§201.1. Composite returns for nonresident partners or members

A.(1) Beginning January 1, 2001, each entity treated as a partnership for state income tax purposes which engages in activities in this state shall file composite returns and make composite payment of tax on behalf of any or all of its nonresident partners or members who do not agree to file an individual return as provided for in Subsection C of this Section.

(2) For purposes of this Section:

(a) The term "partnership" shall include general partnerships, partnerships in commendam, registered limited liability partnerships, and limited liability companies taxed as partnerships for state income tax purposes.

(b) The term "composite return" shall mean a return filed by an entity treated as a partnership on behalf of all of its nonresident partners or members which reports and remits the Louisiana income tax of the nonresident partner or member.

(c) The term "composite payment" shall mean a payment filed with a composite return which remits the Louisiana income tax of a partnership's nonresident partner or member.

B. With respect to each of its nonresident partners or members, a partnership shall for each taxable period do either of the following:

(1) Timely file with the Department of Revenue an agreement as provided in Subsection C of this Section.

(2) Make payment to this state as provided in Subsection D of this Section.

C.(1) The agreement referred to in Paragraph (B)(1) of this Section is a written, binding agreement by a nonresident partner or member of a partnership which shall be filed by the partnership with the department in which the nonresident partner or member agrees to all of the following:

(a) File an individual return in accordance with the provisions of Louisiana income tax law.

(b) Make timely payment of the taxes imposed on the partner or member by this state with respect to the partner's or member's share of the income of the partnership.

(2)(a) A partnership that timely files the agreement to file as provided in Paragraph (C)(1) with respect to a nonresident partner or member for a taxable period shall be considered to have timely filed such agreement for each subsequent taxable period of the partnership. The agreement will be considered timely filed for a taxable period and for all subsequent taxable periods if it is filed on or before the date the annual return of the partnership for such taxable period is required to be filed.

(b) A partnership that does not timely file such agreement for a taxable period shall be liable for the composite tax due for the period, plus interest and any appropriate delinquency penalty, which is required by this Section to be paid in the taxable period as provided for in Subsection D.

(c) The partnership shall not be precluded from timely filing such agreement for subsequent taxable periods.

D.(1) The payment referred to in Paragraph (B)(2) of this Section shall be in an amount equal to the maximum tax rate provided for individuals, multiplied by the nonresident partner's or member's share of the partnership income attributable to this state, as reflected on the partnership's return for the taxable period.

(2) A partnership shall be entitled to recover its payment pursuant to this Section, including any interest or penalty due, from the nonresident partner or member on whose behalf the payment was made. Any such payment for a taxable period must be made on or before the time the annual return of the partnership for such taxable period is required to be filed.

(3) Any amount paid by the partnership to the state pursuant to this Section shall be considered to be a payment by the nonresident partner or member on account of the income tax imposed on the nonresident partner or member for the taxable period. To the extent that the payment made on behalf of the nonresident partner or member exceeds the income tax liability of the nonresident partner or member, that nonresident partner or member shall be entitled to a refund, or may elect to utilize such excess as a credit against amounts that may be paid by the partnership on his behalf with respect to subsequent taxable periods.

E. Exemption for publicly traded partnerships.

(1) A publicly traded partnership may request an exemption from the composite payment requirements provided for in this Section from the secretary of the Department of Revenue. The request for the exemption must be in writing and contain the partnership name, address, and account number. The secretary may request additional documentation before granting an exemption.

(2) If granted, the exemption shall be effective for three years from the date the exemption is granted. At the end of the three-year period the publicly traded partnership must submit a new exemption request to continue the exemption. The secretary may revoke the exemption if the secretary determines that the nonresident partners are not filing and paying individual income taxes on their own behalf.

(3) Publicly traded partnerships shall file a composite return that includes all nonresident partners who were partners on December thirty-first of the year prior to the due date of the return.

(4) For purposes of this Section, a "publicly traded partnership" is any partnership whose interests are regularly traded on an established securities market, regardless of the number of partners, except for partnerships treated as corporations under Internal Revenue Code Section 7704(a).

F. Credits and overpayments claimed on composite returns.

(1) Notwithstanding the provisions of R.S. 47:1675(F) or any other provision of law to the contrary, when a composite return is filed, the nonresident members or nonresident partners of the partnership shall claim their respective share of any credit earned by the partnership for the applicable tax period in which the credit was earned.

(2) Credits claimed on a composite return shall not be allowed or claimed on any other return submitted on behalf of or by a member or partner for the same tax period.

(3) When a composite return reflects an overpayment that is determined to be correct by the secretary, the overpayment shall be paid to the partnership that filed the composite return.

(4) Composite returns shall be filed electronically. The secretary shall promulgate rules and regulations in accordance with the Administrative Procedure Act necessary for implementation of this Paragraph and shall further define and require the necessary methods for filing, signing, subscribing or verifying a return, statement, or other documents required for such implementation.

(5) The provisions of this Subsection shall be effective for taxable periods beginning on or after January 1, 2013.

Acts 2000, No. 34, §1, eff. Jan. 1, 2001; Acts 2000, 2d Ex.Sess., No. 21, §1, eff. for taxable years beginning after Dec. 31, 2000; Acts 2002, No. 68, §1, eff. for all taxable years beginning after Dec. 31, 2002; Acts 2012, No. 580, §1, eff. June 30, 2012.