Comments on: L3C: Does Connecticut Have One? http://www.courantalumni.org/2009/10/27/l3c-does-connecticut-have-one/ Where The Latest On Former Hartford Courant Employees Can Be Found Fri, 10 Feb 2012 00:18:23 +0000 hourly 1 http://wordpress.org/?v=3.0 By: Rick Zwetsch http://www.courantalumni.org/2009/10/27/l3c-does-connecticut-have-one/comment-page-1/#comment-5266 Rick Zwetsch Wed, 04 Jan 2012 16:50:24 +0000 http://www.courantalumni.org/?p=3674#comment-5266 James & Paul, It's a great question! First, my quick disclaimer that we are not attorneys and we are not tax advisers... Where taxes are owed and paid and what taxes are owed and paid will depend on several factors and may best be explained with a quick example. interSector Partners, L3C was organized in Vermont and we operate our business in Colorado. Colorado has not passed L3C legislation, the same as Connecticut has not passed L3C legislation. L3Cs organized as “domestic” L3Cs in any of the 9 states that have passed L3C legislation can operate in all 50 states. Most likely a business will be required to register as a "foreign entity" if operating in a state that has not passed L3C law. interSector Partners is an education and consulting firm and we do not sell anything at the retail level. Therefore we do not collect sales tax. We are considered a partnership in the eyes of the IRS and file a Form 1065 Partnership return with the IRS each year with the corresponding K-1s being distributed to our two managing members. These K-1s pass through to our individual tax returns. We therefore pay federal tax and income tax in the State of Colorado. We do not conduct business in Vermont so while we do file an annual tax return/form in Vermont – that return shows zero revenue and therefore zero tax due. Hopefully this is helpful, please let me know if you have additional questions or need further clarification. Rick Zwetsch, Principal Partner interSector Partners, L3C L3C #39 in the US | L3C #1 in Colorado James & Paul,

It’s a great question! First, my quick disclaimer that we are not attorneys and we are not tax advisers… Where taxes are owed and paid and what taxes are owed and paid will depend on several factors and may best be explained with a quick example.

interSector Partners, L3C was organized in Vermont and we operate our business in Colorado. Colorado has not passed L3C legislation, the same as Connecticut has not passed L3C legislation. L3Cs organized as “domestic” L3Cs in any of the 9 states that have passed L3C legislation can operate in all 50 states. Most likely a business will be required to register as a “foreign entity” if operating in a state that has not passed L3C law.

interSector Partners is an education and consulting firm and we do not sell anything at the retail level. Therefore we do not collect sales tax.

We are considered a partnership in the eyes of the IRS and file a Form 1065 Partnership return with the IRS each year with the corresponding K-1s being distributed to our two managing members. These K-1s pass through to our individual tax returns. We therefore pay federal tax and income tax in the State of Colorado. We do not conduct business in Vermont so while we do file an annual tax return/form in Vermont – that return shows zero revenue and therefore zero tax due.

Hopefully this is helpful, please let me know if you have additional questions or need further clarification.

Rick Zwetsch, Principal Partner
interSector Partners, L3C
L3C #39 in the US | L3C #1 in Colorado

]]> By: Paul Stern http://www.courantalumni.org/2009/10/27/l3c-does-connecticut-have-one/comment-page-1/#comment-5265 Paul Stern Wed, 04 Jan 2012 15:12:57 +0000 http://www.courantalumni.org/?p=3674#comment-5265 I've forwarded your question to <a href="mailto:rickz@interSectorL3C. com" rel="nofollow">Rick Zwetsch of interSector Partners, L3C</a>. I suspect the answer is not simple however, since it would depend on what kind of taxes you are talking about, and whether the organization owes them. . I’ve forwarded your question to Rick Zwetsch of interSector Partners, L3C. I suspect the answer is not simple however, since it would depend on what kind of taxes you are talking about, and whether the organization owes them. .

]]> By: James Worde http://www.courantalumni.org/2009/10/27/l3c-does-connecticut-have-one/comment-page-1/#comment-5264 James Worde Wed, 04 Jan 2012 14:54:19 +0000 http://www.courantalumni.org/?p=3674#comment-5264 If an L3C is organized in another state but operated in Connecticut, does that organizing state collect the taxes that are owed, or does the State of Connecticut? If an L3C is organized in another state but operated in Connecticut, does that organizing state collect the taxes that are owed, or does the State of Connecticut?

]]> By: Rick Zwetsch http://www.courantalumni.org/2009/10/27/l3c-does-connecticut-have-one/comment-page-1/#comment-1749 Rick Zwetsch Thu, 29 Oct 2009 16:10:24 +0000 http://www.courantalumni.org/?p=3674#comment-1749 You can organize an L3C (low-profit limited liability company - not a corporation) in Vermont, Michigan, Wyoming and Utah today and in Illinois starting January 1, 2010. You can operate an L3C organized in any of those states in Connecticut as the L3C is recognized in all 50 states. This is just like forming a corporation in Delaware or Nevada and operating that corporation in Connecticut. Please let us know if we can provide further information. Rick Zwetsch Principal Partner interSector Partners, L3C www.interSectorL3C.com/l3c101.html You can organize an L3C (low-profit limited liability company – not a corporation) in Vermont, Michigan, Wyoming and Utah today and in Illinois starting January 1, 2010. You can operate an L3C organized in any of those states in Connecticut as the L3C is recognized in all 50 states. This is just like forming a corporation in Delaware or Nevada and operating that corporation in Connecticut.

Please let us know if we can provide further information.

Rick Zwetsch
Principal Partner
interSector Partners, L3C
http://www.interSectorL3C.com/l3c101.html

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