BASES OF STATE INCOME TAXATION OF NONGRANTOR TRUSTS Richard W. Nenno, Esquire Wilmington Company Rodney Square North 1100 North Market Street Wilmington, Delaware 19890-0001 Tel: (302) 651-8113 Fax: (302) 427-4656 rnenno@wilmingtontrust.com April 17, 2012 This document is not designed or intended to provide financial, tax, legal, accounting, or other professional advice because such advice always requires consideration of individual circumstances. If professional advice is needed, the services of a professional advisor should be sought. This document is for informational purposes only; it is not intended as a recommendation, offer, or solicitation with respect to the purchase or sale of any security. 2012 Wilmington Corporation. All rights reserved. Reprinted with permission.
Bases of State Income Taxation of Nongrantor s Created by ee Alabama Ala. Code 40-18-1, 40-18- 2, 40-18-5, 40-18-25; Ala. Admin. Code r. 810-3-25-.10 810-3-25-.12, 810-3-25-.14; instructions to 2011 Ala. Form 41 at 2, 3. 5.00% on $3,000 1 1 www.revenue.alabama.gov Alaska No income tax imposed on trusts. Arizona Ariz. Rev. Stat. 43-304(4), (5), 43-1001(2), (11), 43-1011(5)(a), 43-1091, 43-1301(2), (3), (5), 43-1311, 43-1331, 43-1332; instructions to 2011 Ariz. Form 141AZ at 1, 2, 12. 4.54% on $150,000 www.azdor.gov Arkansas Ark. Code Ann. 26-51-201 26-51-203, 26-51-406; Ark. Inc. Tax. Reg. 4.26-51-102, 9.26-51-102; instructions to 2011 Ark. AR1002 at 1; 2011 Tax Tables at 6. 7.00% on $49,999 2 2 www.dfa.arkansas.gov
Bases of State Income Taxation of Nongrantor s Created by ee California Cal. Rev. & Tax. Code 17006, 17014, 17015, 17041(a), (b), (e), (h), (i), 17043(a), 17301, 17731, 17742 17745, 17951, 18505, 19136; Cal. Code Regs. tit. 18, 17743 17744; instructions to 2011 Cal. Form 541 at 2, 3, 5, 10, 14. 10.30% on $1 million www.ftb.ca.gov Colorado Connecticut Colo. Rev. Stat. 39-22-103(10), 39-22- 104(1.7), 39-22-401, 39-22- 403, 39-22-404, 39-22-601(4); instructions to 2011 Colo. Form 105 at 3, 4; 2011 Colo. Form 105 at 1. Conn. Gen. Stat. 12-700(a)(8)(E), (a)(9),(d), 12-700a, 12-701(a)(4)(C), (D), (5), (8), (9), (19), (20), 12-713, 12-714, 12-719(a), 12-722(n); Conn. Agencies Regs. 12-701(a)(4)-1, 12-701(a)(9)-1, 12-713(a)-1, 12-713(a)-4, 12-714(a)-1, 12-701(a)(11)-1; instructions to 2011 Form CT- 1041 at 4 6, 9; 2011 Form CT-1041 at 1. 4.63% www.taxcolorado.com 6.70% 3 www.ct.gov/drs
Bases of State Income Taxation of Nongrantor s Created by ee Delaware 30 Del. C. 1102(a)(12), (13), 1105, 1169, 1170, 1601(5), (8), (9), 1605(b), 1631, 1632, 1635, 1636, 1639; 2011 Del. Form 400-I at 1, 2; 2011 Del. Form 400 at 2. 6.95% on $60,000 4 4 4 www.revenue.delaware.gov District of Columbia D.C. Code 47-1803.01, 47-1803.02(a), 47-1805.02(2)(D), 47-1806.01, 47-1806.03(a)(7), 47-1809.01, 47-1809.02, 47-1809.03, 47-1809.04, 47-1809.05(1) (2), 47-1809.08, 47-1809.09; instructions to 2011 D.C. Form D-41 at 3, 4; 2011 D.C. Form D-41 at 2. 8.50% on $40,000 otr.cfo.dc.gov Florida No income tax imposed on trusts; Florida intangible personal property tax repealed for 2007 and later years. Georgia O.C.G.A. 48-7-20(a), (b)(1), (d), 48-7-22(a), (b), 48-7-27(a), 48-7- 114(e); Ga. Comp. R. & Regs. r. 560-7-3-.07(1) (5); instructions to 2011 Ga. Form 501 at 2. 6.00% on $7,000 www.etax.dor.ga.gov
Bases of State Income Taxation of Nongrantor s Hawaii Haw. Rev. Stat. 235-1, 235-2.3, 235-4, 235-4.5, 235-51(d); Haw. Admin. Rules 18-235-1.17; instructions to 2011 Haw. Form N-40 at 1, 2-3, 11. 8.25% on $40,000 Created by ee 4 4 www.hawaii.gov/tax Idaho Idaho Code 63-3011B, 63-3011C, 63-3024(a); Idaho Admin. Code Regs. 35.01.01.035, 35.01.01.075(e), 35.01.01.261; instructions to 2011 Idaho Form 66 at 1, 2, 10. 7.80% on $26,760 5 5 5 5 www.tax.idaho.gov
Illinois 35 Ill. Comp. Stat. 5/201(a), (b)(5), (c), (d), 202, 203(c), 301(a), (c), 803(a), 1501(a)(14), (a)(20)(c) (D); Ill. Admin. Code tit. 86, 100.2050, 100.3000, 100.3010, 100.3020(a); instructions to 2011 IL-1041 at 1, 2, 4 5; 2011 IL-1041 at 2, 3; 2011 Schedule NR. Bases of State Income Taxation of Nongrantor s Created by ee 6.50% www.tax.illinois.gov Indiana Ind. Code 6-3-1-3.5(a), (e), 6-3-1-12(d), 6-3-1-13, 6-3-1-14, 6-3-2-1(a), 6-3-4-4.1; Ind. Admin. Code tit. 45, r. 3.1-1-1, r. 3.1-1-10, r. 3.1-1- 12, r. 3.1-1-21(d), r. 3.1-1-25, r. 3.1-1-91; instructions to 2011 Ind. Form IT-41 at 1, 2, 3, 4, 6. 3.40% www.in.gov/dor
Bases of State Income Taxation of Nongrantor s Iowa Iowa Code 422.4 422.7, 422.9; Iowa Admin. Code r. 701-89.3(422); instructions to 2011 Iowa Form IA 1041 at 1; 2011 Iowa Form IA 1041 at 2. 8.98% on $64,755 Created by ee 5 5 5 www.state.ia.us/tax Kansas Kan. Stat. Ann. 79-32,109(d), 79-32,110(a)(2), (d), 79-32,134; instructions to 2011 Kan. Form K-41 at 2; 2011 Kan. Form K-41 at 4. 6.45% on $30,000 www.ksrevenue.org Kentucky Ky. Rev. Stat. Ann. 141.010(9) (11), 141.020, 141.030(1); 103 Ky. Admin. Regs. 19:010; instructions to 2011 Ky. Form 741 at 1, 2. 6.00% on $75,000 revenue.ky.gov Louisiana La. Rev. Stat. Ann. 47:181 47:182, 47:187, 47:300.1 47:300.3, 47:300.6, 47:300.10(3); instructions to 2011 La. Form IT-541 at 5. 6.00% on $50,000 6 www.revenue.louisiana.gov
Bases of State Income Taxation of Nongrantor s Created by ee Maine Me. Rev. Stat. Ann. tit. 36, 5102(1-C)(A), (4)(B) (C), 5111, 5121, 5160, 5403; instructions to 2011 Form 1041ME at 1, 2. 8.50% on $19,950 www.maine.gov/revenue Maryland Md. Code Ann., Tax Gen. 10-101(d), (e), (g), (i), (j), (k), (n), 10-102, 10-103(a)(3), 10-105(a)(1), (d), 10-106(a)(1)(iii), 10-106.1, 10-201, 10-212, 10-601, 10-604, 10-901, 10-902; instructions to 2011 Md. Form 504 at 1, 3, 4. 5.50% (plus county tax between 1.25% and 3.20%) on $500,000 www.marylandtaxes.com Massachusetts Mass. Gen. Laws ch. 62, 4, 5A, 10; Mass. Gen. Laws ch. 62B, 13; Mass. Gen. Laws ch. 62C, 6; Mass Regs. Code tit. 830, 62.10.1(1), (2); instructions to 2011 Mass. Form 2 at 3, 4 6, 8, 9, 11, 41, 47; 2011 Mass. Form 2 at 2. 5.30% (12.00% for short-term gains and gains on sales of collectibles) 4 4, 7 www.mass.gov/dor
Bases of State Income Taxation of Nongrantor s Created by ee Michigan Mich. Comp. Laws 206.14(3), 206.16, 206.18(1)(c), 206.36(1), 206.51(1)(g), (6), 206.110, 206.301; instructions to 2011 MI-1041 at 2 3, 15; 2011 MI-1041 at 1. 4.35% 8 www.michigan.gov/taxes Minnesota Minn. Stat. 289A Subd. 2(a), 289A.25 Subd. 1, 290.01 Subd. 7b, Subd. 19, Subd. 29, 290.014 Subd.1, Subd. 3, 290.03(3), 290.06 Subd. 2c, Subd. 2d, 290.17, 290.191, 290.20, 290.22; instructions to 2011 Minn. Form M2 at 1, 2, 13. 7.85% on $75,000 9 9 10 www.taxes.state.mn.us Mississippi Miss. Code Ann. 27-7- 5(1), 27-7-27; instructions to 2011 Miss. Form 81-110 at 1; 2011 Miss. Form 81-110 at 1. 5.00% on $10,000 www.dor.ms.gov Missouri RSMo 143.011, 143.061, 143.091, 143.111, 143.121, 143.311, 143.331(2) (3), 143.341, 143.371, 143.381, 143.391, 143.501; instructions to 2011 Form MO-1041 at 1, 7. 6.00% on $9,000 11 11 www.dor.mo.gov/tax
Bases of State Income Taxation of Nongrantor s Created by ee Montana Mont. Code Ann. 15-30- 2101(32) (33), 15-30-2103, 15-30-2110, 15-30-2151, 15-30-2153; instructions to 2011 Mont. Form FID-3 at 3, 14, 16, 17; 2011 Mont. Form FID-3 at 2. 6.90% on $16,000 revenue.mt.gov Nebraska Neb. Rev. Stat. 77-2714.01(6), 77-2715, 77-2715.02, 77-2716, 77-2717; Neb. Admin. Code tit. 316, Ch. 23, REG-23-001, REG-23-004; instructions to 2011 Neb. Form 1041N at 6, 7, 8. 6.84% on $15,150 www.revenue.ne.gov Nevada No income tax imposed on trusts. New Hampshire N.H. Rev. Stat. Ann. 77:1, 77:3, 77:4, 77:4-c, 77:10 77:12, 77:18; N.H. Code Admin. R. Ann. 902.07, 905.02; instructions to 2011 N.H. Form DP-10 at 1, 3, 5, 8. 5.00% (interest and dividends only) 4 www.nh.gov/revenue
Bases of State Income Taxation of Nongrantor s Created by ee New Jersey NJSA 54A:1-2(d), (o)(2) (3), (p), 54A:2-1(b)(5), 54A:2-1.1, 54A:5-1, 54A:5-3, 54A:5-7, 54A:5-8, 54A:8-3.1, 54A:8-4(m); instructions to 2011 Form NJ-1041 at 1 2, 4, 7, 23. 8.97% on $500,000 12 12 www.state.nj.us/treasury/ taxation/ New Mexico N.M. Stat. Ann. 7-2-2 7-2- 3, 7-2-7(C); instructions to 2011 N.M. Form F1D-1 at 1, 3. 4.90% on $16,000 www.tax.newmexico.gov New York State N.Y. Tax Law 601(c) (1-a), 605(b)(3) (4), 611 612, 618, 631, 633, 651, 685(c)(6); N.Y. Comp. Codes R. & Regs. tit. 20, 105.23, 118.1; instructions to 2011 N.Y. Form IT-205 at 1, 2, 5, 6, 7, 10, 23. 8.97% on $500,000 12 12 www.nystax.gov New York City N.Y. Tax Law 1301 1306; Admin. Code City of N.Y. 11-1704.1, 11-1705, 11-1711, 11-1712, 11-1718, 11-1719, 11-1721; instructions to 2011 N.Y. Form IT-205 at 23. 3.876% on $500,000 12 12 www.nystax.gov
Bases of State Income Taxation of Nongrantor s Created by ee North Carolina N.C. Gen. Stat. 105-134.1(10), 105-134.2(a)(3), 105-134.5, 105-160.2, 105-160.5; N.C. Admin. Code tit. 17, r. 6B.3716, 6B.3718; instructions to 2011 N.C. Form D-407 at 1; 2011 N.C. Form D-407 at 2. 7.75% on $60,000 www.dor.state.nc.us North Dakota N.D. Cent. Code 57-38- 01(12), 57-38-07, 57-38- 30.3(1)(e); 57-38-31; N.D. Admin. Code 81-03-02.1-04; instructions to 2011 N.D. Form 38 at 2; 2011 N.D. Form 38 at 2. 3.99% on $11,350 www.nd.gov/tax Ohio Ohio Rev. Code Ann. 5747.01(A), (I)(3), (S), 5747.02(A)(6), (D), 5747.09; instructions to 2011 Ohio Form IT 1041 at 3 5, 11 12. 5.925% on $204,200 4 www.tax.ohio.gov
Bases of State Income Taxation of Nongrantor s Oklahoma Okla. Stat. tit. 68, 2353(6), (10), (12), 2355(B), (F); Okla. Admin. Code 710:50-23- 1(c); instructions to 2011 Okla. Form 513 at 2, 4, 14. 5.50% on $81,000 Created by ee www.tax.ok.gov Oregon Or. Rev. Stat. 316.022(6), 316.037(1), 316.267, 316.282(1)(d), (2); Or. Admin. R. 150-316.282(3); instructions to 2011 Or. Form 41 at 1, 2; 2011 Or. Form 41 at 2. 11.00% on $250,000 www.oregon.gov/dor Pennsylvania 72 P.S. 7301(j), (k), (n), (s), 7302, 7303, 7305, 7325, 7326, 7330, 7331; 61 Pa. Code 101.1, 101.8, 105.1, 105.2, 105.3, 105.4, 115.2, 115.9, 117.5; instructions to 2011 Form PA-41 at 1, 3, 4, 5, 7, 8; 2011 Form PA-41 at 1. 3.07% www.revenue.state.pa.us Rhode Island R.I. Gen. Laws 44-30-1(a), (e), 44-30-2(a)(1), (b), 44-30- 2.6, 44-30-5(c); R.I. Code R. PIT. 90-13; instructions to 2011 Form RI-1041 at 1-1, 1-2; 2011 RI-1041 Tax Schedules at 1. 5.99% on $7,022 4 4 www.tax.ri.gov
Bases of State Income Taxation of Nongrantor s South Carolina S.C. Code Ann. 12-6- 30(5), 12-6-510(A), 12-6-520, 12-6-570, 12-6-610, 12-6-620, 12-6-1720, 12-6-3910, 12-6- 4910, 12-6-4930; instructions to 2011 Form SC1041 at 1, 2, 3. 7.00% on $13,700 Created by ee www.sctax.org South Dakota No income tax imposed on trusts. Tennessee Tenn. Code Ann. 67-2- 102, 67-2-107, 67-2-110, 67-2-111; instructions to 2011 Tenn. Form INC. 250 at 1, 3, 4. 6.00% (interest and dividends only) www.tn.gov/revenue Texas No income tax imposed on trusts. Utah Utah Code Ann. 59-10- 103(1)(a)(ii), (r), (w)(iv), 59-10-104(2)(b), 59-10-201, 59-10-201.1, 59-10-202(2)(b), 59-10-204, 59-10-205, 59-10- 207, 59-10-209.1, 59-10-210, 59-10-504, 75-7-103(1)(i); instructions to 2011 UT Form TC-41 at 1, 2, 4. 5.00% 13 13, 14 www.tax.utah.gov
Bases of State Income Taxation of Nongrantor s Created by ee Vermont 32 V.S.A. 5811(11)(B), 5822(a), (a)(5), (b)(2); instructions to 2011 Vt. Form FI-161 at 1, 2. 8.95% on $11,350 www.state.vt.us/tax Virginia Va. Code Ann. 58.1-302, 58.1-320, 58.1-322(A), 58.1-360 58.1-362, 58.1-381, 58.1-490(M), 58.1-491; 23 Va. Admin. Code 10-115-10, 10-115-40, 10-115-50, 10-115-60, 10-115-110, 10-115- 140, 10-115-145, 10-115-150; instructions to 2011 Va. Form 770 at 1, 2, 6. 5.75% on $17,000 www.tax.virginia.gov. Washington No income tax imposed on trusts. West Virginia W. Va. Code 11-21-3, 11-21-4e(a), 11-21-7(c), 11-21- 11 11-21-12, 11-21-18; W. Va. Code St. R. 110-21- 7(7.3); instructions to 2011 W. Va. Form IT-141 at 2, 7, 10. 6.50% on $60,000 www.wvtax.gov
Bases of State Income Taxation of Nongrantor s Created by ee Wisconsin Wis. Stat. 71.02(1), 71.04(1), (4), 71.06(1p), (2e)(b), 71.09(2), 71.122, 71.125(1), 71.14(2), (3), (3m), 71.16, 71.17(4); instructions to 2011 Wis. Form 2 at 1 2, 7, 19. 7.75% on $224,210 15 16 www.revenue.wi.gov Wyoming No income tax imposed on trusts. 1 Provided that trust has resident fiduciary or current beneficiary. 2. Provided that trust has resident trustee. 3 Provided that trust has resident noncontingent beneficiary. 4 Provided that trust has resident beneficiary. 5 Provided that other requirements are met. 6 Unless trust designates governing law other than Louisiana. 7 Provided that trust has Massachusetts trustee. 8 Unless trustees, beneficiaries, and administration are outside Michigan. 9 Post-1995 trusts only. 10 Pre-1996 trusts only. 11 Provided that trust has resident income beneficiary on last day of year. 12 Unless trustees and trust assets are outside state and no source income; trustee should file informational return. 13 Post-2003 irrevocable resident nongrantor trust having Utah corporate trustee may deduct all nonsource income but must file Utah return if must file federal return. 14 Inter vivos trusts only. 15 s created or first administered in Wisconsin after October 28, 1999, only. 16 Irrevocable inter vivos trusts administered in Wisconsin before October 29, 1999, only. 1/12