Sec. 12-711. Determination of income, gain, loss and deduction derived from or connected with sources within this state. - Connecticut Statutes

      Sec. 12-711. Determination of income, gain, loss and deduction derived from or connected with sources within this state. (a) The income of a nonresident natural person derived from or connected with sources within this state shall be the sum of the net amount of items of income, gain, loss and deduction entering into his Connecticut adjusted gross income for the taxable year, derived from or connected with sources within this state, including: (1) His distributive share of partnership income, gain, loss and deduction, determined under section 12-712, and (2) his pro rata share of S corporation income, gain, loss and deduction, determined under section 12-712, and (3) his share of estate or trust income, gain, loss and deduction, determined under section 12-714.

      (b) (1) Items of income, gain, loss and deduction derived from or connected with sources within this state shall be those items attributable to: (A) The ownership or disposition of any interest in real or tangible personal property in this state; (B) a business, trade, profession or occupation carried on in this state; (C) in the case of a shareholder of an S corporation, the ownership of shares issued by such corporation, to the extent determined under section 12-712; or (D) winnings from a wager placed in a lottery conducted by the Connecticut Lottery Corporation, if the proceeds from such wager are required, under the Internal Revenue Code or regulations adopted thereunder, to be reported by the Connecticut Lottery Corporation to the Internal Revenue Service.

      (2) Income from intangible personal property, including annuities, dividends, interest and gains from the disposition of intangible personal property, shall constitute income derived from sources within this state only to the extent that such income is from (A) property employed in a business, trade, profession or occupation carried on in this state, or (B) winnings from a wager placed in a lottery conducted by the Connecticut Lottery Corporation, if the proceeds from such wager are required, under the Internal Revenue Code or regulations adopted thereunder, to be reported by the Connecticut Lottery Corporation to the Internal Revenue Service.

      (3) Deductions with respect to capital losses and net operating losses shall be based solely on income, gain, loss and deduction derived from or connected with sources within this state, under regulations adopted by the commissioner, but otherwise shall be determined in the same manner as the corresponding federal deductions.

      (4) Income directly or indirectly derived by an athlete, entertainer or performing artist from closed-circuit and cable television transmissions of an event, other than events occurring on a regularly scheduled basis, taking place within this state as a result of the rendition of services by such athlete, entertainer or performing artist shall constitute income derived from or connected with sources within this state only to the extent that such transmissions were received or exhibited within this state.

      (c) If a business, trade, profession or occupation is carried on partly within and partly without this state, as determined under rules or regulations of the commissioner, the items of income, gain, loss and deduction derived from or connected with sources within this state shall be determined by apportionment under such rules or regulations.

      (d) Compensation paid by the United States for active service in the armed forces of the United States, performed by an individual not domiciled in this state, shall not constitute income derived from sources within this state.

      (e) If a husband and wife determine their federal income tax on a joint return but are required to determine their Connecticut income taxes separately, they shall determine their incomes derived from or connected with sources within this state separately as if their federal adjusted gross incomes had been determined separately.

      (f) Any nonresident, other than a dealer holding property primarily for sale to customers in the ordinary course of his trade or business, shall not be deemed to carry on a trade, business, profession or occupation in this state solely by reason of the purchase or sale of intangible property or the purchase, sale or writing of stock option contracts, or both, for his own account.

      (June Sp. Sess. P.A. 91-3, S. 62, 168; May Sp. Sess. P.A. 92-5, S. 9, 37; May Sp. Sess. P.A. 92-17, S. 13, 59; P.A. 98-244, S. 29, 35; June Sp. Sess. P.A. 01-6, S. 37, 85; May 9 Sp. Sess. P.A. 02-1, S. 81; May 9 Sp. Sess. P.A. 02-4, S. 17.)

      History: June Sp. Sess. P.A. 91-3, S. 62, effective August 22, 1991, and applicable to taxable years of taxpayers commencing on or after January 1, 1991; May Sp. Sess. P.A. 92-5 amended Subsec. (a) to make a technical change, effective June 19, 1992, and applicable to taxable years of taxpayers commencing on or after January 1, 1992; May Sp. Sess. P.A. 92-17 added Subsec. (f), concerning the treatment of the trading of intangible property and stock option contracts, effective June 19, 1992, and applicable to taxable years of taxpayers commencing on or after January 1, 1992; P.A. 98-244 added Subsec. (b)(4) specifying that income derived directly or indirectly by an athlete, entertainer or performing artist from certain closed-circuit and cable television transmissions shall constitute income derived from or connected with sources within this state to the extent that such transmissions were received or exhibited within this state, effective June 8, 1998, and applicable to taxable years commencing on or after January 1, 1998; June Sp. Sess. P.A. 01-6 amended Subsec. (b)(1) and (2) to make technical changes and apply provisions to Connecticut lottery winnings in excess of $5,000, effective July 1, 2001, and applicable to taxable years commencing on or after January 1, 2001; May 9 Sp. Sess. P.A. 02-1 amended Subsec. (b) to include in income for nonresidents lottery winnings required to be reported to the Internal Revenue Service and winnings from any other wagering transaction or gambling activity in this state if such winnings are required to be reported to the Internal Revenue Service and to add definition of "in this state", effective July 1, 2002, and applicable to taxable years commencing January 1, 2002; May 9 Sp. Sess. P.A. 02-4 amended Subsec. (b) to delete the inclusion of certain reportable winnings from wagers, other than state lottery wagers, placed in this state and to delete definition of "in this state", effective July 1, 2002, and applicable to taxable years commencing on or after January 1, 2002.