South Carolina Code 12-8-590. Tax withholding on distributions to nonresidential shareholders of “S” corporations and nonresident partners; returns
(B) An "S" corporation required to withhold taxes on distributed or undistributed income shall make a return with each payment of tax to the department disclosing on the return the names, taxpayer identification numbers, the total amount of South Carolina taxable income paid or credited to each nonresident shareholder, the tax withheld for each nonresident shareholder, and any other information the department requires. The "S" corporation shall furnish to each nonresident shareholder a written statement as required by § 12-8-1540(A) as proof of the amount of his share of distributed or undistributed income and of the amount that has been withheld.
Terms Used In South Carolina Code 12-8-590
- Affidavit: A written statement of facts confirmed by the oath of the party making it, before a notary or officer having authority to administer oaths.
- 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.
- Internal Revenue Code: means the Internal Revenue Code as defined in § 12-6-40(A). See South Carolina Code 12-8-10
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Nonresident: means an individual domiciled outside this State and an entity whose principal place of business is outside of this State. See South Carolina Code 12-8-10
- partnership: includes a limited liability company taxed for South Carolina income tax purposes as a partnership;
(2) "partner" includes a member of a limited liability company taxed for South Carolina income tax purposes as a partnership;
(3) "corporation" includes a limited liability company or professional or other association taxed for South Carolina income tax purposes as a corporation; and
(4) "shareholder" includes a member of a limited liability company taxed for South Carolina income tax purposes as a corporation. See South Carolina Code 12-2-25 - 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.
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
(C) Partnerships are required to withhold income taxes at a rate of five percent on a nonresident partner’s share of South Carolina taxable income of the partnership, whether distributed or undistributed, and pay the withheld amount to the department in the manner prescribed by the department. The partnership shall make a return and pay over the withheld funds on or before the fifteenth day of the third month following the close of its tax year. Taxes withheld in the name of the nonresident partner must be used as credit against taxes due at the time the nonresident files income taxes for the taxable year.
(D) A partnership required to withhold taxes on distributed or undistributed income shall make a return with each payment of tax to the department disclosing on the return the name, taxpayer identification number, the total amount of South Carolina taxable income paid or credited to each nonresident partner, the tax withheld for each nonresident partner, and other information the department requires. The partnership shall furnish to each nonresident partner a written statement as required by § 12-8-1540(A) as proof of the amount of his share of distributed or undistributed income that has been withheld.
(E) If a nonresident shareholder or partner provides the partnership or "S" corporation with a statement that the shareholder or partner is an organization exempt from income taxes under Internal Revenue Code Section 501(a), then the partnership or "S" corporation is not required to withhold with regard to that partner or shareholder. The statement must contain the shareholder’s or partner’s name, federal identification number, Internal Revenue Code section exemption number, and a copy of the Internal Revenue Service exemption letter.
(F)(1) For purposes of computing the penalty under § 12-54-55, the amount withheld is deemed a payment of estimated tax, and an equal part of the amount is deemed paid on each estimated tax due date for the previous taxable year.
(2) If an "S" corporation or partnership is subject to withholding on the sale of real property pursuant to § 12-8-580, the "S" corporation or partnership is exempt from withholding on income attributable to the sale under this section.
(3) If a nonresident shareholder or partner files an affidavit with the department in a form acceptable to the department by which he agrees that he is subject to the personal jurisdiction of the department and courts of this State for the purpose of determining and collecting any South Carolina taxes, including estimated taxes, together with any related interest and penalties, then the "S" corporation or partnership is not required to withhold with regard to that shareholder or partner. The department may revoke an exemption granted by this item at any time it determines that the nonresident shareholder or partner is not abiding by its terms.
(G) The department is authorized to require such returns and other information as it considers appropriate to administer the provisions of this section, and to issue rulings and promulgate regulations as necessary or appropriate to implement this section.