North Dakota Governor Jack Dalrymple signed into law H.B. 1106. One change (among the many) made by this legislation is to impose a special joint and several liability on general partners of a Limited Liability Limited Partnership (LLLP) who are responsible for the preparation of tax returns or payment of tax. If the LLLP fails to file the required returns or pay the taxes due, the general partners charged with such responsibilities will be personally liable. The general partner’s liability is not merely limited to taxes, but also extends to any penalties and interest related to such taxes. Additionally, dissolution of the LLLP does not relieve such general partners of their liability.
Fortunately, the general partners responsible for tax obligations can avoid such liability by electing not to be personally liable. If the general partners make such an election, the LLLP must make a cash deposit or post with the state’s tax commissioner a bond executed by an authorized surety company. The amount of such cash deposit or surety bond must be equal to the estimated annual tax liability of the LLLP.
Click here to read H.B. 1106.