§ 44-30-34 - Nonresident partners.
SECTION 44-30-34
§ 44-30-34 Nonresident partners. –(a) Portion derived from Rhode Island sources. In determining RhodeIsland income of a nonresident partner of any partnership, there shall beincluded only the portion derived from or connected with Rhode Island sourcesof the partner's distributive share of items of partnership income anddeduction entering into his or her federal adjusted gross income, as suchportion shall be determined under regulations of the tax administratorconsistent with the applicable rules of § 44-30-32.
(b) Special rules as to Rhode Island sources. Indetermining the sources of a nonresident partner's income, no effect shall begiven to a provision in the partnership agreement which:
(1) Characterizes payments to the partner as being forservices or for the use of capital; or
(2) Allocates to the partner, as income from sources outsideRhode Island, a greater proportion of his or her distributive share ofpartnership income than the ratio of partnership income from sources outsideRhode Island to partnership income from all sources, except as authorized insubsection (d) of this section; or
(3) Allocates to the partner a greater proportion of apartnership item of deduction connected with Rhode Island sources than his orher proportionate share, for federal income tax purposes, of partnershipdeductions generally, except as authorized in subsection (d) of this section.
(c) Partner's modifications. Any modificationdescribed in subsection (b) or (c) of § 44-30-12 which relates to an itemof partnership income or deduction, shall be made in accordance with thepartner's distributive share for federal income tax purposes of the item towhich the modification relates, but limited to the portion of the item derivedfrom or connected with Rhode Island sources.
(d) Alternate methods. The tax administrator may, onapplication, authorize the use of any other methods of determining anonresident's portion of partnership items derived from or connected with RhodeIsland sources, and the modifications related thereto, that may be appropriateand equitable, on any terms and conditions that the tax administrator mayrequire.
(1) A partner's distributive share of items shall bedetermined under § 44-30-15(a).
(2) The character of partnership items for a nonresidentpartner shall be determined under § 44-30-15(b).
(3) The effect of a special provision in a partnershipagreement having the principal purpose of avoidance or evasion of Rhode Islandpersonal income tax shall be determined under § 44-30-15(c).