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Bill Detail: HB23-1277

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Title Reporting Adjustments To Taxable Income
Status Governor Signed (06/01/2023)
Bill Subjects
  • Fiscal Policy & Taxes
House Sponsors R. Taggart (R)
Senate Sponsors J. Smallwood (R)
C. Kolker (D)
House Committee Finance
Senate Committee Finance
Date Introduced 03/30/2023
Summary

Under current law, partnerships and S corporations (pass-through
entities) have 3 options for ensuring that the income taxes owed by
nonresident owners will be paid. Pass-through entities may file a
composite return on behalf of these owners, withhold an estimated tax
payment, or collect and file an agreement that the owner will file a
separate return. For income tax years beginning on and after January 1,
2024, section 1 of the bill consolidates the composite return and
withholding options and clarifies the calculation of the required payment.
Section 2 adopts the multistate tax commission's model statute for
reporting adjustments to federal taxable income. When federal taxable
income is adjusted by the internal revenue service, or by the taxpayer
through an amended federal return, the taxpayer must also report that
change to the state. Current law requires those changes to be reported
within 30 days and does not address the new federal centralized
partnership audit procedures. The bill provides additional time for
reporting adjustments and allows pass-through entities to handle
adjustments at the entity level on behalf of their owners.
Section 3 changes the due date for income tax returns by C
corporations. Current law requires state income tax returns to be filed by
C corporations by April 15, and prior to 2017, the federal income tax
return deadline for C corporations was March 15. This meant that the
state's April 15 due date and October 15 extension deadline was one
month after the federal due date. In 2017, congress moved the federal due
date for C corporations to April 15. Section 3 restores the one-month lag
by changing the state due date to May 15, with a November 15 extension
deadline.
Sections 4, 5, 6, 7, and 8 make conforming amendments.

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with Amendments
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