§ 17951-1. * Gross Income of Nonresidents.

(a) Nonresidents of the State are taxable only upon taxable income derived from sources within this State (Revenue and Taxation Code section 17041, subdivision (b)), and, accordingly, are required to include in gross income in making their returns only that portion of their gross income which is relevant in determining the amount of taxable income derived from source within this State. (For definition of nonresident, see Revenue and Taxation Code sections 17014 through 17016 and the regulations issued thereunder). For meaning of income from sources within this State, see Reg. 17951-2.

(b) The gross income of a nonresident of the State who is a member of a partnership, pool or syndicate includes, in addition to any other income from sources within this State, the member's distributive share of the taxable income of the partnership, pool or syndicate to the extent that the member's distributive share is derived from sources within this State. Amounts received from a partnership by a nonresident partner as payments for services or use of capital, constitute gross income of a nonresident. (See Reg. 17951-4).