(1) Guaranteed payments paid to nonresident
partners of a partnership that has business activity in the state of Oregon are
treated as a distributive share of partnership income for Oregon tax purposes.
In order to determine the income attributable to Oregon sources, each
nonresident partner's entire distributive share, including the guaranteed
payments, is then subject to the allocation and apportionment provisions of ORS
314.605 to
314.675.
Example 1
: Frank is a 25
percent partner in the law firm DC & H, Associates, a calendar year
partnership. DC & H's main office is in Washington, but it also has a
branch office in Oregon. Frank lives in Seattle and works in the Washington
branch of the firm.
For tax year 1992, Frank received $100,000 in guaranteed
payments from the partnership. Frank's 25 percent share of partnership profits
after the deduction of guaranteed payments was $50,000. DC & H calculated
an Oregon apportionment percentage of 20 percent. Frank's 1992 Oregon source
income attributable to the law firm is calculated as follows:
(2) The inclusion of guaranteed
payments into a nonresident partner's share of apportionable income is
irrespective of that partner's percentage interest in the profit or loss of the
partnership.
Example 2
: Assume
the same facts as in Example 1, except that Frank does not share in the profits
or loss of the partnership. Frank's 1992 Oregon source income attributable to
the law firm is calculated as follows:
Frank's 1992 Oregon source income - $ 20,000
(3) See ORS
314.610 and the Administrative
Rules thereunder for a definition of Oregon business activity.
Notes
Or. Admin. R.
150-316-0155
RD 7-1993, f.
12-30-93, cert. ef. 12-31-93; Renumbered from 150-316.124(2),
REV
62-2016, f. 8-15-16, cert. ef.
9/1/2016;
REV
29-2017, f. & cert. ef.
7/21/2017
Stat. Auth.: ORS
305.100
Stats. Implemented: ORS
316.124
