Withholding on dividends: source-state tax limited; reduced withholding for qualifying corporate shareholders, subject to PE exceptions. Dividends may be taxed in the recipient's State of residence, but the source State where the paying company is resident may also tax such dividends subject to capped withholding rates and a reduced rate where the beneficial owner is a company meeting a qualifying uninterrupted ownership threshold. Dividends are broadly defined to include share-like profit participations. If the beneficial owner carries on business through a permanent establishment or performs independent services from a fixed base in the source State and the holding is effectively connected with that nexus, taxation follows the rules for business profits or independent personal services; the source State generally may not tax undistributed profits except as permitted.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Withholding on dividends: source-state tax limited; reduced withholding for qualifying corporate shareholders, subject to PE exceptions.
Dividends may be taxed in the recipient's State of residence, but the source State where the paying company is resident may also tax such dividends subject to capped withholding rates and a reduced rate where the beneficial owner is a company meeting a qualifying uninterrupted ownership threshold. Dividends are broadly defined to include share-like profit participations. If the beneficial owner carries on business through a permanent establishment or performs independent services from a fixed base in the source State and the holding is effectively connected with that nexus, taxation follows the rules for business profits or independent personal services; the source State generally may not tax undistributed profits except as permitted.
Full Summary is available for active users!
Note: It is a system-generated summary and is for quick reference only.
TaxTMI 
of 
Join Channel
TaxTMI 
