Oregon Administrative Rules › Chapter 150 - DEPARTMENT OF REVENUE › Division 316 - PERSONAL INCOME TAX GENERAL PROVISIONS › Section 150-316-0185 - Gross Income of Nonresidents: Waterway Workers

Current through Register Vol. 63, No. 7, July 1, 2024
(1) General Policy. The State of Oregon
			 imposes taxes on Oregon source income of nonresidents to the extent allowed
			 under Oregon and federal law and exempts Oregon source income of nonresidents
			 to the extent provided under federal law:
			 46 USCA
			 11108. Under both federal and state law,
			 compensation of a nonresident waterway worker is exempt from Oregon taxation to
			 the extent the compensation is paid to an individual engaged on a vessel and
			 performing assigned duties as a licensed pilot in more than one State or to an
			 individual performing regularly assigned duties while engaged as a master,
			 officer, or crewman on a vessel operating on the navigable waters in two or
			 more states.
(2) For purposes of
			 ORS 316.127(10) and
			 this rule:
(a) "Master" is the commander of a
			 merchant vessel, who is in charge of the vessel, its crew, its passengers, and
			 the care and control of the vessel and cargo.
(b) "Member of a crew" or "crew member" is an
			 individual carried on board a vessel who is not required to obtain a license
			 (though they may be required to obtain certification) who provides services
			 such as navigation and maintenance of the vessel, its machinery, systems, or
			 services essential for propulsion and safe navigation or to provide services
			 for passengers on board.
(c)
			 "Navigable waters" are waters that are subject to the ebb and flow of the tide
			 and waters that are presently used, or were used in the past, to transport
			 interstate or foreign commerce.
(d) "Officer" is an individual carried on
			 board the vessel who must obtain a specialized license and who provides
			 navigation and maintenance of the vessel, its machinery, systems, and
			 arrangements essential for propulsion and safe navigation.
(e) "Passenger" is a person on board a vessel
			 other than:
(A) The master, a member of the
			 crew, or other person employed or engaged in any capacity in the business of
			 the vessel; or
(B) A child under
			 one year of age.
(f)
			 "Regularly assigned duties" are those duties performed on a regular basis (i.e.
			 daily, weekly, or monthly). Duties that are performed on sporadically or
			 intermittently as occurs when serving on an "on-call" or "as-needed" basis are
			 not "regularly assigned duties."
(g) "Vessel" is watercraft used, or capable
			 of being used, as a means of transportation on navigable waters in 2 or more
			 states for business purposes.
(h)
			 "Waterway worker" is a nonresident who is:
(A) Engaged on a vessel to perform assigned
			 duties in more than one State as a pilot licensed under section 7101 of Title
			 46 of the United States Code or licensed or authorized under the laws of a
			 State, or
(B) An individual who
			 performs regularly assigned duties while engaged as a master, officer, or
			 member of a crew on a vessel operating on the navigable waters in two or more
			 states.
Example 1: Ben, a resident of
			 Washington, is a crew member and works on a dredging vessel on the Willamette
			 River in Oregon and the Cowlitz River in Washington six months of the year. The
			 other six months of the year Ben works in the company's office in Portland,
			 Oregon. Only six months of compensation from his employer is exempt because
			 it's for services Ben performed on the dredging vessel and is not taxable by
			 Oregon. The remaining six months of compensation is taxable by
			 Oregon.
Example 2: Kirk, a
			 nonresident, works for a log mill located on the Oregon shore of the Columbia
			 River. He spends 6 hours a day piloting a tugboat on the river carrying logs to
			 the mill. For the remaining 2 hours of his shift, he works in the mill doing
			 maintenance on mill equipment as well as other tasks. Kirk's compensation for
			 his time working on the tugboat is not subject to Oregon tax. However, the time
			 he spent working in the mill in Oregon is Oregon-source income and subject to
			 Oregon tax. Kirk may exclude 75 percent (6 divided by 8) of his total
			 compensation from this employer from Oregon taxation. He will only report 25
			 percent of his wages in the Oregon column of his nonresident return.
Example 3: Remy, a nonresident, is a crew
			 member and works on a vessel plying the Columbia and Willamette rivers. Remy
			 makes weekly trips from Hood River to Tualatin and back, hauling cargo on the
			 vessel. Each trip entails three days on the Columbia River and two days on the
			 Willamette River. All of Remy's income is exempt and is not taxable to Oregon.
Example 4: Jim, a nonresident,
			 works in Oregon for a water transportation company that plies the waters of the
			 Columbia River. On occasion, he is called upon to work as a member of a crew
			 for a full day on one of the company's vessels when they are short-handed. His
			 income is taxable by Oregon, even for the days he works on the vessel, because
			 his work on the vessel is on an as-needed, sporadic, or intermittent basis.
Example 5: Ken, a Washington
			 resident, works in Oregon as a manager for a water transportation company whose
			 two vessels traverse the Columbia River. Once every quarter, Ken boards the
			 company's vessels to check on the employees working on the vessel. Ken's income
			 is taxable by Oregon, even for the days that he spends on board a vessel
			 because he is not a pilot, master, officer, or crew member of the
			 vessel.