TITLE 63

REVENUE AND TAXATION

CHAPTER 30

INCOME TAX

63-3036B.  Pass-through entities — backup withholding. (1)  A pass-through entity, as defined in section 63-3006C, Idaho Code, that is transacting business in Idaho during a taxable year shall withhold tax as prescribed in this section.

(2)  For each nonresident individual who has income described in subsection (2) of section 63-3022L, Idaho Code, the pass-through entity shall withhold tax on the individual’s share of income from the pass-through entity required to be included in Idaho taxable income of the individual, at the rate applicable for the taxable year under section 63-3024, Idaho Code.

(3)  A pass-through entity is not required to withhold taxes under this section:

(a)  In regard to an individual who is a resident of Idaho as defined in section 63-3013, Idaho Code; or

(b)  If the pass-through entity is a publicly traded partnership, as defined in section 7704(b) of the Internal Revenue Code, that is treated as a partnership for purposes of the Internal Revenue Code and that has agreed to file an annual information return reporting the name, address, taxpayer identification number and other information requested by the state tax commission concerning each unitholder whose distributive share of partnership income from Idaho sources is more than five hundred dollars ($500); or

(c)  If withholding is not required pursuant to a rule adopted under this section; or

(d)  In regard to an individual who is not a resident of Idaho as defined in section 63-3013, Idaho Code, but for whom the pass-through entity has reported and paid the tax relating to said individual on a composite return pursuant to section 63-3022L, Idaho Code. An entity may rely upon information provided by the individual indicating state of residency as prescribed in the rules of the state tax commission.

(4)  A pass-through entity that is required to withhold tax under this section shall file a withholding return with the state tax commission setting forth the amount of income described in subsection (2) of section 63-3022L, Idaho Code, the amount of tax withheld under this section and any other information required by the state tax commission. The return shall be filed with the state tax commission on the form and taxes withheld under this section shall be paid to the state tax commission in the time and manner prescribed by rules of the state tax commission. To the extent the state tax commission finds practicable, the rules shall generally conform to the requirements of section 63-3035, Idaho Code.

(5)  A pass-through entity that is required to withhold tax under the provisions of this section shall furnish a statement to each individual on whose behalf tax is withheld. The statement shall state the amount of tax withheld on behalf of the individual for the taxable year of the pass-through entity. The statement shall be made on a form prescribed by the state tax commission and shall contain any other information required by it.

(6)  A pass-through entity is liable to this state for amounts of tax required to be withheld and paid under the provisions of this section. A pass-through entity is not liable to an officer, director, or individual owner of an interest in the pass-through entity for amounts required to be withheld under the provisions of this section that were paid to the state tax commission as prescribed in this section. Amounts required to be withheld and paid over to the state tax commission under this section that are not withheld or paid over at the time and in the manner required by the provisions of this section shall be a deficiency in tax as defined in section 63-3044, Idaho Code.

(7)  For purposes of this section, "individual" shall have the same meaning as in subsection (6) of section 63-3022L, Idaho Code.

History:

[63-3036B, added 2010, ch. 37, sec. 3, p. 68; am. 2011, ch. 3, sec. 3, p. 9; am. 2012, ch. 187, sec. 2, p. 492; am. 2014, ch. 36, sec. 2, p. 62; am. 2022, 1st E.S., ch. 1, sec. 11, p. 8.]