Code of Maine Rules › 18 - DEPARTMENT OF ADMINISTRATIVE AND FINANCIAL SERVICES › 125 - BUREAU OF REVENUE SERVICES › Chapter 806 - NONRESIDENT INDIVIDUAL INCOME TAX › Section 125-806-05 - Special sourcing rules

Current through 2024-29, July 17, 2024
A.
Allocation
				or apportionment required.
When a nonresident earns or derives income,
				including income from pass-through entities or sole proprietorships, from
				sources both within Maine and elsewhere, an allocation or apportionment of the
				income must be made to determine the amount of Maine-source income. The
				following provisions set forth the rules for the determination of a
				nonresident's Maine-source income; for the purpose of this section, the term
				"income" includes, in the alternative, the term "loss." A nonresident may
				submit an alternative method of allocation with respect to his or her income
				and explain that method in full on the return, subject to review and
				modification by the Assessor. An alternative basis for the apportionment of
				business income under subsection F below may be requested as provided under
				36
				M.R.S.§5211(17).
				Apportionment of items of income from the rendering of purely personal services
				by employees, salespersons, athletes, and entertainers is addressed in this
				section of the Rule.
B.
Employees generally.
When a nonresident employee can establish the
				exact amount of pay received for services performed in Maine, that amount is
				the amount of Maine-source income. When no such exact determination of amounts
				earned or derived in Maine is possible, the income must be apportioned to
				Maine. Gross (determined as if the nonresident were a resident) is multiplied
				by a fraction, the numerator of which is the number of days spent working in
				Maine and the denominator of which is the total working days. The result is the
				amount of the nonresident's Maine-source income. Days in which the employee was
				not at work, such as holidays, sick days, vacations, and paid or unpaid leave,
				are not included when computing total working days. When a working day is spent
				working partly in Maine and partly elsewhere, it is treated as one-half of a
				day spent working in Maine.
C.
Salespersons.
The Maine-source income of a salesperson or other
				employee whose compensation is based in whole or in part upon commissions is
				computed as follows: The gross income earned from sales everywhere (determined
				as if the nonresident were a resident) is multiplied by a fraction, the
				numerator of which is the amount of sales made within Maine and the denominator
				of which is the amount of sales everywhere. For the purposes of this
				calculation, the "amount of sales" is determined under the same method by which
				the amount of sales is determined for purposes of calculating the employee's
				commissions. The determination of whether sales are made within Maine or
				elsewhere is based upon where the salesperson performs the activities in
				obtaining the order, not the location of the formal acceptance of the
				contract.
D.
Professional
				Athletes
1.
Exhibition and
				regular season games.
Nonresident professional athletes must include in
				income the entire amount of compensation received for games played in Maine. In
				the case of a nonresident athlete not paid specifically for the game played in
				Maine, the following apportionment formula must be used: The income earned and
				subject to the Maine income tax is the total compensation earned during the
				taxable year, including incentive payments, bonuses, and extras, but excluding
				signing bonuses and league playoff money. Total compensation is multiplied by a
				fraction, the numerator of which is the number of exhibition and regular season
				games the athlete played (or was available to play for the athlete's team, as,
				for example, with substitutes) in Maine during the taxable year, and the
				denominator of which is the total number of exhibition and regular season games
				that the athlete was obligated to play under contract or otherwise during the
				taxable year, including games in which the athlete was excused from playing
				because of injury or illness.
2.
Playoff games.
For playoff games played in Maine, the amount of
				league playoff money earned by the professional athlete for playing or being
				available to play in such games is also income subject to apportionment under
				the following formula: League playoff money earned and subject to the Maine
				income tax is the total league playoff compensation earned during the taxable
				year multiplied by a fraction, the numerator of which is the number of playoff
				games the athlete played or was available to play in Maine during the taxable
				year, and the denominator of which is the total number of playoff games which
				the athlete's team played during the taxable year, including playoff games in
				which the athlete was excused from playing because of injury or
				illness.
3.
Signing
				bonuses.
Any amount received by a nonresident professional athlete as a
				signing bonus is excluded from the income subject to Maine
				apportionment.