2005 Idaho Code - 63-3035 — STATE WITHHOLDING TAX ON PERCENTAGE BASIS -- WITHHOLDING, COLLECTION AND PAYMENT OF TAX

                                  TITLE  63
                             REVENUE AND TAXATION
                                  CHAPTER 30
                                  INCOME TAX
    63-3035.  STATE WITHHOLDING TAX ON PERCENTAGE BASIS -- WITHHOLDING,
COLLECTION AND PAYMENT OF TAX. (a) Every employer who is required under the
provisions of the Internal Revenue Code to withhold, collect and pay income
tax on wages or salaries paid by such employer to any employee (other than
employees specified in Internal Revenue Code section 3401(a)(2)) shall, at the
time of such payment of wages, salary, bonus or other emolument to such
employee, deduct and retain therefrom an amount substantially equivalent to
the tax reasonably calculated by the state tax commission to be due from the
employee under this chapter. The state tax commission shall prepare tables
showing amounts to be withheld, and shall supply same to each employer subject
to this section. In the event that an employer can demonstrate administrative
inconvenience in complying with the exact requirements set forth in these
tables, he may, with the consent of the state tax commission and upon
application to it, use a different method which will produce substantially the
same amount of taxes withheld. Every employer making payments of wages or
salaries earned in Idaho, regardless of the place where such payment is made:
    (1)  shall be liable to the state of Idaho for the payment of the tax
    required to be deducted and withheld under this section and shall not be
    liable to any individual for the amount deducted from his wages and paid
    over in compliance or intended compliance with this section;
    (2)  must pay to the state tax commission monthly on or before the 20th
    day of the succeeding month, or at such other times as the state tax
    commission may allow, an amount of tax which, under the provisions of this
    chapter, he is required to deduct and withhold;
    (3)  shall register with the state tax commission, in the manner
    prescribed by it, to establish an employer's withholding account number.
    The account number will be used to report all amounts withheld, for the
    annual reconciliation required in this section, and for such other
    purposes relating to withholding as the state tax commission may require;
    and
    (4)  must, notwithstanding the provisions of paragraphs (1) and (2) of
    this subsection, if the amount of withholding of such employer for the
    preceding twelve (12) month period equals or exceeds two hundred forty
    thousand dollars ($240,000) per annum or an average of twenty thousand
    dollars ($20,000) per month per annum, pay to the state tax commission on
    the basis of withholding periods which begin on the 16th day of the month
    and end on the 15th day of the following month, and payment shall be made
    not later than five (5) days after the end of the withholding period.
    (5)  If a payment required pursuant to subsection (a)(2) or (a)(4) of this
    section is not made or is made delinquently or if made is not equal to the
    withholding required under this section the state tax commission may treat
    the failure as a failure to file a return and may take administrative and
    judicial actions as authorized by this chapter in the case of a failure to
    file a return. Interest, at the rate provided by section 63-3045,  Idaho
    Code, shall apply to any such underpayment.
    (6)  Commencing in 2006, the state tax commission shall determine whether
    the threshold amounts established by subsection (a)(4) of this section
    must be adjusted to reflect fluctuations in the cost of living. The
    commission shall base its determination on the cumulative effect of the
    annual cost-of-living percentage modifications determined by the United
    States secretary of health and human services pursuant to 42 USC 415(i).
    When the cumulative percentage applied to the monthly threshold amount
    equals or exceeds five thousand dollars ($5,000), the commission shall
    promulgate a rule adjusting the monthly threshold amount by five thousand
    dollars ($5,000) and making the necessary proportional adjustment to the
    annual threshold amount. The rule shall be effective for the next
    succeeding calendar year and each year thereafter until again adjusted by
    the commission. The tax commission shall determine subsequent adjustments
    in the same manner, in each case using the year of the last adjustment as
    the base year.
    (b)  (1) In addition to the payments required pursuant to subsections
    (a)(2) and (a)(4) of this section, every employer shall file a return upon
    such form as shall be prescribed by the state tax commission, but not more
    frequently than annually, or as required pursuant to any agreement between
    the state tax commission and the department of labor under section
    63-3035B, Idaho Code, unless a shorter filing period and due date is
    prescribed by the state tax commission. The return shall be due on the
    last day of the month following the end of the period to which the return
    relates. The return shall show, for the period to which it relates, the
    total amount of wages, salary, bonus or other emolument paid to his
    employees, the amount deducted therefrom in accordance with the provisions
    of the Internal Revenue Code, the amount deducted therefrom in accordance
    with the provisions of this section, the amount of any previous payments
    made pursuant to this section, and such pertinent and necessary
    information as the state tax commission may require.
    (2)  Every employer making a declaration of withholding as provided herein
    shall furnish to the employees annually, but not later than thirty (30)
    days after the end of the calendar year, a record of the amount of tax
    withheld from such employee on forms to be prescribed, prepared and
    furnished by the state tax commission and on or before the last day of
    February every employer shall file a copy thereof with the state tax
    commission. Every employer who is required, under Internal Revenue Code
    section 6011, to file returns on magnetic media, machine readable form or
    electronic means, as defined in the Idaho uniform electronic transaction
    act, may be required by rules of the state tax commission to file
    corresponding state returns on similar magnetic media, machine readable
    form or electronic means. Such rules may provide a different due date for
    such returns which shall be no later than the date employers are required
    to file such returns with the internal revenue service or the social
    security administration.
    (c)  All moneys deducted and withheld by every employer shall immediately
upon such deduction be state money and every employer who deducts and retains
any amount of money under the provisions of this chapter shall hold the same
in trust for the state of Idaho and for the payment thereof to the state tax
commission in the manner and at the times in this chapter provided. Any
employer who does not possess real property situated within the state of
Idaho, which, in the opinion of the state tax commission, is of sufficient
value to cover his probable tax liability, may be required to post a surety
bond in such sum as the state tax commission shall deem adequate to protect
the state.
    (d)  The provisions of this chapter relating to additions to tax in case
of delinquency, and penalties, shall apply to employers subject to the
provisions of this section and for these purposes any amount deducted, or
required to be deducted and remitted to the state tax commission under this
section, shall be considered to be the tax of the employer and with respect to
such amount he shall be considered the taxpayer.
    (e)  Amounts deducted from wages of an employee during any calendar year
in accordance with the provisions of this section shall be considered to be in
part payment of the tax imposed on such employee for his tax year which begins
within such calendar year and the return made by the employer under this
subsection (e) shall be accepted by the state tax commission as evidence in
favor of the employee of the amount so deducted from his wages. Where the
total amount so deducted exceeds the amount of tax on the employee, based on
his Idaho taxable income, or where his income is not taxable under this
chapter, the state tax commission shall, after examining the annual return
filed by the employee in accordance with this chapter, but not later than
sixty (60) days after the filing of each return, refund the amount of the
excess deducted.
    (f)  This section shall in no way relieve any taxpayer from his obligation
of filing a return at the time required under this chapter, and, should the
amount withheld under the provisions of this section be insufficient to pay
the total tax of such taxpayer, such unpaid tax shall be paid at the time
prescribed by section 63-3034, Idaho Code.
    (g)  An employee receiving wages shall on any day be entitled to not more
than, but may claim fewer than, the number of withholding exemptions to which
he is entitled under the Internal Revenue Code for federal income tax
withholding purposes.
    (h)  An employer shall use the exemption certificate filed by the employee
with the employer under the withholding exemption provisions of the Internal
Revenue Code in determining the amount of tax to be withheld from the
employee's wages or salary under this chapter. The tax commission may
redetermine the number of withholding exemptions to which an employee is
entitled under subsection (g) of this section, and the state tax commission
may require such exemption certificate to be filed on a form prescribed by the
commission in any circumstance where the commission finds that the exemption
certificate filed for Internal Revenue Code purposes does not properly reflect
the number of withholding exemptions to which the employee is entitled under
this chapter. In no event shall any employee give an exemption certificate
which claims a higher number of withholding exemptions than the number to
which the employee is entitled by subsection (g) of this section.