Withholding on pass-through entity income of nonresident partners and shareholders

1. Definitions. As used in this section, unless the context otherwise indicates, the following terms have the following meanings. 2. Withholding required. Except as provided by subsection 3 , every pass-through entity that does business in this State must withhold income tax at the highest tax rate provided in this Part on the proportionate quarterly share of Maine source income of each nonresident member. The method for determining the amount of the share of income and for determining the amount of withholding for each nonresident member under this section must be prescribed by rules adopted by the assessor. Rules adopted pursuant to this section are routine technical rules as defined in Title 5, chapter 375, subchapter 2-A . 3. Withholding exemptions. For purposes of this section, a pass-through entity is not required to withhold tax for a nonresident member if: