§ 5914. Returns and mandatory payments
(a) An S corporation that 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 S corporation
returns under 26 U.S.C. § 6072(b). The return shall set forth the name, address, and Social Security or federal identification
number of each shareholder; the income attributable to Vermont and income not attributable
to Vermont with respect to each shareholder as determined under this subchapter; and
such other information as the Commissioner may by regulation prescribe. The S corporation
shall, on or before the day on which such return is filed, furnish to each person
who was a shareholder during the year a copy of such information shown on the return
as the Commissioner may by regulation prescribe.
(b) The Commissioner may upon request and for ease of administration permit S corporations
to file composite returns and to make composite payments of tax on behalf of some
or all of its nonresident shareholders. In addition, the Commissioner may require
an S corporation that has in excess of 50 nonresident shareholders to file composite
returns and to make composite payments at the second-highest marginal rate on behalf
of all of its nonresident shareholders.
(c) With respect to each of its nonresident shareholders, an S corporation shall for each
taxable period be liable for all income taxes, together with related interest and
penalties, imposed on the shareholder by Vermont with respect to the income of the
S corporation. An S corporation 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 for individuals in subchapter 5 of this chapter; provided,
however, that an S corporation with a single shareholder and a tax liability under
this section of $250.00 or less in the prior year, and an S corporation with two or
more shareholders 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” means an amount equal to the
next-to-lowest marginal tax rate prescribed under section 5822 of this title multiplied by the shareholder’s pro rata share of the income attributable to Vermont.
(d) If interest or penalty is imposed on an S corporation for any underpayment of estimated
tax under subsection (c) of this section, no interest or penalty shall be imposed
upon a shareholder for underpayment of estimated taxes relating to the shareholder’s
pro rata share of the income attributable to Vermont to which the interest or penalty
relates. If an S corporation 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
shareholders, the Commissioner shall abate such excess interest and penalties. Nothing
in this subsection shall be construed as authorizing a corporation to reduce its estimated
tax payments.
(e) Any amount paid by the corporation to Vermont pursuant to this section shall be considered
to be a payment by the shareholder of the income tax imposed on the shareholder for
the taxable period pursuant to section 5822 of this title. An S corporation shall be entitled to recover a payment made pursuant to this section
from the shareholder on whose behalf the payment was made. (Added 1995, No. 169 (Adj. Sess.), § 21, eff. May 15, 1996; amended 1999, No. 119 (Adj. Sess.), § 3a, eff. May 18, 2000; 2005, No. 14, § 3, eff. May 3, 2005; 2005, No. 207 (Adj. Sess.), § 1, eff. May 31, 2006; 2011, No. 45, § 20, eff. May 24, 2011; 2017, No. 73, § 4, eff. June 13, 2017; 2021, No. 105 (Adj. Sess.), § 545, eff. July 1, 2022; 2023, No. 72, § 19, eff. January 1, 2023.)