Nonresident partners; withholding rate; returns; credits for tax
withheld
Sec. 12. (a) Every partnership shall, at the time that the
partnership pays or credits amounts to any of its nonresident partners
on account of their distributive shares of partnership income, for a
taxable year of the partnership, deduct and retain therefrom the
amount prescribed in the withholding instructions referred to in
section 8 of this chapter. Such partnership so paying or crediting any
nonresident partner:
(1) shall be liable to the state of Indiana for the payment of the
tax required to be deducted and retained under this section and
shall not be liable to such partner for the amount deducted from
such payment or credit and paid over in compliance or intended
compliance with this section; and
(2) shall make return of and payment to the department monthly
whenever the amount of tax due under IC 6-3 and IC 6-3.5
exceeds an aggregate amount of fifty dollars ($50) per month
with such payment due on the thirtieth day of the following
month, unless an earlier date is specified by section 8.1 of this
chapter.
Where the aggregate amount due under IC 6-3 and IC 6-3.5 does not
exceed fifty dollars ($50) per month, then such partnership shall
make return and payment to the department quarterly, on such dates
and in such manner as the department shall prescribe, of the amount
of tax which, under IC 6-3 and IC 6-3.5, it is required to withhold.
(b) Every partnership shall, at the time of each payment made by
it to the department pursuant to this section, deliver to the department
a return upon such form as shall be prescribed by the department
showing the total amounts paid or credited to its nonresident
partners, the amount deducted therefrom in accordance with the
provisions of this section, and such other information as the
department may require. Every partnership making the deduction and
retention provided in this section shall furnish to its nonresident
partners annually, but not later than thirty (30) days after the end of
its taxable year, a record of the amount of tax deducted and retained
from such partners on forms to be prescribed by the department.
(c) All money deducted and retained by the partnership, as
provided in this section, shall immediately upon such deduction be
the money of the state of Indiana and every partnership which
deducts and retains any amount of money under the provisions of
IC 6-3 shall hold the same in trust for the state of Indiana and for
payment thereof to the department in the manner and at the times
provided in IC 6-3. Any partnership may be required to post a surety
bond in such sum as the department shall determine to be appropriate
to protect the state of Indiana with respect to money deducted and
retained pursuant to this section.
(d) The provisions of IC 6-8.1 relating to additions to tax in case
of delinquency and penalties shall apply to partnerships subject to
the provisions of this section, and for these purposes any amount
deducted, or required to be deducted and remitted to the department
under this section, shall be considered to be the tax of the
partnership, and with respect to such amount it shall be considered
the taxpayer.
(e) Amounts deducted from payments or credits to a nonresident
partner during any taxable year of the partnership in accordance with
the provisions of this section shall be considered to be in part
payment of the tax imposed on such nonresident partner for his
taxable year within or with which the partnership's taxable year ends.
A return made by the partnership under subsection (b) shall be
accepted by the department as evidence in favor of the nonresident
partner of the amount so deducted for his distributive share.
(f) This section shall in no way relieve any nonresident partner
from his obligations of filing a return or returns at the time required
under IC 6-3 or IC 6-3.5, and any unpaid tax shall be paid at the time
prescribed by section 5 of this chapter.
(g) Instead of the reporting periods required under subsection (a),
the department may permit a partnership to file one (1) return and
payment each year if the partnership pays or credits amounts to its
nonresident partners only one (1) time each year. The return and
payment are due not more than thirty (30) days after the end of the
year.
(Formerly: Acts 1963(ss), c.32, s.412; Acts 1965, c.233, s.22; Acts
1969, c.326, s.7; Acts 1971, P.L.65, SEC.2; Acts 1973, P.L.50,
SEC.4.) As amended by Acts 1979, P.L.68, SEC.4; Acts 1982, P.L.49,
SEC.4; P.L.2-1982(ss), SEC.10; P.L.23-1986, SEC.3.
Last modified: May 28, 2006