§5142. Adjusted gross income from sources in this State








1. General.  
The Maine adjusted gross income of a nonresident individual derived from or connected
with sources in this State is the sum of the following amounts:





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).]



[
2011, c. 240, §32 (AMD)
.]








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, §30 (AFF);
2005, c. 332, §21 (RP)
.]








8-A. Minimum taxability threshold. 





[
2011, c. 380, Pt. CCCC, §4 (AFF);
2011, c. 380, Pt. CCCC, §1 (RP)
.]








8-B. Minimum taxability threshold; exemptions. 
Minimum taxability thresholds for nonresidents are governed by this subsection.





A. Except as provided by paragraph D, compensation for personal services performed in the State as an employee is Maine-source income
subject to taxation under this Part if the nonresident taxpayer is present in the
State performing personal services for more than 12 days during that taxable year
and directly earns or derives more than $3,000 in gross income during the year in
the State from all sources. [2011, c. 622, §5 (AMD); 2011, c. 622, §7 (AFF).]











B. Except as provided by paragraph D, a nonresident individual who is present for business in the State on other than a systematic
or regular basis, either directly or through agents or employees, has Maine-source
income derived from or effectively connected with a trade or business in the State
and subject to taxation under this Part only if the nonresident individual was present
in the State for business more than 12 days during the taxable year and earns or derives
more than $3,000 of gross income during the taxable year from contractual or sales-related
activities. [2011, c. 622, §5 (AMD); 2011, c. 622, §7 (AFF).]











C. Performance of the following personal services for 24 days during a taxable year may not be counted toward the 12-day threshold under paragraph A:



(1) Personal services performed in connection with presenting or receiving employment-related
training or education;




(2) Personal services performed in connection with a site inspection, review, analysis
of management or any other supervision of a facility, affiliate or subsidiary based
in the State by a representative from a company, not headquartered in the State, that
owns that facility or is the parent company of the affiliate or subsidiary;




(3) Personal services performed in connection with research and development at a
facility based in the State or in connection with the installation of new or upgraded
equipment or systems at that facility; or




(4) Personal services performed as part of a project team working on the attraction
or implementation of new investment in a facility based in the State. [2011, c. 548, §25 (AMD); 2011, c. 548, §36 (AFF).]












D. Compensation for personal services performed in the State as an employee and income
derived from or effectively connected with a trade or business in the State is not
Maine-source income subject to taxation under this Part if the nonresident taxpayer
is present in the State during the taxable year solely for the performance of services
or the conducting of business during a disaster period and the compensation or income
is directly related to a declared state disaster or emergency and the services were
requested by the State, a county, city, town or political subdivision of the State
or a registered business. [2011, c. 622, §5 (NEW); 2011, c. 622, §7 (AFF).]








[
2011, c. 548, §25 (AMD);
2011, c. 548, §36 (AFF);
2011, c. 622, §5 (AMD);
2011, c. 622, §7 (AFF)
.]








9. Compensation for work under interlocal agreement. 
Compensation received as an employee of a political subdivision of an adjoining
state performing service in this State pursuant to an interlocal agreement under Title
30-A, chapter 115 is not considered income derived from sources within this State
as long as the performance of the service under the interlocal agreement does not
displace an employee currently performing the service who is a resident of this State.


[
2011, c. 130, §1 (NEW);
2011, c. 130, §2 (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, §B2 (AMD).
1999, c. 521, §B11 (AFF).
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).
2011, c. 130, §1 (AMD).
2011, c. 130, §2 (AFF).
2011, c. 240, §32 (AMD).
2011, c. 380, Pt. CCCC, §§1, 2 (AMD).
2011, c. 380, Pt. CCCC, §4 (AFF).
2011, c. 548, §25 (AMD).
2011, c. 548, §36 (AFF).
2011, c. 622, §5 (AMD).
2011, c. 622, §7 (AFF).