Vermont § 5920 - Returns and mandatory payments

§ 5920. Returns and mandatory payments

• (a) A partnership or limited liability company, which engages in activities in Vermont
  that would subject a C corporation to the requirement to file a return under section 5862 of this title, shall file with the Commissioner an annual return, in the form prescribed by the
  Commissioner, on or before the due date prescribed for the filing of the entity’s
  federal return. The return shall set forth the name, address, and Social Security
  or federal identification number of each partner or member; the partnership or limited
  liability company income attributable to Vermont and the income not attributable to
  Vermont with respect to each partner or member as determined under this chapter; and
  such other information as the Commissioner may by rule prescribe. The partnership
  or limited liability company shall, on or before the day on which such return is filed,
  furnish to each person who was a partner or member during the year a copy of such
  information shown on the return as the Commissioner may by rule prescribe. (b) The Commissioner may permit a partnership or limited liability company to file composite
  returns and to make composite payments of tax on behalf of some or all of its nonresident
  partners or members. In addition, the Commissioner may require a partnership or limited
  liability company that has in excess of 50 nonresident partners or members to file
  composite returns and to make composite payments at the second-highest marginal rate
  on behalf of all of its nonresident partners or members. (c) With respect to each of its nonresident partners or nonresident members, a partnership
  or limited liability company shall for each taxable period be liable for all income
  taxes, together with related interest and penalties, imposed on the partner or member
  by Vermont with respect to the income of the partnership or limited liability company.
  A partnership or limited liability company shall declare estimated tax, and shall
  pay estimated tax, including applicable interest and penalties, on such liability
  in the manner and at the times specified in subchapter 5 of this chapter; provided,
  however, that a partnership or limited liability company with a single partner or
  member and a tax liability under this section of $250.00 or less in the prior year,
  and a partnership or limited liability company with two or more partners or members
  and a tax liability under this section of $500.00 or less in the prior year, may file
  the entire estimated amount on or before the fourth payment date, January 15. As used
  in this subsection, “estimated tax” as used in subchapter 5 of this chapter shall
  mean an amount equal to the next-to-lowest marginal tax rate prescribed under section 5822 of this title, multiplied by the partner’s or member’s pro rata share of the income attributable
  to Vermont. (d) If interest or penalty is imposed upon a partnership or limited liability company
  for any underpayment of estimated tax under subsection (c) of this section, no interest
  or penalty shall be imposed upon a partner or member for underpayment of estimated
  taxes relating to the partner’s or member’s pro rata share of the income attributable
  to Vermont to which the interest or penalty relates. If a partnership or limited liability
  company shows to the satisfaction of the Commissioner that interest or penalties have
  been assessed against it in excess of the interest or penalties that would have been
  applied against the combined, actual tax liabilities of all nonresident partners or
  members, the Commissioner shall abate such excess interest and penalties. Nothing
  in this subsection shall be construed as authorizing a partnership or limited liability
  company to reduce its estimated tax payments. (e) Any amount paid by the partnership or limited liability company to Vermont pursuant
  to this section shall be considered to be a payment by the partner or member on account
  of the income tax imposed on the partner or member for the taxable period pursuant
  to section 5822 of this title. A partnership or limited liability company shall be entitled to recover a payment
  made pursuant to this section from the partner or member on whose behalf the payment
  was made. (f)(1) Subsection (c) of this section shall not apply to a partnership or limited liability
  company engaged solely in the business of operating one or more affordable housing
  projects in this State, provided such partnership or limited liability company shall
  notify its nonresident partners or nonresident members of their obligation under subchapter
  6 of this chapter to file Vermont personal income tax returns and under subchapter
  2 of this chapter to pay a tax on income earned from such investment; instruct each
  nonresident partner or nonresident member to pay such tax; and in addition to filing
  copies of all schedules K-1 with its partnership or limited liability company return
  shall file with the Commissioner segregated duplicate copies of all nonresident schedules
  K-1. In this subsection, “affordable housing project” means a rental residential development
  that is intended primarily to benefit low-income Vermont residents throughout the
  period of the investment and that is subject to one or more of the following: (A) a housing subsidy covenant that has been granted to the Vermont Housing and Conservation
  Board; (B) a regulatory agreement or LIHTC housing subsidy covenant that has been granted to
  the Vermont Housing Finance Agency; (C) a housing assistance payment contract with the U.S. Department of Housing and Urban
  Development pursuant to 24 C.F.R. Part 883; or (D) a regulatory agreement that has been granted to the Farmers Home Administration of
  the U.S. Department of Agriculture. (2) In this subsection, “low income” means income that is less than or equal to area median
  income based on statistics from State or federal sources. (g)(1) Subsection (c) of this section shall not apply to a partnership or limited liability
  company engaged solely in the business of operating one or more federal new market
  tax credit projects in this State, provided such partnership or limited liability
  company shall: (A) notify its nonresident partners or nonresident members of their obligation under subchapter
  6 of this chapter to file Vermont personal income tax returns and under subchapter
  2 of this chapter to pay a tax on income earned from such investment; (B) instruct each nonresident partner or nonresident member to pay such tax; and (C) in addition to filing copies of all schedules K-1 with its partnership or limited
  liability company return, file with the Commissioner segregated duplicate copies of
  all nonresident schedules K-1. (2) As used in this subsection, “federal new market tax credit project” means a business
  that is intended primarily to benefit low-income Vermont residents throughout the
  period of investment and that is subject to the following: (A) has been determined by the U.S. Department of the Treasury to be a community development
  entity; (B) has been awarded an allocation of federal new market tax credits under 26 U.S.C. § 45D; and (C) is a partnership or limited liability corporation that is a pass-through of the federal
  new market tax credit to the nonresident investor. (h)(1) Notwithstanding any provisions in this section, a publicly traded partnership as defined
  in 26 U.S.C. § 7704(b) that is treated as a partnership for the purposes of the Internal Revenue Code is
  exempt from any income tax liability and any compliance and payment obligations under
  subsections (b) and (c) of this section if information required by the Commissioner
  under subdivision (2) of this subsection is provided by the due date of the partnership’s
  return. (2) Publicly traded partnerships shall provide to the Commissioner in an electronic format,
  according to rules or procedures adopted by the Commissioner, an annual return that
  includes the name, address, taxpayer identification number, and other information
  requested by the Commissioner for each partner with Vermont-source income in excess
  of $500.00. (3) A lower-tier pass-through entity of a publicly traded partnership may request from
  the Commissioner an exemption from the compliance and payment obligations specified
  in subsections (b) and (c) of this section. The request for the exemption must be
  in writing and contain: (A) the name, the address, and the account number or federal identification number of
  each of the lower-tier pass-through entity’s partners, shareholders, members, or other
  owners; and (B) information that establishes the ownership structure of the lower-tier pass-through
  entity and the amount of Vermont source income. (4) The Commissioner may request additional documentation before granting an exemption
  to a lower-tier pass-through entity. As used in this subsection, a “lower-tier pass-through
  entity” means a pass-through entity for purposes of the Internal Revenue Code, which
  can include a partnership, S corporation, disregarded entity, or limited liability
  company and which allocates income, directly or indirectly, to a publicly traded partnership.
  The exemption under subdivision (3) of this subsection shall only apply to income
  allocated, directly or indirectly, to a publicly traded partnership. (5) If granted, the exemption for the lower-tier pass-through entity shall be effective
  for three years following the date the exemption is granted. At the end of the three-year
  period, the lower-tier pass-through entity of a publicly traded partnership shall
  submit a new exemption request to continue the exemption. The Commissioner may revoke
  the exemption for the lower-tier pass-through entity if the Commissioner determines
  that the lower-tier pass-through entity is not satisfying its tax payment and reporting
  obligations to the State with respect to income allocated, directly or indirectly,
  to nonresident partners or members that are not publicly traded partnerships. (Added 1995, No. 169 (Adj. Sess.), § 24, eff. May 15, 1996; amended 1997, No. 50, §§ 21, 22, eff. June 26, 1997; 1999, No. 119 (Adj. Sess.), § 3b, eff. May 18, 2000; 2005, No. 14, § 4, eff. May 3, 2005; 2005, No. 207 (Adj. Sess.), § 2, eff. May 31, 2006; 2011, No. 45, § 21, eff. May 24, 2011; 2011, No. 143 (Adj. Sess.), § 17, eff. May 15, 2012; 2015, No. 57, § 70, eff. June 11, 2015; 2015, No. 97 (Adj. Sess.), § 66; 2019, No. 51, § 10, eff. June 10, 2019; 2023, No. 72, § 20, eff. January 1, 2023.)