Enrolled member of federally recognized tribe

(a) In general. Income of an enrolled member of a federally recognized tribe is exempt from Connecticut income tax as long as the member (i) resides in Indian country and (ii) only has income that is derived from or connected with sources within Indian country. Income of an enrolled member of a federally recognized tribe is subject to Connecticut income tax in the same manner as if the person were not an enrolled member if the member does not reside in Indian country. See McClanahan v. State Tax Commission, 411 U.S. 164 (1973), White Mountain Apache Tribe v. Bracker, 448 U.S. 136 (1980) and Oklahoma Tax Commission v. Sac and Fox Nation, 508 U.S. , 124 L. Ed. 2d 30 (1993).

(b) Unmarried member residing in Indian country. Every enrolled member who is unmarried and who resides in Indian country located within Connecticut—

(1) all of whose Connecticut adjusted gross income is derived from or connected with sources within Indian country, shall be exempt from Connecticut income tax. Such member shall file a Connecticut income tax return and write "exempt under section 12-702(c)(1)-3(b)" thereon.

(2) only some of whose Connecticut adjusted gross income is derived from or connected with sources within Indian country, shall be subject to Connecticut income tax. His or her Connecticut income tax liability shall be determined by multiplying his or her Connecticut income tax liability calculated as if he or she were not an enrolled member by a fraction, the numerator of which is Connecticut adjusted gross income that is not derived from or connected with sources within Indian country and the denominator of which is Connecticut adjusted gross income. Such member shall write "subject to tax under section 12-702(c)(1)-3(b)" on his or her Connecticut income tax return.

(c) Unmarried member not residing in Indian country. Every enrolled member who is unmarried and who does not reside in Indian country, shall be subject to Connecticut income tax in the same manner as if he or she were not an enrolled member of a federally recognized tribe.

(d) Member residing in Indian country and married to nonmember. Every enrolled member residing in Indian country and married to a person who is not an enrolled member shall file a separate Connecticut income tax return or a joint Connecticut income tax return in accordance with the provisions of section 12-702(c)(1)-1.

(1) If a joint Connecticut income tax return is required or permitted to be filed and the enrolled member's spouse has no income, and—

(A) all of the enrolled member's Connecticut adjusted gross income is derived from or connected with sources within Indian country, such member and his or her spouse shall be exempt from Connecticut income tax. They shall file a joint Connecticut income tax return and write "exempt under section 12-702(c)(1)-3(d)(1)" thereon.

(B) only some of the enrolled member's Connecticut adjusted gross income is derived from or connected with sources within Indian country, such member and his or her spouse shall be subject to Connecticut income tax. Their Connecticut income tax liability shall be determined by multiplying their Connecticut income tax liability calculated as if neither of them were an enrolled member by a fraction, the numerator of which is their Connecticut adjusted gross income that is not derived from or connected with sources within Indian country and the denominator of which is their Connecticut adjusted gross income. They shall write "subject to tax under section 12-702(c)(1)-3(d)(1)" on their Connecticut income tax return.

(2) If a joint Connecticut income tax return is required or permitted to be filed and the enrolled member's spouse has income, the enrolled member and his or her spouse shall be subject to Connecticut income tax. Their Connecticut income tax liability shall be determined by multiplying their Connecticut income tax liability calculated as if neither of them were an enrolled member by a fraction, the numerator of which is their Connecticut adjusted gross income that is not derived from or connected with sources within Indian country and the denominator of which is their Connecticut adjusted gross income. They shall write "subject to tax under section 12-702(c)(1)-3(d)(2)" on their Connecticut income tax return.

(3) If a separate Connecticut income tax return is required to be filed, the provisions of subsection (a) of this section shall apply to the enrolled member and the provisions of § 12-702(c)(1)-1(a) shall apply to his or her spouse.

(d) Member not residing in Indian country and married to nonmember. Every enrolled member not residing in Indian country and married to a person who is not an enrolled member shall be subject to Connecticut income tax in the same manner as if neither of them were an enrolled member. Each shall file a separate Connecticut income tax return or a joint Connecticut income tax return in accordance with the provisions of § 12-702(c)(1)-1.

(e) Member residing in Indian country and married to member. Every enrolled member residing in Indian country and married to an enrolled member of the same tribe shall file a separate Connecticut income tax return or a joint Connecticut income tax return in accordance with the provisions of § 12-702(c)(1)-1.

(1) If a joint Connecticut income tax return is required or permitted to be filed by them, and—

(A) all of their Connecticut adjusted gross income is derived from or connected with sources within Indian country, they shall be exempt from Connecticut income tax. They shall file a joint Connecticut income tax return and write "exempt under section 12-702(c)(1)-3(e)(1)" thereon.

(B) only some of their Connecticut adjusted gross income is derived from or connected with sources within Indian country, they shall be subject to Connecticut income tax.

Their Connecticut income tax liability shall be determined by multiplying their Connecticut income tax liability calculated as if neither of them were an enrolled member by a fraction, the numerator of which is their Connecticut adjusted gross income that is not derived from or connected with sources within Indian country and the denominator of which is their Connecticut adjusted gross income. They shall write "subject to tax under section 12-702(c)(1)-3(e)(1)" on their Connecticut income tax return.

(2) If a separate Connecticut income tax return is required to be filed, and—

(A) all of a spouse's Connecticut adjusted gross income is derived from or connected with sources within Indian country, the spouse shall be exempt from Connecticut income tax. The spouse shall file a separate Connecticut income tax return and write "exempt under section 12-702(c)(1)-3(e)(2)" thereon.

(B) only some of a spouse's Connecticut adjusted gross income is derived from or connected with sources within Indian country, the spouse shall be subject to Connecticut income tax. The spouse's Connecticut income tax liability shall be determined by multiplying his or her Connecticut income tax liability calculated as if he or she were not an enrolled member by a fraction, the numerator of which is his or her Connecticut adjusted gross income that is not derived from or connected with sources within Indian country and the denominator of which is his or her Connecticut adjusted gross income. The spouse shall write "subject to tax under section 12-702(c)(1)-3(e)(2)" on his or her Connecticut income tax return.

(f) Member not residing in Indian country and married to member. Every enrolled member not residing in Indian country and married to an enrolled member of the same tribe shall be subject to Connecticut income tax in the same manner as if neither of them were an enrolled member. Each shall file a separate Connecticut income tax return or a joint Connecticut income tax return in accordance with the provisions of § 12-702(c)(1)-1.

(g) Definitions. For purposes of this section:

(1) "Enrolled member" means an enrolled member of a federally recognized tribe.

(2) "Indian country" means Indian country, as defined in 18 U.S.C. § 1151.

(3) "Derived from or connected with sources within Indian country" is to be so construed so as to accord with the definition of the term "derived from or connected with sources within this state" set forth in Part II in relation to the adjusted gross income of a nonresident individual.

(4) "Connecticut adjusted gross income that is not derived from or connected with sources within Indian country" means the difference remaining after Connecticut adjusted gross income derived from or connected with sources within Indian country is subtracted from Connecticut adjusted gross income.

(h) While this section pertains to Section 12-702(c)(1) of the general statutes, for purposes of supplementary interpretation, as the phrase is used in Section 12-2 of the general statutes, the adoption of this section is authorized by Section 12-740(a) of the general statutes.

(Effective November 18, 1994)

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PART VI. Credit for income taxes paid to another jurisdiction