A. Any
"professional athletic team" as defined in §
11.5 of this Part which pays
compensation to a nonresident member of a professional athletic team for
services rendered to the team within Rhode Island shall be deemed to be an
"employer" and is required to withhold a portion of such members' compensation
attributable to "duty days" spent in Rhode Island, as defined in §
11.5 of this Part.
B. Every professional athletic team whose
members have played games or performed services in this state (as defined under
"Duty Days") may file an annual composite Rhode Island personal income tax
return on behalf of nonresident team members.
1. The composite return shall contain such
information required by the Tax Administrator including the total income of
each team member, the amount of income subject to tax under the apportionment
formula, and the amount of tax due.
2. The team must obtain approval from the tax
administrator before filing a composite return and it shall obtain written
authorization on a year-to-year basis from each team member who elects to
participate in the composite return.
3. The team must maintain powers of attorney
from participating team members that authorize the team to represent them in
the event of a protest or other appeal; the team and participating team members
must agree that the team is responsible for any deficiencies, including
penalties.
4. To participate in the
composite return, a team member's compensation from the team must be the only
source of income attributable to the state.
a.
The participating team members must acknowledge through their election that the
composite return constitutes an irrevocable filing and that they may not file
an individual income tax return in the taxing state.
5. If the team elects to file a composite
return, it shall be responsible for withholding tax from the compensation of
its members and remitting said tax to this state upon the filing of the
composite return.
6. In filing a
composite return a team member's compensation shall be subject to withholding
at the highest marginal tax rate and no deductions, exemptions or exclusions
shall be permitted.
7. If in the
first year of filing the composite return the team has already withheld and
remitted tax on a team member's compensation, the team may take a credit for
the tax remitted against the initial filing under this method.
C. If a team member leaves the
team during the applicable year, the team remains responsible for remitting the
appropriate tax and may either collect the tax paid from the team member or
absorb the cost itself.
