[§235-128]  Returns; shareholder agreements;mandatory payments. (a)  An S corporation which engages in activities inthis State which would subject a C corporation to the requirement to file areturn under section 235-92 shall file with the department an annual return, inthe form prescribed by the department, on or before the due date prescribed forthe filing of C corporation returns by section 235-97.

Every S corporation shall make a return foreach taxable year, stating specifically the items of its gross income and thedeductions allowable by this chapter, the name, address, and social security orfederal identification number of each person owning stock in the corporation atany time during the taxable year, the number of shares of stock owned by eachshareholder at all times during the taxable year, the income attributable tothe State and income not attributable to the State with respect to eachshareholder as determined under this part, the modifications required bysection 235-123, the amount of money and other property distributed by thecorporation during the taxable year to each shareholder, the date of each suchdistribution, and such other information as the department may by form or ruleprescribe.

The S corporation, on or before the day onwhich such return is filed, shall furnish to each person who was a shareholderduring the year a copy of the information shown on the return as the departmentmay by form or rule prescribe.  Any return filed pursuant to this section, forpurposes of sections 235-111 and 235-112, shall be treated as a return filed bythe corporation under section 235-92.  The S corporation shall also maintainthe accumulated adjustments account described in section 235-127(c)(2).

(b)  The department shall permit S corporationsto file composite returns and to make composite payments of tax on behalf ofsome or all of its nonresident shareholders.  The department may permitcomposite returns and payments to be made on behalf of resident shareholders.

(c)  An S corporation shall file with thedepartment, in the form prescribed by the department, the agreement of eachnonresident shareholder of the corporation:

(1)  To file a return and make timely payment of alltaxes imposed by this State on the shareholder with respect to the income ofthe S corporation; and

(2)  To be subject to personal jurisdiction in thisState for purposes of the collection of unpaid income tax, together withrelated interest and penalties.

If the corporation fails to timely file theagreements required by paragraphs (1) and (2) on behalf of each of itsnonresident shareholders, then the corporation, at the times set forth insubsection (d), shall pay to this State on behalf of each nonresidentshareholder in respect of whom an agreement has not been timely filed an amountequal to the highest marginal tax rate in effect under section 235-51multiplied by the amount of the shareholder's pro rata share of the incomeattributable to the State reflected on the corporation's return for the taxableperiod.  An S corporation shall be entitled to recover a payment made pursuantto the preceding sentence from the shareholder on whose behalf the payment wasmade.

(d)  The agreements required to be filedpursuant to subsection (c) shall be filed at the following times:

(1)  At the time the annual return is required to befiled for the first taxable period for which the S corporation became subjectto this part, and

(2)  At the time the annual return is required to befiled for any taxable period in which the corporation had a nonresidentshareholder on whose behalf such an agreement has not been previously filed.

(e)  Any amount paid by the corporation to thisState pursuant to subsection (b) or (c) shall be considered to be a payment bythe shareholder on account of the income tax imposed on the shareholder for thetaxable period.

(f)  Any officer of any S corporation whowilfully fails to provide any information, file any return or agreement, makeany payment, or maintain any account as required by this section or by section231-15.6 shall be guilty of a misdemeanor. [L 1990, c 16, pt of §1]