§ 47-4215. Underpayment of estimated tax by corporations, financial institutions, and unincorporated businesses.
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Current through October 23, 2012
(a) A corporation, financial institution, or unincorporated business shall pay 4 installments of estimated tax as provided in § 47-1812.14 in the amount provided under subsection (b) of this section.
(b)(1) The amount of each installment of estimated tax under subsection (b) of this section shall be the lesser of:
(A) The amount required under the annualized income method under paragraph (2) of this subsection, or
(B) Twenty-five percent of the lesser of:
(i) Ninety percent of the tax shown on the return of the entity for the taxable year (or, if no return is filed, 100% of the tax for the taxable year); or
(ii)(I) Except as provided in sub-sub-subparagraph (II) of this sub-subparagraph, 100% of the tax shown on the return of the entity for the preceding taxable year if the individual filed a return for the preceding taxable year consisting of 12 months.
(II) For tax years beginning after December 31, 2011, 110% of the tax shown on the return of the entity for the preceding taxable year if the individual filed a return for the preceding taxable year consisting of 12 months.
(2)(A) The required payments under the annualized income method shall be, on a cumulative basis, as follows:
(i) On the first installment date, 22.5% of the tax for the taxable year based upon the annualized income of the entity for the first 3 months of the taxable year;
(ii) On the second installment date, 45% of the tax for the taxable year based upon the annualized income of the entity for the first 5 months of the taxable year;
(iii) On the third installment date, 67.5% of the tax for the taxable year based upon the annualized income of the entity for the first 8 months of the taxable year; and
(iv) On the fourth installment date, 90% of the tax for the taxable year based upon the annualized income of the entity for the first 9 months of taxable year.
(B) The annualized income method shall not apply to entities filing a return for part of a taxable year except under regulations as the Mayor may prescribe.
(c)(1) Except as otherwise provided in this section, in the case of an underpayment of estimated tax by a corporation, financial institution, or unincorporated business, there shall be added to the tax imposed under Chapter 18 of this title an amount determined by applying the underpayment rate set forth in § 47-4201 to the amount of the underpayment for the period of the underpayment.
(2) For purposes of this subsection:
(A) The amount of the underpayment shall be the excess of (i) the required installment, over (ii) the amount, if any, of the installment paid on or before the due date for the installment.
(B) The period of the underpayment shall run from the due date for the installment to the earlier of (i) the 15th day of the 3rd month following the close of the taxable year, or (ii) the date on which the amount of the underpayment is made; provided, that an underpayment which is unpaid during part of a month shall be considered to be paid at the end of the month.
(d) For purposes of this section:
(1) A payment of estimated tax shall be credited against unpaid required installments in the order in which the installments are required to be paid.
(2) The term "tax" means the tax imposed by § 47-1807.02 or § 47-1808.03, less the amount of credit allowed against the tax (other than the credit with respect to payments of tax).
(3) The amount of a refund of a prior year's tax applied against the tax during the taxable year shall be deemed a payment of estimated tax.
(e) An addition to tax shall not be imposed under subsection (c) of this section for a taxable year if:
(1) The tax shown on the return for the taxable year (or, if no return is filed, the tax) reduced by applicable credits and estimated payments which are made timely, is less than $1,000; or
(2)(A) The preceding taxable year was a taxable year of 12 months; and
(B) The entity did not have any liability for tax for the preceding taxable year.
(June 9, 2001, D.C. Law 13-305, § 403(b), 48 DCR 334; Apr. 4, 2003, D.C. Law 14-282, § 11(yy), 50 DCR 896; Sept. 14, 2011, D.C. Law 19-21, § 8062(b), 58 DCR 6226.)
HISTORICAL AND STATUTORY NOTES
Effect of Amendments
D.C. Law 14-282 rewrote subsec. (e)(1) which had read as follows:
"(1) The tax shown on the return for the taxable year (or, if no return is filed, the tax) reduced by applicable credits and estimated payments which are made timely, is less than $100; or"
D.C. Law 19-21 rewrote subsec. (b)(1)(B)(ii), which formerly read:
"(ii) One hundred percent of the tax shown on the return of the entity for the preceding taxable year if the individual filed a return for the preceding taxable year consisting of 12 months."
Temporary Amendments of Section
For temporary (225 day) amendment of section, see § 12(hhh) of Tax Clarity and Recorder of Deeds Temporary Act of 2002 (D.C. Law 14-191, October 5, 2002, law notification 49 DCR 9549).
For temporary (225 day) amendment of section, see § 12(hhh) of Tax Clarity and Related Amendments Temporary Act of 2003 (D.C. Law 14-228, March 23, 2003, law notification 50 DCR 2741).
Emergency Act Amendments
For temporary (90 day) amendment of section, see § 12(ggg) of Tax Clarity and Recorder of Deeds Emergency Act of 2002 (D.C. Act 14-381, June 6, 2002, 49 DCR 5674).
For temporary (90 day) amendment of section, see § 12(hhh) of Tax Clarity and Related Amendments Emergency Act of 2002 (D.C. Act 14-456, July 23, 2002, 49 DCR 8107).
For temporary (90 day) amendment of section, see § 12(hhh) of Tax Clarity and Related Amendments Congressional Review Emergency Act of 2002 (D.C. Act 14-510, October 23, 2002, 49 DCR 10247).
For temporary (90 day) addition, see § 2 of Self-Assessing Taxpayer Fairness in Notice Emergency Act of 2005 (D.C. Act 16-241, December 22, 2005, 53 DCR 262).
For temporary (90 day) amendment of section, see § 2 of Self-Assessing Taxpayer Fairness in Notice Emergency Act of 2005 (D.C. Act 16-241, December 22, 2005, 53 DCR 262).
Legislative History of Laws
For Law 13-305, see notes under § 47-4201.
For Law 14-282, see notes following § 47-902.
For history of Law 19-21, see notes under § 47-305.02.
