§ 10-102.1. S corporations and partnerships
West's Annotated Code of MarylandTax-GeneralEffective: July 1, 2023
Effective: July 1, 2023
MD Code, Tax - General, § 10-102.1
§ 10-102.1. S corporations and partnerships
(8) “Pass-through entity's taxable income” means the portion of a pass-through entity's income under the federal Internal Revenue Code, calculated without regard to any deduction for taxes based on net income that are imposed by any state or political subdivision of a state, that is derived from or reasonably attributable to the trade or business of the pass-through entity in this State.
(b)(1) Subject to paragraph (2) of this subsection, in addition to any other tax imposed under this title, a tax is imposed on each pass-through entity.
(c)(1) With respect to a pass-through entity that pays the tax imposed under subsection (b)(1) of this section in accordance with subsection (b)(2)(i) of this section, the tax shall be treated as a tax imposed on the nonresident or nonresident entity members that is paid on behalf of the nonresidents or nonresident entities by the pass-through entity.
(d)(1) With respect to a pass-through entity that pays the tax imposed under subsection (b)(1) of this section in accordance with subsection (b)(2)(i) of this section, the tax imposed is the sum of:
(i) a rate equal to the sum of the rate of the tax imposed under § 10-106.1 of this subtitle and the top marginal State tax rate for individuals under § 10-105(a) of this subtitle applied to the sum of each nonresident individual member's distributive share or pro rata share of the pass-through entity's nonresident taxable income; and
(i) a rate equal to the sum of the rate of the tax imposed under § 10-106.1 of this subtitle and the top marginal State tax rate for individuals under § 10-105(a) of this subtitle applied to the sum of each individual member's distributive share or pro rata share of the pass-through entity's taxable income; and
(e) In accordance with § 10-701.1 of this title, each member may claim a credit against the tax imposed on the member for the member's proportionate share of the tax paid by the pass-through entity under subsection (b) of this section.
(f)(1)(i) The tax imposed under subsection (b)(1) of this section that is paid in accordance with subsection (b)(2)(i) of this section and for which no election is made under subsection (b)(2)(ii) of this section does not apply with respect to the distributive share or pro rata share of a member that is itself a pass-through entity formed under the laws of the State or qualified by or registered with the Department of Assessments and Taxation to do business in the State.
(2) The tax imposed under subsection (b)(1) of this section that is paid in accordance with subsection (b)(2)(i) of this section and for which no election is made under subsection (b)(2)(ii) of this section does not apply with respect to the direct or indirect distributive share or pro rata share of a member that is:
(g) The Comptroller may provide by regulation for:
(h)(1) Subject to paragraph (2) of this subsection, if a partnership fails to pay the tax when due, the tax may be collected from the partners under the law applicable to debts of the partnership, with the partnership and partners having rights of contribution against any partner on whose behalf the tax is paid.
(2) Unless it is established by the Comptroller that the partner participated in a pattern of distributions to one or more partners with the intention of defeating the partnership liability for the tax imposed under subsection (b) of this section, any partner otherwise liable under paragraph (1) of this subsection shall be liable for the tax imposed on the partnership only to the extent of distributions from the partnership to that partner after the tax was due to be paid by the partnership.
(i) Except as provided in § 10-701.1 of this title, nothing in this section limits or affects in any way the liability of an individual nonresident member or a nonresident entity member for the tax imposed on the individual nonresident or nonresident entity under § 10-102 of this subtitle.
(j) The tax imposed under subsection (b)(1) of this section that is paid in accordance with subsection (b)(2)(i) of this section and for which no election is made under subsection (b)(2)(ii) of this section does not apply to a publicly traded pass-through entity that has agreed to file with the Comptroller an annual information return reporting the name, address, taxpayer identification number, and other information requested by the Comptroller of each nonresident or nonresident entity member whose distributive share or pro rata share of the pass-through entity's nonresident taxable income for the taxable year exceeds $500.
Credits
Added by Acts 1991, c. 86, § 1, eff. July 1, 1991. Amended by Acts 1992, c. 536, § 1, eff. Oct. 1, 1992; Acts 1997, c. 4, § 1, eff. July 1, 1997; Acts 2005, c. 444, § 2, eff. July 1, 2005; Acts 2006, c. 45, § 1, eff. July 1, 2006; Acts 2007, 1st Sp. Sess., c. 3, § 1, eff. Jan. 1, 2008; Acts 2008, c. 10, § 2, eff. July 1, 2008; Acts 2010, c. 611, § 2, eff. June 1, 2010; Acts 2020, c. 641, § 1, eff. July 1, 2020; Acts 2021, c. 39, § 2, eff. Feb. 15, 2021; Acts 2021, c. 669, § 2, eff. May 30, 2021; Acts 2023, c. 445, § 1, eff. July 1, 2023.
MD Code, Tax - General, § 10-102.1, MD TAX GENERAL § 10-102.1
Current through legislation effective through April 9, 2023, from the 2024 Regular Session of the General Assembly. Some statute sections may be more current, see credits for details.
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