the amount which should have been withheld.
The partnership, Subchapter 'S' corporation, or limited liability company and
the nonresident member shall be jointly and severally liable for any such
penalty imposed.
(2)
The penalty imposed by this subsection shall be paid upon notice and demand by
the commissioner or the commissioner´s delegate and shall be assessed and
collected in the same manner as withholding tax imposed by this
article.
(d)(1)
Every partnership, Subchapter 'S' corporation, or limited liability company
which is required to deduct and withhold the withholding tax imposed by
subsection (a) of this Code section shall
remit such tax
and file the required return on a form
approved by the commissioner
and remit
payment to the department
as
follows:
(A)
Taxes deducted and withheld on distributions paid by a partnership, Subchapter
'S' corporation, or limited liability company to members who are nonresidents
shall be due on or before the last day of
the calendar month following the calendar month within which the distribution
was paid or
credited;
and
(B)
Taxes deducted and withheld on distributions credited but not paid by a
partnership, Subchapter 'S' corporation, or limited liability company to members
who are nonresidents shall be due on or before the due date for filing the
income tax return for the partnership, Subchapter 'S' corporation, or limited
liability company as prescribed in subsection (a) of Code Section 48-7-56
without regard to any extension of time for filing such income tax
return.
(2)
Every partnership, Subchapter 'S' corporation, or limited liability company
required to deduct and withhold tax under this article shall
furnish,
within 30 days of the close of its taxable year, to each nonresident member for
which tax is withheld a written statement in duplicate, showing the name of the
partnership, Subchapter 'S' corporation, or limited liability company, the name
of the member of the partnership, Subchapter 'S' corporation, or limited
liability company, the member´s federal tax identification number, the
total amount of distributions paid to the member during the taxable year, and
the total amount of tax deducted and withheld with respect to the member during
the taxable year. The written statement shall be in a form approved by the
commissioner and shall contain such additional information as the commissioner
may prescribe. The partnership, Subchapter 'S' corporation, or limited liability
company shall file copies of all such written statements with the
commissioner
a written
statement or form approved by the commissioner to each nonresident member. Such
statement or form shall include the name and federal tax identification number
of the partnership, Subchapter 'S' corporation, or limited liability company,
the member´s federal tax identification number, the total amount of
distributions paid to the member during the taxable year, the total amount of
tax deducted and withheld with respect to such member during the year, and such
other information as the commissioner shall prescribe. Such statement or form
shall be furnished to the nonresident member and filed in duplicate with the
commissioner on or before the due date for filing the income tax return of such
partnership, Subchapter 'S' corporation, or limited liability company as
prescribed in subsection (a) of Code Section 48-7-56 without regard to any
extension of time for filing such income tax
return.
(3)
Any partnership, Subchapter 'S' corporation, or limited liability company
required to furnish a nonresident member with the written statement required by
this subsection which furnishes a false or fraudulent statement or which fails
to furnish the statement shall be subject to the penalty contained in subsection
(d) of Code Section 48-7-126. The penalty imposed by this subsection shall be
paid upon notice and demand by the commissioner or the commissioner´s
delegate and shall be assessed and collected in the same manner as the
withholding tax imposed by this article.
(e)(1)
Notwithstanding subsection (a) of this Code section, a partnership, Subchapter
'S' corporation, or limited liability company shall not be required to deduct
and withhold tax for a nonresident member if:
(A)
A composite return is filed on behalf of nonresident members pursuant to the
requirements of filing such composite returns as set by the
commissioner;
(B)
The aggregate annual distributions made to a member are less than
$1,000.00;
(C)
A federally chartered Subchapter 'S' corporation fails to meet the requirements
of subparagraph (b)(7)(B) of Code Section 48-7-21 and is therefore required to
remit corporate income tax;
(D)
Compliance will cause undue hardship on the partnership, Subchapter 'S'
corporation, or limited liability company, provided that no partnership,
Subchapter 'S' corporation, or limited liability company shall be exempt from
complying with the withholding requirements imposed under subsection (a) of this
Code section unless the commissioner approves in writing a written petition for
exemption from the withholding requirements based on undue hardship. The
commissioner may prescribe the form and contents of such a petition and specify
standards for when a partnership, Subchapter 'S' corporation, or limited
liability company
will
shall
not be required to comply with the withholding requirements due to undue
hardship;
(E)
The partnership is a publicly traded partnership as defined in Section 7704 of
the Internal Revenue Code of 1986; or
(F)
The member meets one of the exceptions as set forth in the rules and regulations
promulgated by the commissioner.
(2)
Where distributions paid or
distributions
credited to nonresident members of partnerships, Subchapter 'S' corporations, or
limited liability companies are subject to withholding under other provisions of
Georgia law or represent a return of such member´s investment or a return
of capital, such distributions shall not be subject to withholding under
subsection (a) of this Code section.
(f)
The commissioner
is
shall
be authorized to prescribe forms and to
promulgate rules and regulations which the commissioner deems necessary in order
to effectuate this Code section."
SECTION
2.
All
laws and parts of laws in conflict with this Act are repealed.