Chapter 807: COMPUTATION OF TAXABLE INCOME OF NONRESIDENT INDIVIDUALS
§5142. Adjusted gross income from sources in this State
1. General. A tax is imposed for each taxable year on the Maine adjusted gross income of every nonresident individual. The amount of the tax equals the tax computed under section 5111 and chapter 805, as if the nonresident were a resident, multiplied by the ratio of the individual's Maine adjusted gross income, as defined in section 5102, subsection 1-C, paragraph B, to the nonresident's entire federal adjusted gross income, as modified by section 5122. The Maine adjusted gross income of a nonresident individual derived from or connected with sources in this State is the sum of the following:
A. The net amount of items of income, gain, loss, and deduction entering into the nonresident individual's federal adjusted gross income that are derived from or connected with sources in this State including (i) the individual's distributive share of partnership or limited liability company income and deductions determined under section 5192, (ii) the individual's share of estate or trust income and deductions determined under section 5176, and (iii) the individual's pro rata share of the income of an S corporation derived from or connected with sources in this State; and [2005, c. 12, Pt. LLLL, §1 (AMD).]
B. The portion of the modifications described in section 5122, subsections 1 and 2 that relates to income derived from or connected with sources in this State, including any modifications attributable to the nonresident individual as a partner of a partnership, shareholder of an S corporation, member of a limited liability company or beneficiary of an estate or trust. [2005, c. 12, Pt. LLLL, §1 (AMD).]
C. [2005, c. 12, Pt. LLLL, §1 (RP).]
[ 2009, c. 434, §71 (AMD); 2009, c. 434, §85 (AFF) .]
2. Attribution. Items of income, gain, loss, and deduction derived from or connected with sources within this State are those items attributable to:
A. The ownership or disposition of any interest in real or tangible personal property in this State; [2005, c. 12, Pt. LLLL, §2 (AMD).]
B. A business, trade, profession or occupation carried on in this State; and [2005, c. 12, Pt. LLLL, §2 (AMD).]
C. Proceeds from any gambling activity conducted in this State or lottery tickets purchased in this State, including payments received from a 3rd party for the transfer of the rights to future proceeds related to any gambling activity or lottery tickets. [2005, c. 332, §20 (AMD).]
[ 2005, c. 12, Pt. LLLL, §2 (AMD); 2005, c. 332, §20 (AMD) .]
3. Intangibles. Income from intangible personal property including annuities, dividends, interest and gains from the disposition of intangible personal property, shall constitute income derived from sources within this State only to the extent that such income is from property employed in a business, trade, profession, or occupation carried on in this State.
[ P&SL 1969, c. 154, §F (NEW) .]
3-A. Gain or loss on sale of partnership interest. Notwithstanding subsection 3, the gain or loss on the sale of a partnership interest is sourced to this State in an amount equal to the gain or loss multiplied by the ratio obtained by dividing the original cost of partnership tangible property located in Maine by the original cost of partnership tangible property everywhere, determined at the time of the sale. Tangible property includes property owned or rented and is valued in accordance with section 5211, subsection 10. If more than 50% of the value of the partnership's assets consist of intangible property, gain or loss from the sale of the partnership interest is sourced to this State in accordance with the sales factor of the partnership for its first full tax period immediately preceding the tax period of the partnership during which the partnership interest was sold. For purposes of this subsection, the sales factor of a partnership is determined in accordance with section 5211, subsections 14, 15 and 16-A. This subsection does not apply to the sale of a limited partner's interest in an investment partnership where more than 80% of the value of the partnership's total assets consists of intangible personal property held for investment, except that such property cannot include an interest in a partnership unless that partnership is itself an investment partnership.
If the apportionment provisions of this section do not fairly represent the extent of the partnership's business activity in this State, the taxpayer may petition for, or the State Tax Assessor may require, in respect to all or any part of the partnership's business activity the employment of any other method to effectuate an equitable apportionment to this State of the partner's income from the sale of the partnership interest.
[ 2007, c. 627, §83 (AMD) .]
4. Deductions for losses. Deductions with respect to capital losses, net long-term capital gains, and net operating losses shall be based solely on income, gains, losses and deductions derived from or connected with sources in this State, under regulations to be prescribed by the assessor but otherwise shall be determined in the same manner as the corresponding federal deductions.
[ P&SL 1969, c. 154, §F (NEW) .]
5. Small business corporation.
[ 1981, c. 706, §38 (RP) .]
6. Apportionment. If a business, trade, profession or occupation is carried on partly within and partly without this State, the items of income and deduction derived from or connected with sources within this State shall be determined as apportioned to this State under chapter 821 or in the case of the rendering of purely personal services by an individual under regulations to be prescribed by the assessor.
[ 1987, c. 841, §3 (AMD) .]
7. Service in Armed Forces. Compensation paid by the United States for service in the Armed Forces of the United States performed by a nonresident shall not constitute income derived from sources within this State.
[ P&SL 1969, c. 154, §F (NEW) .]
8. Minimum taxability threshold.
[ 2005, c. 332, §21 (RP); 2005, c. 332, §30 (AFF) .]
8-A. Minimum taxability threshold. Minimum taxability thresholds for nonresidents are as follows.
A. Compensation received during any taxable year after 2003 for personal services performed in this State as an employee prior to January 1, 2004 is Maine-source income subject to taxation under this Part if the nonresident taxpayer is present in the State performing the personal services for more than 10 days during that taxable year. [2005, c. 332, §22 (NEW); 2005, c. 332, §30 (AFF).]
B. Compensation received during any taxable year after 2003 for personal services performed in this State as an employee after December 31, 2003 is Maine-source income subject to taxation under this Part if the nonresident taxpayer was present in the State performing personal services for more than 10 days during the year in which the personal services were performed. [2005, c. 332, §22 (NEW); 2005, c. 332, §30 (AFF).]
[ 2005, c. 332, §22 (NEW); 2005, c. 332, §30 (AFF) .]
SECTION HISTORY
P&SL 1969, c. 154, §F1 (NEW). 1981, c. 706, §§37,38 (AMD). 1987, c. 841, §3 (AMD). 1993, c. 478, §1 (AMD). 1999, c. 521, §B11 (AFF). 1999, c. 521, §B2 (AMD). 2003, c. 391, §6 (AMD). 2003, c. 673, §E1 (AMD). 2003, c. 673, §E3 (AFF). 2005, c. 12, §§LLLL1,2,MM MM1 (AMD). 2005, c. 12, §MMMM3 (AFF). 2005, c. 332, §§20-22 (AMD). 2005, c. 332, §30 (AFF). 2007, c. 240, Pt. V, §1 (AMD). 2007, c. 627, §83 (AMD). 2009, c. 434, §71 (AMD). 2009, c. 434, §85 (AFF).
Chapter 807: COMPUTATION OF TAXABLE INCOME OF NONRESIDENT INDIVIDUALS
§5142. Adjusted gross income from sources in this State
1. General. A tax is imposed for each taxable year on the Maine adjusted gross income of every nonresident individual. The amount of the tax equals the tax computed under section 5111 and chapter 805, as if the nonresident were a resident, multiplied by the ratio of the individual's Maine adjusted gross income, as defined in section 5102, subsection 1-C, paragraph B, to the nonresident's entire federal adjusted gross income, as modified by section 5122. The Maine adjusted gross income of a nonresident individual derived from or connected with sources in this State is the sum of the following:
A. The net amount of items of income, gain, loss, and deduction entering into the nonresident individual's federal adjusted gross income that are derived from or connected with sources in this State including (i) the individual's distributive share of partnership or limited liability company income and deductions determined under section 5192, (ii) the individual's share of estate or trust income and deductions determined under section 5176, and (iii) the individual's pro rata share of the income of an S corporation derived from or connected with sources in this State; and [2005, c. 12, Pt. LLLL, §1 (AMD).]
B. The portion of the modifications described in section 5122, subsections 1 and 2 that relates to income derived from or connected with sources in this State, including any modifications attributable to the nonresident individual as a partner of a partnership, shareholder of an S corporation, member of a limited liability company or beneficiary of an estate or trust. [2005, c. 12, Pt. LLLL, §1 (AMD).]
C. [2005, c. 12, Pt. LLLL, §1 (RP).]
[ 2009, c. 434, §71 (AMD); 2009, c. 434, §85 (AFF) .]
2. Attribution. Items of income, gain, loss, and deduction derived from or connected with sources within this State are those items attributable to:
A. The ownership or disposition of any interest in real or tangible personal property in this State; [2005, c. 12, Pt. LLLL, §2 (AMD).]
B. A business, trade, profession or occupation carried on in this State; and [2005, c. 12, Pt. LLLL, §2 (AMD).]
C. Proceeds from any gambling activity conducted in this State or lottery tickets purchased in this State, including payments received from a 3rd party for the transfer of the rights to future proceeds related to any gambling activity or lottery tickets. [2005, c. 332, §20 (AMD).]
[ 2005, c. 12, Pt. LLLL, §2 (AMD); 2005, c. 332, §20 (AMD) .]
3. Intangibles. Income from intangible personal property including annuities, dividends, interest and gains from the disposition of intangible personal property, shall constitute income derived from sources within this State only to the extent that such income is from property employed in a business, trade, profession, or occupation carried on in this State.
[ P&SL 1969, c. 154, §F (NEW) .]
3-A. Gain or loss on sale of partnership interest. Notwithstanding subsection 3, the gain or loss on the sale of a partnership interest is sourced to this State in an amount equal to the gain or loss multiplied by the ratio obtained by dividing the original cost of partnership tangible property located in Maine by the original cost of partnership tangible property everywhere, determined at the time of the sale. Tangible property includes property owned or rented and is valued in accordance with section 5211, subsection 10. If more than 50% of the value of the partnership's assets consist of intangible property, gain or loss from the sale of the partnership interest is sourced to this State in accordance with the sales factor of the partnership for its first full tax period immediately preceding the tax period of the partnership during which the partnership interest was sold. For purposes of this subsection, the sales factor of a partnership is determined in accordance with section 5211, subsections 14, 15 and 16-A. This subsection does not apply to the sale of a limited partner's interest in an investment partnership where more than 80% of the value of the partnership's total assets consists of intangible personal property held for investment, except that such property cannot include an interest in a partnership unless that partnership is itself an investment partnership.
If the apportionment provisions of this section do not fairly represent the extent of the partnership's business activity in this State, the taxpayer may petition for, or the State Tax Assessor may require, in respect to all or any part of the partnership's business activity the employment of any other method to effectuate an equitable apportionment to this State of the partner's income from the sale of the partnership interest.
[ 2007, c. 627, §83 (AMD) .]
4. Deductions for losses. Deductions with respect to capital losses, net long-term capital gains, and net operating losses shall be based solely on income, gains, losses and deductions derived from or connected with sources in this State, under regulations to be prescribed by the assessor but otherwise shall be determined in the same manner as the corresponding federal deductions.
[ P&SL 1969, c. 154, §F (NEW) .]
5. Small business corporation.
[ 1981, c. 706, §38 (RP) .]
6. Apportionment. If a business, trade, profession or occupation is carried on partly within and partly without this State, the items of income and deduction derived from or connected with sources within this State shall be determined as apportioned to this State under chapter 821 or in the case of the rendering of purely personal services by an individual under regulations to be prescribed by the assessor.
[ 1987, c. 841, §3 (AMD) .]
7. Service in Armed Forces. Compensation paid by the United States for service in the Armed Forces of the United States performed by a nonresident shall not constitute income derived from sources within this State.
[ P&SL 1969, c. 154, §F (NEW) .]
8. Minimum taxability threshold.
[ 2005, c. 332, §21 (RP); 2005, c. 332, §30 (AFF) .]
8-A. Minimum taxability threshold. Minimum taxability thresholds for nonresidents are as follows.
A. Compensation received during any taxable year after 2003 for personal services performed in this State as an employee prior to January 1, 2004 is Maine-source income subject to taxation under this Part if the nonresident taxpayer is present in the State performing the personal services for more than 10 days during that taxable year. [2005, c. 332, §22 (NEW); 2005, c. 332, §30 (AFF).]
B. Compensation received during any taxable year after 2003 for personal services performed in this State as an employee after December 31, 2003 is Maine-source income subject to taxation under this Part if the nonresident taxpayer was present in the State performing personal services for more than 10 days during the year in which the personal services were performed. [2005, c. 332, §22 (NEW); 2005, c. 332, §30 (AFF).]
[ 2005, c. 332, §22 (NEW); 2005, c. 332, §30 (AFF) .]
SECTION HISTORY
P&SL 1969, c. 154, §F1 (NEW). 1981, c. 706, §§37,38 (AMD). 1987, c. 841, §3 (AMD). 1993, c. 478, §1 (AMD). 1999, c. 521, §B11 (AFF). 1999, c. 521, §B2 (AMD). 2003, c. 391, §6 (AMD). 2003, c. 673, §E1 (AMD). 2003, c. 673, §E3 (AFF). 2005, c. 12, §§LLLL1,2,MM MM1 (AMD). 2005, c. 12, §MMMM3 (AFF). 2005, c. 332, §§20-22 (AMD). 2005, c. 332, §30 (AFF). 2007, c. 240, Pt. V, §1 (AMD). 2007, c. 627, §83 (AMD). 2009, c. 434, §71 (AMD). 2009, c. 434, §85 (AFF).
Chapter 807: COMPUTATION OF TAXABLE INCOME OF NONRESIDENT INDIVIDUALS
§5142. Adjusted gross income from sources in this State
1. General. A tax is imposed for each taxable year on the Maine adjusted gross income of every nonresident individual. The amount of the tax equals the tax computed under section 5111 and chapter 805, as if the nonresident were a resident, multiplied by the ratio of the individual's Maine adjusted gross income, as defined in section 5102, subsection 1-C, paragraph B, to the nonresident's entire federal adjusted gross income, as modified by section 5122. The Maine adjusted gross income of a nonresident individual derived from or connected with sources in this State is the sum of the following:
A. The net amount of items of income, gain, loss, and deduction entering into the nonresident individual's federal adjusted gross income that are derived from or connected with sources in this State including (i) the individual's distributive share of partnership or limited liability company income and deductions determined under section 5192, (ii) the individual's share of estate or trust income and deductions determined under section 5176, and (iii) the individual's pro rata share of the income of an S corporation derived from or connected with sources in this State; and [2005, c. 12, Pt. LLLL, §1 (AMD).]
B. The portion of the modifications described in section 5122, subsections 1 and 2 that relates to income derived from or connected with sources in this State, including any modifications attributable to the nonresident individual as a partner of a partnership, shareholder of an S corporation, member of a limited liability company or beneficiary of an estate or trust. [2005, c. 12, Pt. LLLL, §1 (AMD).]
C. [2005, c. 12, Pt. LLLL, §1 (RP).]
[ 2009, c. 434, §71 (AMD); 2009, c. 434, §85 (AFF) .]
2. Attribution. Items of income, gain, loss, and deduction derived from or connected with sources within this State are those items attributable to:
A. The ownership or disposition of any interest in real or tangible personal property in this State; [2005, c. 12, Pt. LLLL, §2 (AMD).]
B. A business, trade, profession or occupation carried on in this State; and [2005, c. 12, Pt. LLLL, §2 (AMD).]
C. Proceeds from any gambling activity conducted in this State or lottery tickets purchased in this State, including payments received from a 3rd party for the transfer of the rights to future proceeds related to any gambling activity or lottery tickets. [2005, c. 332, §20 (AMD).]
[ 2005, c. 12, Pt. LLLL, §2 (AMD); 2005, c. 332, §20 (AMD) .]
3. Intangibles. Income from intangible personal property including annuities, dividends, interest and gains from the disposition of intangible personal property, shall constitute income derived from sources within this State only to the extent that such income is from property employed in a business, trade, profession, or occupation carried on in this State.
[ P&SL 1969, c. 154, §F (NEW) .]
3-A. Gain or loss on sale of partnership interest. Notwithstanding subsection 3, the gain or loss on the sale of a partnership interest is sourced to this State in an amount equal to the gain or loss multiplied by the ratio obtained by dividing the original cost of partnership tangible property located in Maine by the original cost of partnership tangible property everywhere, determined at the time of the sale. Tangible property includes property owned or rented and is valued in accordance with section 5211, subsection 10. If more than 50% of the value of the partnership's assets consist of intangible property, gain or loss from the sale of the partnership interest is sourced to this State in accordance with the sales factor of the partnership for its first full tax period immediately preceding the tax period of the partnership during which the partnership interest was sold. For purposes of this subsection, the sales factor of a partnership is determined in accordance with section 5211, subsections 14, 15 and 16-A. This subsection does not apply to the sale of a limited partner's interest in an investment partnership where more than 80% of the value of the partnership's total assets consists of intangible personal property held for investment, except that such property cannot include an interest in a partnership unless that partnership is itself an investment partnership.
If the apportionment provisions of this section do not fairly represent the extent of the partnership's business activity in this State, the taxpayer may petition for, or the State Tax Assessor may require, in respect to all or any part of the partnership's business activity the employment of any other method to effectuate an equitable apportionment to this State of the partner's income from the sale of the partnership interest.
[ 2007, c. 627, §83 (AMD) .]
4. Deductions for losses. Deductions with respect to capital losses, net long-term capital gains, and net operating losses shall be based solely on income, gains, losses and deductions derived from or connected with sources in this State, under regulations to be prescribed by the assessor but otherwise shall be determined in the same manner as the corresponding federal deductions.
[ P&SL 1969, c. 154, §F (NEW) .]
5. Small business corporation.
[ 1981, c. 706, §38 (RP) .]
6. Apportionment. If a business, trade, profession or occupation is carried on partly within and partly without this State, the items of income and deduction derived from or connected with sources within this State shall be determined as apportioned to this State under chapter 821 or in the case of the rendering of purely personal services by an individual under regulations to be prescribed by the assessor.
[ 1987, c. 841, §3 (AMD) .]
7. Service in Armed Forces. Compensation paid by the United States for service in the Armed Forces of the United States performed by a nonresident shall not constitute income derived from sources within this State.
[ P&SL 1969, c. 154, §F (NEW) .]
8. Minimum taxability threshold.
[ 2005, c. 332, §21 (RP); 2005, c. 332, §30 (AFF) .]
8-A. Minimum taxability threshold. Minimum taxability thresholds for nonresidents are as follows.
A. Compensation received during any taxable year after 2003 for personal services performed in this State as an employee prior to January 1, 2004 is Maine-source income subject to taxation under this Part if the nonresident taxpayer is present in the State performing the personal services for more than 10 days during that taxable year. [2005, c. 332, §22 (NEW); 2005, c. 332, §30 (AFF).]
B. Compensation received during any taxable year after 2003 for personal services performed in this State as an employee after December 31, 2003 is Maine-source income subject to taxation under this Part if the nonresident taxpayer was present in the State performing personal services for more than 10 days during the year in which the personal services were performed. [2005, c. 332, §22 (NEW); 2005, c. 332, §30 (AFF).]
[ 2005, c. 332, §22 (NEW); 2005, c. 332, §30 (AFF) .]
SECTION HISTORY
P&SL 1969, c. 154, §F1 (NEW). 1981, c. 706, §§37,38 (AMD). 1987, c. 841, §3 (AMD). 1993, c. 478, §1 (AMD). 1999, c. 521, §B11 (AFF). 1999, c. 521, §B2 (AMD). 2003, c. 391, §6 (AMD). 2003, c. 673, §E1 (AMD). 2003, c. 673, §E3 (AFF). 2005, c. 12, §§LLLL1,2,MM MM1 (AMD). 2005, c. 12, §MMMM3 (AFF). 2005, c. 332, §§20-22 (AMD). 2005, c. 332, §30 (AFF). 2007, c. 240, Pt. V, §1 (AMD). 2007, c. 627, §83 (AMD). 2009, c. 434, §71 (AMD). 2009, c. 434, §85 (AFF).
