Oklahoma § 68-2385.31 - Amounts withheld by pass-through entities – Fiduciary

§ 68-2385.31. Amounts withheld by pass-through entities – Fiduciary

duty to state – Failure to withhold, file return, pay required

amounts, or furnish statement – Liability for penalties and interest

– Fine.

A. Any amounts withheld in accordance with the provisions of

Section 2385.30 of this title shall be deemed to be held in trust

for the State of Oklahoma, and, as trustee, the pass-through entity

shall have a fiduciary duty to the State of Oklahoma in regard to

such amounts and shall be subject to the trust laws of this state.

Any pass-through entity who fails to pay to the Tax Commission any

amounts required to be withheld by such pass-through entity, after

such amounts have been withheld from distributions to nonresident

members, and appropriates the amount held in trust to the passthrough entity's own use, or to the use of any person not entitled

thereto, without authority of law, shall be guilty of embezzlement.

B. If any pass-through entity fails to withhold or pay required

estimated payments of the amounts required to be withheld by Section

2385.30 of this title and thereafter income tax is paid by the

nonresident member with respect to such payment, the amount so

required to be withheld shall not be collected from the pass-through

entity, but such pass-through entity shall not be relieved from the

liability for penalties or interest otherwise applicable because of

such failure to withhold or pay such amount.

C. If a pass-through entity fails to file a return or to pay to

the Tax Commission the amounts withheld or any estimated payment

required within the time prescribed by Section 2385.30 of this

title, there shall be imposed on the pass-through entity a penalty

equal to ten percent (10%) of the amount required to be withheld or

paid, or ten percent (10%) of the amount of the underpayment of the

amount required to be withheld or paid, if such failure is not

corrected within fifteen (15) days after the tax becomes delinquent.

There shall also be imposed on such pass-through entity interest at

Oklahoma Statutes - Title 68. Revenue and Taxation

the rate of one and one-fourth percent (1 1/4%) per month during the

period such underpayment exists. For the purposes of this

subsection, "underpayment" shall mean the excess of the amount

required to be paid over the amount thereof actually paid on or

before the date prescribed therefor. Such penalty and interest

shall be added to and become a part of the amount assessed.

However, the Tax Commission shall not collect the penalty assessed

if the pass-through entity remits the amount required to be withheld

within thirty (30) days of the mailing of a proposed assessment or

voluntarily pays such amount upon the filing of an amended return.

D. Any pass-through entity who is required under the provisions

of subsection E of Section 2385.30 of this title to furnish a

statement to a nonresident member, but who willfully fails to

furnish such recipient the statement, shall be punished by an

administrative fine not exceeding One Thousand Dollars ($1,000.00).

Added by Laws 2003, c. 472, § 25. Amended by Laws 2004, c. 518, §

5, eff. July 1, 2004; Laws 2012, c. 357, § 11, eff. July 1, 2012.