Section 125-801-04 - Taxability in another stateA.In general. A taxpayer's income from business activity is taxable in another state if the taxpayer, by reason of such activity, is taxable in that state within the meaning of 36 M.R.S. §5211(2). A taxpayer is taxable in another state if:
(1) By reason of business activity in another state, the taxpayer is subject to a net income tax, a franchise tax measured by net income, a franchise tax for the privilege of doing business, or a corporate stock tax, as described in subsection B below; or(2) By reason of such activity, the other state has jurisdiction to subject the taxpayer to a net income tax, regardless of whether the state actually imposes such a tax on the taxpayer, as described in subsection D below.B.When a taxpayer is subject to a tax under 36 M.R.S. §5211(2). A taxpayer is subject to one of the taxes specified in 36 M.R.S. §5211(2) in another state if the taxpayer carries on activities in that state and the state imposes such a tax on the taxpayer. A taxpayer that asserts that it is subject to one of the specified taxes in another state must furnish to the assessor, upon the assessor's request, evidence to support that assertion. The assessor may request that such evidence include proof that the taxpayer has filed the requisite tax return in the other state and has paid any taxes imposed under the law of the other state.
C.Effect of voluntary tax payment. A taxpayer is not subject to one of the taxes specified in 36 M.R.S. §5211(2) in another state if the taxpayer voluntarily files and pays one or more of the specified taxes when not required to do so by the laws of that state or pays a minimal fee for qualification, organization or for the privilege of doing business in that state, but (a) does not actually engage in business activity in that state, or (b) does actually engage in some business activity not sufficient for nexus with that state and the minimal fee bears no relationship to the volume of the taxpayer's business activity within that state.D.When a state or foreign country has jurisdiction to subject a taxpayer to a net income tax. The second test under subsection A, paragraph (2) above applies if the taxpayer's business activity is sufficient to give the state jurisdiction to impose a net income tax by reason of such activity under the Constitution and statutes of the United States. Jurisdiction to tax is not present where the state is prohibited from imposing the tax by reason of the provisions of Public Law 86-272 ( 15 U.S.C.A. §§ 381-385). The determination of whether a foreign country or a political subdivision thereof has jurisdiction to subject the taxpayer to a net income tax is made as though the jurisdictional standards applicable to a state of the United States, including P.L. 86-272, apply in that country. If jurisdiction is otherwise present, that country or political subdivision thereof is not considered to lack jurisdiction by reason of the provisions of a treaty between it and the United States.E.Producing exempt income. A taxpayer is not "taxable in another state" for purposes of 36 M.R.S. §5211(2) if the only activities the taxpayer conducts in that other state are activities pertaining to the production of income that the State of Maine is prohibited from taxing by the laws or Constitution of the United States or by the Constitution of Maine.18-125 C.M.R. ch. 801, § 04