43-418. Payroll service company; registration; definitions

A. For withholding tax returns due to be filed from and after May 31, 2011, a person shall not act as a payroll service company unless the person is registered with the department under this section.

B. A person shall apply to the department electronically for registration as a payroll service company under this subsection and the department shall grant the application if the application indicates that the person will comply with this section.

C. A payroll service company registered with the department under this section shall:

1. Be authorized in writing pursuant to section 42-2003 by each client to act on behalf of the client with respect to this state's withholding tax.

2. Keep a client's monies held for payment of state withholding taxes or other obligations in an account separate from the payroll service company's own monies.

3. Make payments electronically and file returns electronically with the department in compliance with the department's requirements for electronic payments and electronic filing.

4. Electronically provide to the department a client list and electronically update the client list at least monthly, by the first of every month. The client list shall include at least the name, address, tax identification number and federal deposit frequency of each client. The address listed for the client must be the client's actual street or post office box address and not the payroll service company's address.

5. Timely file all returns and timely make all withholding tax payments required under its contracts with its clients.

6. On request, provide to the department, within the time specified in the request, a copy of any contract with a client.

7. Comply with all other requirements of this section or rules adopted pursuant to this section.

D. A payroll service company may terminate its registration by written notice to the department.

E. For the purposes of this section:

1. " Client" means another employer for whom a payroll service company provides payroll services for a fee.

2. " Payroll service company" means a person who has custody or control over a client's monies for the purpose of paying the withheld taxes and filing returns of a client with the department.

3. " Person" means an individual, fiduciary, partnership, corporation, limited liability company, association or other entity organized under the laws of this state or any other jurisdiction.