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:

A.__The member's share of annual entity income sourced to the State is less than $1,000; or

B.__The bureau has determined by rule, ruling or instruction that the member's income is not subject to withholding.

Sec. AA-2. 36 MRSA §5251, as amended by PL 1985, c. 535, §23, is further amended to read:

§5251. Information statement

Every person required to deduct and withhold tax under this Part, or who would have been required so to deduct and withhold tax if an employee had claimed no more than one withholding exemption, shall furnish to each such person in respect to the items of income subject to withholding paid by such person to such person during the calendar year on or before February 15th of the succeeding year, or, in the case of an employee who is terminated before the close of such calendar year, within 30 days from the date on which the last payment of wages is made, a written statement as prescribed by the assessor showing the amount of wages paid by the employer to the employee, or in the case of withholding pursuant to section sections 5250-B and 5255- B the total items of income which that were subject to withholding, the amount deducted and withheld as tax, and such other information as the assessor shall prescribe.