Section 40-18-80.1 Addition to tax on corporations.
Section 40-18-80.1
Addition to tax on corporations.
(a) Addition to tax. Except as otherwise provided in this section, in the case of any underpayment of estimated tax by a corporation, there shall be added to the tax under this chapter for the taxable year an amount determined by applying the underpayment rate established under 26 U.S.C. § 6621, to the amount of the underpayment for the period of the underpayment.
(b) Amount of underpayment; period of underpayment. For purposes of subsection (a):
(1) Amount is the required installment, in excess of the amount (if any) of the installment paid on or before the due date for the installment.
(2) The period of the underpayment shall run from the due date for the installment to whichever of the following dates is the earlier:
a. The 15th day of the 3rd month following the close of the taxable year, or
b. With respect to any portion of the underpayment, the date on which such portion is paid.
(3) For purposes of paragraph (2)b, a payment of estimated tax shall be credited against unpaid required installments in the order in which such installments are required to be paid.
(c) Number of required installments; due dates. For purposes of this section there shall be four required installments for each taxable year, the time for payment of installments shall be:
| Installment | The Due Date Is |
| 1st | April 15 |
| 2nd | June 15 |
| 3rd | September 15 |
| 4th | December 15 |
(d) Amount of required installments. For purposes of this section:
(1) a. Except as otherwise provided in this section, the amount of any required installment shall be 25 percent of the required annual payment.
b. Except as otherwise provided in this subsection, the term "required annual payment" means the lesser of:
1. 100 percent of the tax shown on the return for the taxable year (or, if no return is filed, 100 percent of the tax for such year), or
2. 100 percent of the tax shown on the return of the corporation for the preceding taxable year. However, this shall not apply if the preceding taxable year was not a taxable year of 12 months, or the corporation did not file a return for such preceding taxable year showing a liability for tax. For the first taxable year beginning after December 31, 2000, the first sentence of this subparagraph shall be applied using 130 percent of the tax shown on the return for the preceding taxable year in lieu of 100 percent of such amount.
(2) Large corporations are required to pay 100 percent of the current year tax.
(3) Except as provided in paragraph b, subparagraph 2 of paragraph (1)b shall not apply in the case of a large corporation.
a. The corporation may use the amount of last year's tax for first installment.
b. Paragraph a shall not apply for purposes of determining the amount of the first required installment for any taxable year. Any reduction in such first installment by reason of the preceding sentence shall be recaptured by increasing the amount of the next required installment determined under subdivision (1) by the amount of such reduction.
(e) Lower required installment where annualized income installment or adjusted seasonal installment is less than amount determined under subsection (d). In the case of any required installment, the corporation may establish that the accrued income installment or the adjusted seasonal installment is less than the amount determined under (d) (1) in accordance with 26 U.S.C. § 6655(e).
(f) Exception where tax is small amount. No addition to tax shall be imposed under subsection (a) for any taxable year if the tax shown on the return for such taxable year (or, if no return is filed, the tax) is less than $5000.
(g) Definitions and special rules. For purposes of this section, the meaning of the following terms are:
(1) TAX:
a. The excess of the tax levied by Sections 40-18-31, over
b. The credits against tax provided by Sections 40-18-35(b) and 40-18-243.
(2) LARGE CORPORATION:
a. Any corporation if such corporation (or any predecessor corporation) had taxable income of $1,000,000 or more for any taxable year during the testing period.
b. Rules for applying subparagraph a.
1. Testing period. For purposes of subparagraph a the term "testing period" means the 3 taxable years immediately preceding the taxable year involved.
2. Certain carrybacks and carryovers not taken into account. For purposes of subparagraph a., taxable income shall be determined without regard to any net operating loss carried to the taxable year under Section 40-18-35.1.
(3) CERTAIN TAX-EXEMPT ORGANIZATIONS:
a. Any organization subject to the tax on unrelated business taxable income shall be treated as a corporation subject to tax under Section 40-18-31.
b. Any reference to taxable income shall be treated as including a reference to unrelated business taxable income. In the case of any organization described in subparagraph a, subsection (b)(2)a shall be applied by substituting "5th month" for "3rd month."
(4) APPLICATION OF SECTION TO CERTAIN TAXES IMPOSED ON S CORPORATIONS. In the case of an S corporation, for purposes of this section:
a. The following taxes shall be treated as imposed by Section 40-18-31:
1. The tax imposed by Section 40-18-174(a) (or the corresponding provisions of prior law.)
2. The tax imposed by Section 40-18-175(a).
b. Paragraph (2) of subsection (d) shall not apply.
c. Subparagraph 2 of subsection (d)(1)b shall be applied as if it read as follows:
2. The sum of
(i) The amount determined under subparagraph 1 by only taking into account the taxes referred to in subparagraphs 1 and 3 of subsection (g)(4)a and
(ii) 100 percent of the tax imposed by Section 40-18-175(a) which was shown on the return of the corporation of the preceding taxable year.
d. The requirement in the last sentence in subsection (d)(1)b that the return for the preceding taxable year show a liability for tax shall not apply.
e. Any reference to subsection (e) to taxable income shall be treated as including a reference to the net recognized built-in gain or the excess passive income (as the case may be.)
(h) Fiscal years and short years.
(1) FISCAL YEARS. In applying this section to a taxable year beginning on any date other than January 1, there shall be substituted, for the months specified in this section, the months which correspond thereto.
(2) SHORT TAXABLE YEAR. This section shall be applied to taxable years of less than 12 months in accordance with regulations prescribed by the commissioner.
(i) Regulations. The commissioner shall prescribe such regulations as may be necessary to carry out the purposes of this section.
(Act 2001-1088, 4th Sp. Sess., p. 1095, § 4.)