12 HB
965/AP
House
Bill 965 (AS PASSED HOUSE AND SENATE)
By:
Representatives Knight of the
126th,
Peake of the
137th,
and Carson of the
43rd
A
BILL TO BE ENTITLED
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 allow certain
fiduciaries an exception to the requirement of paying estimated taxes; to change
certain provisions relating to withholding tax on taxable income of nonresident
members of certain associations; to provide for related matters; to provide for
an effective date and applicability; 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 48-7-114,
relating to payment of estimated income tax, as follows:
"48-7-114.
(a)
'Estimated tax'
defined. For purposes of this Code
section, the term 'estimated tax' means the amount which the individual
estimates as the amount of income tax imposed by Code Section 48-7-20 less the
amount which the individual estimates as the sum of credits allowable by law
against the tax.
(b)
Requirement of
estimated tax. Except as otherwise
provided in subsection (d) of this Code section, every resident individual and
every taxable nonresident individual shall file his
or
her estimated tax for the current taxable
year if he or
she can be reasonably expected to be
required to file a Georgia income tax return for the current taxable year and
his or
her gross income can reasonably be
expected to:
(1)
Include more than $1,000.00 from sources other than wages as defined in
paragraph (10) of Code Section 48-7-100; and
(2)
Exceed:
(A)
One thousand five hundred dollars if the individual is single or the individual
is married and not living with his
or
her spouse or the individual is married
and expects to claim only $1,500.00 of the marital exemption; or
(B)
Three thousand dollars if the individual is married and living with his
or
her spouse and expects to claim the full
marital exemption.
(c)
Return as estimated
tax. If on or before January 31 of the
succeeding taxable year or, in the case of an individual referred to in
subsection (b) of Code Section 48-7-115, relating to income from farming and
fishing, on or before March 1 of the succeeding taxable year, the taxpayer files
a return for the taxable year for which the estimated tax is required and pays
in full the amount computed on the return as payable and the estimate is not
required to be filed during the taxable year but is required to be filed on or
before January 15, then the return shall be considered as the
estimate.
(d)
Exemptions.
This Code section shall not apply to an individual in a given tax year
if:
(1)
The sum of the allowable credits shown on the individual's income tax return for
the tax year exceeds the individual's tax liability shown on the return before
the tax liability is reduced by the amount of the allowable credits;
and
(2)
The individual reasonably expected at the time estimated tax was otherwise
required to be filed with respect to the tax year that the conditions of
paragraph (1) of this subsection would be met for the tax year.
(e)(1)
Applicability to
fiduciaries. With respect to taxable
years beginning on or after January 1, 1988, fiduciaries shall be subject to all
requirements of this article in the same manner as
individuals,
except as provided in paragraph (2) of this subsection.
(2)
This Code section shall not apply with respect to any taxable year ending before
the date two years after the date of the decedent's death in the case
of:
(A)
The estate of such decedent; or
(B)
A testamentary trust as defined in IRC Section
6654(l)(2)(B)."
SECTION
2.
Said
article is further amended by revising Code Section 48-7-129, relating to
withholding tax on distributions to nonresidents, 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 but not paid to members who are
not residents of Georgia
a nonresident
member's share of taxable income sourced to this state, whether distributed or
not, except as provided in subsection (c)
of Code Section 48-7-24.
For purposes
of this Code section, the term 'taxable income sourced to this state' means the
entity's income allocated or apportioned to Georgia pursuant to Code Section
48-7-31 or as otherwise provided by law.
(2)
The amount of tax to be withheld for each nonresident member shall be determined
by multiplying the
distribution
paid or the distribution credited but not
paid
nonresident
member's share of the taxable income sourced to this
state 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' 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 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
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; 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
a nonresident
member's share of the taxable income sourced to this
state 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 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 name and federal tax identification number, the total amount of
distributions
paid to the member
the
nonresident member's share of the taxable income sourced to this
state 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 earlier of the date the income tax return is
filed or 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
amount of a
nonresident member's share of the taxable income sourced to this state
is 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 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 but not paid, or both, to nonresident members of
partnerships, Subchapter 'S' corporations, or limited liability companies
are
a nonresident
member's share of the taxable income sourced to this state
is 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
amount
shall not be subject to withholding under subsection (a) of this Code
section.
(f)
The commissioner 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
3.
This
Act shall become effective upon its approval by the Governor or upon its
becoming law without such approval, and Section 2 of this Act shall be
applicable to all taxable years beginning on or after January 1,
2012.
SECTION
4.
All
laws and parts of laws in conflict with this Act are repealed.