A. Any amounts withheld in accordance with the provisions of Section 2385.30 of this title shall be deemed to be held in trust for the State of Oklahoma, and, as trustee, the pass-through entity shall have a fiduciary duty to the State of Oklahoma in regard to such amounts and shall be subject to the trust laws of this state. Any pass-through entity who fails to pay to the Tax Commission any amounts required to be withheld by such pass-through entity, after such amounts have been withheld from distributions to nonresident members, and appropriates the amount held in trust to the pass-through entity's own use, or to the use of any person not entitled thereto, without authority of law, shall be guilty of embezzlement.

B. If any pass-through entity fails to withhold or pay required estimated payments of the amounts required to be withheld by Section 2385.30 of this title and thereafter income tax is paid by the nonresident member with respect to such payment, the amount so required to be withheld shall not be collected from the pass-through entity, but such pass-through entity shall not be relieved from the liability for penalties or interest otherwise applicable because of such failure to withhold or pay such amount.

C. If a pass-through entity fails to file a return or to pay to the Tax Commission the amounts withheld or any estimated payment required within the time prescribed by Section 2385.30 of this title, there shall be imposed on the pass-through entity a penalty equal to ten percent (10%) of the amount required to be withheld or paid, or ten percent (10%) of the amount of the underpayment of the amount required to be withheld or paid, if such failure is not corrected within fifteen (15) days after the tax becomes delinquent. There shall also be imposed on such pass-through entity interest at the rate of one and one-fourth percent (1 1/4%) per month during the period such underpayment exists. For the purposes of this subsection, "underpayment" shall mean the excess of the amount required to be paid over the amount thereof actually paid on or before the date prescribed therefor. Such penalty and interest shall be added to and become a part of the amount assessed. However, the Tax Commission shall not collect the penalty assessed if the pass-through entity remits the amount required to be withheld within thirty (30) days of the mailing of a proposed assessment or voluntarily pays such amount upon the filing of an amended return.

D. Any pass-through entity who is required under the provisions of subsection E of Section 2385.30 of this title to furnish a statement to a nonresident member, but who willfully fails to furnish such recipient the statement, shall be punished by an administrative fine not exceeding One Thousand Dollars ($1,000.00).

Added by Laws 2003, c. 472, § 25. Amended by Laws 2004, c. 518, § 5, eff. July 1, 2004; Laws 2012, c. 357, § 11, eff. July 1, 2012.