ORS Chapter 316 — Personal Income Tax

ORS 316.127. Income of nonresident from Oregon sources. (1) The adjusted gross income of a nonresident derived from sources within this state is the sum of the following: (a) The net amount of items of income, gain, loss and deduction entering into the nonresidents federal adjusted gross income that are derived from or connected with sources in this state including (A) any distributive share of partnership income and deductions and (B) any share of estate or trust income and deductions; and (b) The portion of the modifications, additions or subtractions to federal taxable income provided in this chapter and other laws of this state that relate to adjusted gross income derived from sources in this state for personal income tax purposes, including any modifications attributable to the nonresident as a partner. (2) 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; (b) A business, trade, profession or occupation carried on in this state; and (c) A taxable lottery prize awarded by the Oregon State Lottery, including a taxable lottery prize awarded by a multistate lottery association of which the Oregon State Lottery is a member if the ticket upon which the prize is awarded was sold in this state. (3) Income from intangible personal property, including annuities, dividends, interest and gains from the disposition of intangible personal property, constitutes 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. (4) 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 Department of Revenue, but otherwise shall be determined in the same manner as the corresponding federal deductions. (5) Notwithstanding subsection (3) of this section: (a) The income of an S corporation for federal income tax purposes derived from or connected with sources in this state constitutes income derived from sources within this state for a nonresident individual who is a shareholder of the S corporation; and (b) A net operating loss of an S corporation derived from or connected with sources in this state constitutes a loss or deduction connected with sources in this state for a nonresident individual who is a shareholder of the S corporation. (6) If a business, trade, profession or occupation is carried on partly within and partly without this state, the determination of net income derived from or connected with sources within this state shall be made by apportionment and allocation under ORS 314.605 to 314.675. (7) Compensation paid by the United States for service in the Armed Forces of the United States performed by a nonresident does not constitute income derived from sources within this state. (8) Compensation paid to a nonresident for services performed by the nonresident at a hydroelectric facility does not constitute income derived from sources within this state if the hydroelectric facility: (a) Is owned by the United States; (b) Is located on the Columbia River; and (c) Contains portions located within both this state and another state. (9)(a) Retirement income received by a nonresident does not constitute income derived from sources within this state unless the individual is domiciled in this state. (b) As used in this section, retirement income means retirement income as that term is defined in 4 U.S.C. 114, as amended and in effect for the tax period. (10) Compensation for the performance of duties described in this subsection that is paid to a nonresident does not constitute income derived from sources within this state if the individual: (a) Is engaged on a vessel to perform assigned duties in more than one state as a pilot licensed under 46 U.S.C. 7101 or licensed or authorized under the laws of a state; or (b) Performs regularly assigned duties while engaged as a master, officer or member of a crew on a vessel operating in the navigable waters of more than one state.