(a) Any affected business entity may elect to file a composite income tax return on behalf of each nonresident individual who is a member of such affected business entity, subject to any requirements and conditions the Commissioner of Revenue Services may prescribe in the return form and instructions for such return. The affected business entity shall make such election by the due date or extended due date of such affected business entity's return under this chapter.
(b) If an affected business entity elects to file a composite income tax return pursuant to subsection (a) of this section, the affected business entity shall pay to the commissioner the tax calculated under subsection (c) of this section, plus penalties and interest due thereon, on behalf of each nonresident individual member of such affected business entity. Any such payment made by an affected business entity to the commissioner with respect to any taxable period shall be considered to be a payment by such nonresident individual member for the tax imposed on such member under chapter 229 for such taxable period.
(c) The composite income tax due on behalf of each nonresident individual member shall equal (1) such member's distributive share of the affected business entity's items derived from or connected with sources within this state as calculated under subdivision (1) of subsection (c) of section 12-699 multiplied by the highest marginal rate in effect under section 12-700 for the taxable year, less (2) the credit allowed to such nonresident individual member pursuant to subdivision (1) of subsection (g) of section 12-699 with respect to the affected business entity. In no event shall an amount due on behalf of a nonresident individual member be less than zero. Such composite income tax shall be due at the same time, and subject to penalties and interest, as if such tax was a tax due from the affected business entity under section 12-699.
(d) (1) If income from one or more affected business entities that each elect to file a composite income tax return pursuant to this section is the only source of income derived from or connected with sources within this state for a nonresident individual member, or for the member and the member's spouse if a joint federal income tax return is or shall be filed, the filing by the affected business entity of the composite income tax return and the payment by the affected business entity on behalf of the member of the tax imposed under this section shall satisfy the filing and payment requirements otherwise separately imposed on the member under chapter 229. The commissioner may make any deficiency assessment against the affected business entity or the member, provided any such assessment against the member shall be limited to the member's share thereof. Except as provided in section 12-733, any such assessment shall be made not later than three years after the affected business entity's annual return pursuant to section 12-699 is filed.
(2) If income from one or more affected business entities that each elect to file a composite income tax return pursuant to this section is not the only source of income derived from or connected with sources within this state for a nonresident individual member, or for the member and the member's spouse if a joint federal income tax return is or shall be filed, nothing in this section shall be construed as excusing the member from the obligation to file such member's own separate tax return under chapter 229. In such event, the member shall receive credit for the composite income tax paid under this section by the affected business entity on the member's behalf. The commissioner may make any deficiency assessment that is related to the member's distributive share of income from the affected business entity against the affected business entity or the member. Except as provided in section 12-733, any such assessment against the affected business entity shall be made not later than three years after the affected business entity's annual return pursuant to section 12-699 is filed.
(P.A. 22-117, S. 16.)
History: P.A. 22-117 effective May 27, 2022.