Form It-711 - Partnership Income Tax Forms And General Instructions

ADDITIONAL INFORMATION

exemption does not apply to a partner that participates in the

CORPORATE PARTNERS OF PARTNERSHIPS

management of the partnership or that is engaged in a unitary

A corporation will be considered to own property in Georgia,

business with another person (including entities) that

do business in Georgia, or have income from Georgia sources

participates in the management of the partnership.

whenever the corporation is a partner, whether limited or

general, in a partnership which owns property or does business

GUARANTEED PAYMENT EXAMPLE

in Georgia, or has income from Georgia sources.

The following example illustrates how guaranteed payments

should be treated when there is a nonresident partner: There

LIMITED LIABILITY COMPANY

are two partners in the partnership. Partner One is a resident

Each limited liability company and foreign limited liability

of Georgia and owns 25% of the partnership. Partner One

company shall be classified as a partnership for Georgia income

receives a guaranteed payment of $10. Partner Two is a

tax purposes unless classified otherwise for Federal income

nonresident of Georgia and owns 75% of the partnership.

tax purposes, in which case the limited liability company or

Partner Two receives a guaranteed payment of $40. The profit

foreign limited liability company shall be classified for Georgia

and loss sharing ratio is the same as the ownership percentage.

income tax purposes in the same manner as it is classified for

The Georgia apportionment ratio on line 2, schedule 6, of Form

federal income tax purposes.

700 is 50%.

NET WORTH TAX

Ordinary income reported on

The partnership return is for information only. Therefore,

line 1, schedule 7, of Form 700 .................................... $100

partnerships are not subject to net worth tax.

Guaranteed payment reported on

line 5, schedule 7, of Form 700 ...................................... $50

PARTNERSHIPS

Total income for Georgia purposes,

WITH NONRESIDENT PARTNERS

line 12, schedule 7, of Form 700 .................................. $150

Nonresident partners of partnerships doing business both within

Partner One (resident) is required to report $35 on the Georgia

and without Georgia shall compute their proportionate part of

return. The entire $10 guaranteed payment plus the share of

the partnership’s allocated and apportioned income from the

the ordinary income of the partnership, which is $25 ($100

schedules on Form 700. Georgia net income computed on

ordinary income placed on line 1, schedule 7, of Form 700

Line 7 of Schedule 1 should be multiplied by the percentage of

multiplied by the ownership percentage of 25%). Partner Two

ownership. This amount is further adjusted by the partner’s

(nonresident) is required to report $58 on the Georgia return.

share of the separately stated items mentioned in the Federal

The Georgia portion of the guaranteed payment is $20 ($40

Tax Changes section on page 1 and the Adjustments to Federal

guaranteed payment multiplied by the Georgia ratio of 50%)

Income section on page 5.

plus the share of the Georgia portion of the ordinary income of

A partnership that owns property or does business within this

the partnership, which is $38 ($100 ordinary income placed on

State is required by O.C.G.A. § 48-7-129 to withhold on the

line 1, schedule 7, of Form 700 multiplied by their ownership

annual partner’s share of taxable income sourced to Georgia.

percentage of 75% multiplied by the Georgia ratio of 50%).

The withholding tax rate is 4%. Withholding is not required if

the annual partner’s share of taxable income sourced to Georgia

FREQUENTLY ASKED QUESTIONS

Answers to frequently asked questions regarding corporations,

is less than $1,000. Also there are various exemptions from

S Corporations, partnerships, LLC’s, and nonresident withholding

nonresident withholding. See Regulation 560-7-8-.34 and Form

are available on our website at

NRW-Exemption. As an alternative to withholding, the

partnership may file a composite return (Form IT CR) for its

TELEPHONE ASSISTANCE

nonresident partners. Permission is not required to file a

composite return. Please check the Composite Return Filed

Compliance Division .................................... .404- 417-6400

box on Page 1 of Form 700.

Composite Returns ..................................... 1-877-423-6711

Subsection (c) of O.C.G.A. § 48-7-24 provides an exemption

Employer Withholding Information ............... 1-877-423-6711

from Georgia income tax for a nonresident partner who receives

Income Tax Forms ...................................... 1-877-423-6711

income from a partnership which derives income exclusively

Registration & Licensing Unit ...................... 1-877-423-6711

from buying, selling, dealing in, and holding securities on its

own behalf and not as a broker. Accordingly, withholding under

Taxpayer Services Division .......................... .1-877-423-6711

O.C.G.A. § 48-7-129 would not apply in this situation.

Note: This exemption does not apply to a family limited

partnership or similar nontaxable entity, the majority interest of

which is owned by one or more natural or naturalized citizens

related to each other within the fourth degree of reckoning

according to the laws of descent and distribution. Also, this

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Form It-711 - Partnership Income Tax Forms And General Instructions - 2013 Page 9

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