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SUMMARY : This rule
provides income tax guidance for nonresident individuals in the following
areas:
• Determination of Maine-source income;
• Deduction of Maine losses;
• Attribution and apportionment of income, tax additions and tax
credits to Maine;
• Returns, worksheets and schedules to be used for filing;
• Determination of taxable income and tax credits for spouses filing as
single individuals; and
• Income tax withholding obligations.
______________________________________________________________________________
Outline of Contents:
.01 Definitions
.02 Income
subject to Maine
income tax
.03 Income
not subject to Maine
income tax
.04 Deduction
of losses
.05 Special
sourcing rules
.06 Income tax credits
.07 Return of nonresident or part-year resident individual
.08 Maine taxable income computation for spouses filing as single
individuals
_____________________________________________________________________________
.01
Definitions
A. Intangible property. “Intangible
property” means a right or possession of a nonphysical or abstract nature
that has value, or a financial asset that has no intrinsic value but that
represents value. Intangible property
includes but is not limited to copyrights, patents, licenses, bills of
exchange, trademarks, business books and records, business goodwill,
covenants not to compete, securities, bonds, notes, insurance policies, and
accounts receivable.
B. Pass-through entity. “Pass-through
entity” means a corporation that for the applicable tax year is treated as an
S corporation under the Code, or a general partnership, limited partnership,
limited liability partnership, limited liability company, trust or similar
entity that for the applicable tax year is not taxed at the entity level for
federal income tax purposes. “Pass-through entity” does not, for Maine income tax
purposes, include a financial institution subject to tax under 36 MRSA
Chapter 819.
C. Permanent business presence. “Permanent business presence” means presence in
the State on a systematic or regular basis for the purpose of conducting
business.
D. Research and
development. “Research and
development” means activities performed in the experimental or laboratory
sense if they are intended to discover information that would eliminate
uncertainty concerning the development or improvement of a product, formula,
invention, process, technique, or patent, but excludes quality control
testing and inspection, advertising or promotions, efficiency or consumer
surveys, management studies, research
in connection with literary, historical or similar projects, or the
acquisition of another’s patent, model, production, or process.
E. Tangible personal
property. “Tangible personal property” means personal property that
has physical existence. It can be
seen, weighed, measured, felt, touched or in any other manner perceived by
the senses, but does not include anything that constitutes intangible
property as defined in subsection A above.
F. Temporary
business presence. “Temporary business presence” means a
presence in the State on other than a systematic or regular basis, either directly
or through agents or employees for purpose of conducting business.
.02 Income subject to Maine income tax
A. Generally. Income
received by a nonresident is attributable to and taxable by Maine
when the income is derived from or connected with sources in Maine (“Maine-source
income”). The itemized and standard
deductions, credits, income modifications and personal exemptions applicable
to residents also apply to nonresidents. A Maine-source loss is determined in the
same manner that a Maine-source gain is determined. Each nonresident partner of a partnership,
member of a limited liability company (“LLC”) categorized as a partnership,
and shareholder of an S Corporation is subject to Maine income taxation on Maine-source
income allocable to the nonresident from the partnership, LLC or S
Corporation. Estates of nonresident
decedents and nonresident trusts are also subject to tax if Maine-source
income has been received.
B.
Compensation for personal services. Except
as provided by federal law, compensation received for personal services
performed in Maine,
regardless of where paid, is Maine-source income. Personal service compensation includes, but
is not limited to, wages, salaries, taxable benefits such as annual and sick
leave, commissions, fees, or payment in kind. Personal services performed in Maine include sick time and vacation time earned while
working in Maine.
In the case of compensation for
personal services, unless excluded from the definition of “income” under the
Internal Revenue Code, the taxpayer must report all Maine-source income even
though the taxpayer does not receive the entire amount of such income. For example, amounts withheld by an employer
for federal income taxes, FICA contributions, medical insurance plans, or
other similar withholding deductions must be included in Maine-source income;
on the other hand, compensation contributed to a 401(k) plan is not subject
to Maine taxation. Unemployment
compensation received by a nonresident that is derived from employment in Maine is Maine-source
income.
With respect to incentive stock options,
nonstatutory stock options, and employee stock purchase plans, compensation
for personal services performed in Maine generally includes, for nonresident
employees working in Maine at the time the employee is granted the right to a
stock option plan, the amount that represents the fair market value of the
stock on the date exercised (i.e.
when the employee has purchased the stock) over the option price of the stock
at the time the option is granted. When
the period between the grant of a stock option and the time the option is
exercised straddles employment within and without the state of Maine, an
adjustment must be made in accordance with section .05, subsection A below ;
the compensation sourced to Maine must be included in Maine adjusted gross
income during the same tax year the income is included in federal adjusted
gross income. For purposes of stock
option plans described in this paragraph, income derived from personal
services is compensation even if the amount is reported as a capital gain on
the federal income tax return.
C. Business income. All
income derived from or connected with the carrying on of a trade or business
within Maine
is Maine-source income. Generally, a
nonresident has a trade or business in Maine
if:
1. The
nonresident, directly or through agents or employees or through a
pass-through entity in which the taxpayer is a shareholder, member, or
partner, maintains or operates or shares in maintaining or operating a desk,
room, office, shop, store, warehouse, factory, or any other place in Maine
where business affairs are systematically and regularly conducted; or
2. The
nonresident, directly or through agents or employees or through a
pass-through entity in which the taxpayer is a shareholder, member, or
partner, is present for business in Maine on other than a systematic or
regular basis and earns or derives gross income during the taxable year from
contractual or sales-related activities.
D. Income from ownership of real or tangible
personal property. All income derived from the ownership of real or tangible
personal property located in Maine is Maine-source income; however, unless
the property was employed in a business, trade, profession, or occupation
carried on in this State, interest income earned from the sale of such
property will not be subject to Maine income tax. Maine-source income includes rents derived
from and gains from a federally taxable sale or exchange of:
1. Real
property located in Maine;
2. Tangible
personal property having a situs in Maine;
or
3. Any interest in a
Maine
time-share or similar arrangement.
E. Income from the sale of a partnership
interest. The income from the sale of a partnership interest on or
after July 1, 2005, by a nonresident is sourced to Maine to the extent of the
ratio of the partnership's tangible property located in Maine to the
partnership's tangible property located everywhere in the United States,
determined based on original cost. “Original
cost” for purposes of this subsection and 36 M.R.S.A. § 5142(3-A) is defined
in Rule 801.09(D). Tangible property
includes real estate, inventory and equipment that is owned or rented by the
partnership. If more than 50% of the
partnership's assets consist of intangible property, the gain or loss is
allocated to Maine
based on the sales factor of the partnership for the prior tax year. “Sales” for purposes of computing the sales
factor are defined in Rule No. 801. “Property”
for purposes of computing the ratio of property located in Maine to property located everywhere is
defined in Rule No. 801. Maine-source
income does not include income from 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 set forth in this
subsection 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 (“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. See 36 MRSA §5142(3-A). The provisions of this subsection also apply
to an LLC, unless it elects at the federal level to be taxed as an entity
other than a partnership. See 36 MRSA
§ 5180(1).
F. Gambling activity/lottery winnings. Winnings
received by a nonresident from the Maine Lottery or the Tri-State Lotto (Maine, New Hampshire, Vermont) is Maine-source income if the winning ticket
was purchased in Maine
on or after July 13, 1993. Maine-source
income also includes proceeds from any gambling activity conducted in Maine,
lottery tickets purchased in Maine (except as provided in the previous
sentence) and payments received from third parties as consideration for the
transfer of rights to future proceeds related to gambling activity in Maine
or lottery tickets purchased in Maine.
G. Minimum
taxability thresholds. Nonresidents
with certain types of Maine-source income are subject to income taxation on
that income only if the minimum taxability threshold is reached. All other
Maine-source income of the nonresident is subject to income taxation as
required by the law. Notwithstanding
the provisions of subsection B above, a
nonresident is subject to Maine income tax on compensation that is
Maine-source income earned through the performance of personal services in
this State as an employee or on Maine-source income that is derived from the
trade or business in Maine as discussed below and is required to pay Maine
tax on that income only if the income is not described in section .03 below
and if:
1. For compensation received prior to 2004 , the nonresident individual:
(a) Was
present in Maine performing personal services for more than 20 days during
the taxable year and directly earned or derived more than $6,000 in gross
income during the taxable year in Maine from all sources;
(b) The
nonresident individual had income described in section .02(C)(1) from a
permanent business presence in Maine;
or
(c) The
nonresident individual had business income described in section .02(C)(2) from
a temporary business presence in Maine
in excess of $6,000 of gross income during the taxable year from contractual
or sales-related activities.
2. For
compensation received in 2004 or thereafter from personal services performed
in Maine prior to 2004, the nonresident
individual is present in Maine performing personal services as an employee for
more than 10 days during the taxable year in which the compensation is
received ; and
3. For compensation
received in 2004 or thereafter from personal services performed in Maine in 2004 through 2010, the nonresident
individual is present in Maine
performing personal services as an employee for more than 10 days during the
taxable year in which the compensation is earned.
4. For
compensation earned or derived in 2011
or thereafter, the nonresident
individual:
(a) Was
present in Maine performing personal services as an employee for more than 12
days during that taxable year and directly earned or derived more than $3,000
in gross income during the taxable year in Maine from all sources;
(b) Had
income described in section .02(C)(1) from an entity with a permanent business
presence in Maine;
or
(c)
Had a temporary business
presence in Maine
for more than 12 days during that taxable year and earned or derived in
excess of $3,000 of gross income during the taxable year from contractual or
sales-related activities.
The days worked in Maine that count
toward the taxability threshold need not be consecutive. Any portion of a day spent performing
personal services in Maine is counted as a full day. For taxable years of less than 12 months,
day references must be pro rated based on the number of months of the taxable
year over 12 multiplied by the day threshold.
H.
Certain
personal services not counted towards the 12-day minimum taxability
threshold. Some time spent by a nonresident who is present in the State performing certain
services as an employee will not count towards the 12-day threshold in
.02(G)(4)(a). No more than 24 days may
be excluded under this provision. The
excluded personal services fall into the following four categories:
1. Any personal service performed in
connection with presenting or receiving employment-related training or
education. The services include providing
instruction at or attending seminars, hands-on training, on-the-job training,
or other types of educational opportunities required by or related to the
nonresident’s employment.
2. Any personal service performed in
connection with a site inspection, review, analysis of management, or any
other supervision:
(a) At a company-owned facility on behalf
of a company not headquartered in Maine;
or
(b) At a Maine-based affiliated or
subsidiary company on behalf of its parent.
3. Any personal service performed in
connection with research and development at a facility based in Maine or in connection
with the installation of new or upgraded equipment or systems at that facility.
(a) Research and
development at that facility; or
(b) Installation or repair of any equipment or systems used for purposes
of research and development at that facility.
4. Any personal service performed as
part of a project team working on the attraction or implementation of new
investment in a facility based in Maine. Nonresident individual employees engaged in
financial or business planning, engineering or construction, or testing,
permitting or inspection, or other services as members of a project team that
has as its purpose bringing in or implementing new investment of money or
resources in an existing or new Maine-based facility or in the expansion,
renovation, development or construction of the facility itself.
.03 Income not subject to Maine income tax
The following types of income
earned or derived by nonresidents are not subject to Maine income tax:
A. Certain
intangible income. Except for the provisions of Section .02, income from intangibles,
such as annuities, interest, dividends, copyrights, patents, and gains from
the sale or exchange of intangibles (other than the sale of partnership
interests), when not related to a trade, business, profession or occupation
carried on in Maine;
B. Certain
military pay. Compensation paid by the United States of America to its
uniformed military personnel for services rendered on active duty, including
members of the Army, Navy, Air Force, Coast Guard, and Marines who are
assigned to a military air base, naval station, or any facility in Maine,
public or private, to which they must report under service orders (see the
federal Servicemembers Civil Relief Act of 2003);
C. Military
spouses. Income earned from
services performed in Maine by a nonresident
spouse of a servicemember if the spouse is a nonresident in Maine
solely to be with a servicemember who is in Maine in compliance with that
servicemember’s orders;
D. Certain
transportation employees. Earnings paid to nonresident transportation workers whose
wages are exempt from Maine
taxation by federal law, including interstate railroad and motor carrier
employees who perform services for their employer in more than one state (49
USCS §§ 11502 and 14503); and
E. Exempt retirement income. Retirement
income, including pensions and deferred compensation received after
termination of employment, that is exempt from state income taxes pursuant to
United States law (4 USCS § 114).
F. Certain nonresidents working in Maine under interlocal
agreements. Beginning in tax year 2011, income
earned by a nonresident employee of a political subdivision of an
adjoining state performing services in Maine
in accordance with an interlocal agreement under 30-A MRSA, Chapter 115 is
not considered Maine-source income, so long as the work performed does not
displace a Maine
resident employee.
G. Other income. Any
other income earned by a nonresident that is protected from Maine taxation by federal law.
.04 Deduction
of losses
A loss that is deducted in
computing the nonresident taxpayer's federal adjusted gross income is
automatically included in that taxpayer's Maine adjusted gross income for the same
tax year. If the loss is a
“Maine-source loss,” it is allocated to Maine
when computing business income from Maine
sources on Schedule NR or Schedule NRH. A Maine-source loss is determined in the
same manner that a Maine-source gain is determined.
A. Net operating loss. A net
operating loss that is derived from or connected with the carrying on of a
trade or business in Maine
is a Maine-source loss.
B. Capital
loss. A capital loss that is derived from the ownership or
disposition of any interest in real or tangible personal property located in Maine is a
Maine-source loss.
C. Rental
loss. A rental loss derived from real or tangible personal
property located in Maine
is a Maine-source loss.
D. Carryback or carryforward. Since
Maine adjusted gross income is derived from federal adjusted gross income and
the Internal Revenue Code provides for the carry back or carry forward of certain
losses, a taxpayer may carry back (except as provided in the next paragraph)
or carry forward a loss on the Maine return only if that loss is carried back
or carried forward on the taxpayer’s federal return for the same tax year, excluding
losses disallowed in 2009, 2010 and 2011. If the only Maine-source items in federal
adjusted gross income are losses, and those Maine
losses are fully absorbed by income derived from sources outside of Maine, the Maine
losses cannot be carried back or carried forward for Maine purposes.
1. Net
operating losses realized after 2001. Net operating losses realized after 2001
that are carried back for federal income tax purposes are not allowed for Maine income tax
purposes in the carryback year. The
disallowance is effected through an addition income modification in the
carryback year. The amount of the
addition income modification may be used as a subtraction modification in the
loss year (assuming there are sufficient Maine
income tax income additions in that year) or in tax years subsequent to the
year of the loss, but only to the extent not previously used to offset Maine income. Only that portion of the carry back loss
that is sourced to Maine
may be used to reduce federal adjusted gross income in the loss year or
carryforward years. The net operating
loss amount must be used within the allowable net operating loss carryover
period.
2. Tax years beginning in 2009, 2010, and
2011. Maine disallows carryforwards in 2009,
2010, and 2011. Any federal
carryforward in those years must be offset with a corresponding addition
modification. The addition modifications for a federal carryback or
carryforward can be recaptured in years subsequent to the year of the loss,
beginning with tax year 2012, through subtraction modifications. The recapture modifications must be reduced
by any Maine
income that is offset in the year of the loss. 36 MRSA §
5122(1)(DD) and (2)(CC).
E. Negative or zero federal adjusted gross
income. If the nonresident taxpayer's federal adjusted gross
income is negative or zero for the taxable year and the taxpayer has
recognized Maine-source income, there will be no Maine tax on that income.
.05 Special sourcing
rules
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 MRSA § 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 income wherever earned
(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.
E. Entertainers. The
Maine-source entertainment income of nonresident entertainers is the entire
amount received for performances, engagements or events that occurred in Maine. In the case of a nonresident entertainer
who is not paid specifically for a performance in Maine, the following
apportionment formula must be used: The
income earned and subject to the Maine income tax is the entertainer's total
annual compensation multiplied by a fraction, the numerator of which is the
number of performances the entertainer performed (or was available to
perform, as, for example, with understudies) in Maine, and the denominator of
which is the total number of performances which the entertainer was obligated
to perform under contract or otherwise during the taxable year.
F. Self-employed
nonresidents and nonresident owners of pass-through entities carrying on a
trade or business in Maine
and elsewhere. Self-employed nonresidents and nonresident owners of
pass-through entities carrying on a trade or business both within Maine and elsewhere
must apportion their income in accordance with 36 MRSA § 5211 and Rule 801 in
order to determine the amount of Maine-source income. See 36 MRSA § 5192.
.06 Income tax credits
Most income tax credits
available to a resident individual are also available to a nonresident individual;
however, personal income tax credits, such as the credit for child care
expenses (36 MRSA § 5218) and the retirement and disability credit (36 MRSA §
5219-A), must be prorated based upon the ratio of the taxpayer's Maine-source
income to entire federal adjusted gross income as modified by 36 MRSA § 5122.
The total amount of income tax credits
based upon a business being operated in Maine by the nonresident taxpayer
(business credits) may be claimed without proration, subject to the
limitations contained in the statute for the credit or credits involved. (See 36 MRSA Chapter 822.)
.07 Return of nonresident or part-year
resident individual
Nonresidents and part-year
residents must file the Maine
resident long form supplemented by Schedule NR or Schedule NRH. Schedules NR and NRH are used to separate
Maine-source income or loss from non-Maine-source income or loss and to
compute the nonresident credit. A copy of the federal income tax return (Form
1040) and Schedule A (if itemized deductions are claimed on the Maine return) must be
attached. The taxpayer must submit a
copy of any other federal forms or schedules that the Assessor deems
necessary to determine Maine-source income.
.08 Maine
taxable income computation for spouses filing as single individuals
A married individual who files
as a single individual must file the Maine
resident long form supplemented by Schedule NRH. In completing Schedule NRH, the following
steps must be followed in order to calculate the filing spouse's share of the
income, deductions, and other items, in order to separate Maine-source income
or loss from non-Maine-source income or loss and to compute the nonresident
credit:
A. Individual's income share. Earned
income, including, but not limited to, income from wages, salaries, tips, and
other items of value received from an employer for services performed or from
self-employment is totally attributed to the spouse so compensated. For other income, if separate accounting has
been maintained so that the income, expense and deductions can be separately
determined and substantiated, the individual filing must report as if a
separate federal return had been filed. Otherwise, the individual's share is 50% of
all other income.
B. Income ratio. The
ratio of the individual's share of total income is computed by dividing the
individual's income share as determined in subsection A by the total income
reported on the federal married joint return.
C.
Adjustments to income. Adjustments
to income appearing on the federal married joint return for Maine purposes is
the actual distribution of adjustments, if supported by adequate records. Otherwise, apportion adjustments according
to the income ratio as determined in subsection B.
D.
Federal adjusted gross income. Income
adjustments determined pursuant to subsection C are deducted from income
share determined pursuant to subsection A in order to determine the
individual's federal adjusted gross income.
E. Maine adjusted gross income. The
Maine adjusted gross income for the individual filing is determined by adding
to the federal adjusted gross income calculated in subsection 4 D the
individual's other income share, if any, that is taxable by Maine but not at
the federal level, and by deducting any amount included in the federal
adjusted gross income that is taxable at the federal level but not by Maine.
F. Maine
deductions. The individual must elect either the Maine standard
deduction for single individuals or the amount of the married joint federal
itemized deductions less applicable Maine modifications multiplied by the
electing individual's income ratio (as determined pursuant to subsection B). Instead of applying the individual's income
ratio to the joint itemized deductions, the taxpayer may elect to utilize
actual itemized deductions, less applicable Maine modifications, attributable
to him or her if supported by adequate records.
G. Maine
exemptions. The filing individual is entitled to his or her exemption
as authorized by 36 MRSA § 5126 plus the number of dependent exemptions from
the federal married joint return multiplied by the electing individual's
income ratio (as determined pursuant to subsection B. No amount may be claimed for the other
spouse's personal exemption.
.09 Maine tax additions
and tax credits for spouses filing as single individuals
Maine tax additions and Maine
tax credits available if a joint return were filed is multiplied by the
electing individual's ratio of Maine adjusted gross income to the Maine
adjusted gross income of the joint return. If separate accounting has been maintained
so that tax additions and tax credits can be separately determined and
substantiated, the individual filing may report as if a separate federal
return had been filed.
.10 Maine income tax
withholding obligations
Maine law requires income tax to be withheld by the following
entities for nonresidents:
A.
Employers and certain non-wage payers.
Any
person who maintains an office or transacts business in Maine
and who is required to withhold federal income tax from a particular payment
must also withhold Maine income tax if the
payment constitutes income that is not excluded from taxation under Maine law. See 36 MRSA §§ 5250 and 5255-B. Employers who are required to withhold Maine
individual income tax from employees must withhold from the earnings of
nonresident individuals who are present in Maine performing personal
services, provided the minimum taxability thresholds contained in 36 MRSA § 5142
(8-B) are exceeded.
B.
Pass-through entities. A pass-through entity with income apportioned to Maine
must withhold Maine income tax from any nonresident's quarterly share of
Maine-source income earned by that pass-through entity as provided in 36 MRSA
§ 5250-B.
C.
Buyers of real estate from nonresidents. Buyers of Maine
real property purchased from nonresidents must withhold an amount equal to
2.5% of the sale price to be used as an estimated tax payment towards any Maine tax liability on
the gain realized from the sale. The
buyer of the property must remit the real estate withholding to Maine Revenue
Services using form REW-1. Exemptions
or reductions in the withholding amount may apply in certain situations. See 36 MRSA § 5250-A(3).
For more information on income
subject to Maine
income tax withholding and determining the amounts to be withheld, see Rule
803
.11 Application
date
This Rule applies to tax years
beginning on or after January 1, 2011.
AUTHORITY: 36
M.R.S.A. §§ 112, 5142
EFFECTIVE DATE:
December 13, 1987
AMENDED:
February 14, 1991
January 1, 1997
November 12, 2000
November 12, 2006
LAST AMENDED:
February
11, 2012 – filing 2012-16
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