Maine Revised Statutes Title 36 Sec. 5250-B – Withholding on pass-through entity income of nonresident partners and shareholders
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1. Definitions. As used in this section, unless the context otherwise indicates, the following terms have the following meanings.
A. “Member” means an individual or other owner of a pass-through entity. [PL 2003, c. 20, Pt. AA, §1 (NEW); PL 2003, c. 20, Pt. AA, §6 (AFF).]
B. “Nonresident” means a nonresident individual, a business entity that does not have its commercial domicile in the State, or a nonresident estate or trust. [PL 2003, c. 20, Pt. AA, §1 (NEW); PL 2003, c. 20, Pt. AA, §6 (AFF).]
C. “Pass-through entity” means a corporation that for the applicable tax year is treated as an S corporation under the Code and a general partnership, limited partnership, limited liability partnership, limited liability company or similar entity that for the applicable tax year is not taxed as a C corporation for federal tax purposes. For purposes of this section, “pass-through entity” does not include a financial institution subject to tax under chapter 819. [PL 2005, c. 332, §24 (AMD); PL 2005, c. 332, §30 (AFF).]
[PL 2005, c. 332, §24 (AMD); PL 2005, c. 332, §30 (AFF).]
Terms Used In Maine Revised Statutes Title 36 Sec. 5250-B
- Bureau: means the Bureau of Revenue Services, which may be referred to as "Maine Revenue Services. See Maine Revised Statutes Title 36 Sec. 111
- Code: means the United States Internal Revenue Code of 1986 and amendments to that Code as of December 31, 2022. See Maine Revised Statutes Title 36 Sec. 111
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Corporation: means any business entity subject to income taxation as a corporation under the laws of the United States, except the following:
A. See Maine Revised Statutes Title 36 Sec. 5102Nonresident estate or trust: shall mean an estate or trust which is not a resident estate or trust. See Maine Revised Statutes Title 36 Sec. 5102 Nonresident individual: shall mean an individual who is not a resident individual. See Maine Revised Statutes Title 36 Sec. 5102 Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses. Tax: means the total amount required to be paid, withheld and paid over or collected and paid over with respect to estimated or actual tax liability under this Title, any credit or reimbursement allowed or paid pursuant to this Title that is recoverable by the assessor and any amount assessed by the assessor pursuant to this Title, including any interest or penalties provided by law. See Maine Revised Statutes Title 36 Sec. 111 Year: means a calendar year, unless otherwise expressed. See Maine Revised Statutes Title 1 Sec. 72
2. Withholding required. Except as provided by subsection 3, every pass-through entity that does business in this State must withhold income tax at the highest tax rate provided in this Part on the proportionate quarterly share of Maine source income of each nonresident member. The method for determining the amount of the share of income and for determining the amount of withholding for each nonresident member under this section must be prescribed by rules adopted by the assessor. Rules adopted pursuant to this section are routine technical rules as defined in Title 5, chapter 375, subchapter 2?A.
[PL 2003, c. 20, Pt. AA, §1 (NEW); PL 2003, c. 20, Pt. AA, §6 (AFF).]
3. Withholding exemptions. For purposes of this section, a pass-through entity is not required to withhold tax for a nonresident member if:
A. The member’s share of annual entity income sourced to the State is less than $1,000; or [PL 2003, c. 20, Pt. AA, §1 (NEW); PL 2003, c. 20, Pt. AA, §6 (AFF).]
B. The bureau has determined by rule, ruling or instruction that the member’s income is not subject to withholding. [PL 2003, c. 20, Pt. AA, §1 (NEW); PL 2003, c. 20, Pt. AA, §6 (AFF).]
[PL 2003, c. 20, Pt. AA, §1 (NEW); PL 2003, c. 20, Pt. AA, §6 (AFF).]
SECTION HISTORY
PL 2003, c. 20, §AA1 (NEW). PL 2003, c. 20, §AA6 (AFF). PL 2005, c. 332, §24 (AMD). PL 2005, c. 332, §30 (AFF).