04 Income attributable to tribal land. For purposes of subsection .03(B) above the

following apply: A. Generally. Income received by a tribal member is attributable to tribal land when the income is derived from or connected with sources on tribal land. The itemized and standard deductions, credits, income modifications, and personal exemptions apply to tribal members in accordance with Maine law. A loss is sourced to tribal land in the same manner that a gain is sourced to tribal land. B. Compensation for personal services derived from or connected with sources on tribal land. Personal services compensation derived from or connected with sources on tribal land is the income derived from personal services performed on tribal land. Compensation includes, but is not limited to, wages, salaries, taxable benefits such as annual and sick leave, commissions, fees, and payment in kind. Personal services compensation attributable to tribal land includes sick time and vacation time earned while working on tribal land. Compensation for personal services is includable for purposes of this subsection unless it is excluded from “gross income” under the Internal Revenue Code. For example, amounts withheld by an employer for federal and state income taxes, FICA contributions, medical insurance plans, or other similar payroll deductions are considered compensation for personal services. Unemployment compensation received by a tribal member that is derived from employment on tribal land is attributable to tribal land. Generally, incentive stock options, nonstatutory stock options, and employee stock purchase plans are compensation for personal services in the amount that represents the fair market value of the stock on the date exercised (i.e., when the employee has purchased the stock) that exceeds the option price of the stock at the time the option is granted. Income from stock option plans reported as capital gains on the federal income tax return is, for purposes of this paragraph, compensation from personal services. If the period between the grant of a stock option and the exercise of the option straddles employment on and off tribal land, the amount attributable to employment on tribal land must be determined in accordance with section .05(B) below and the amount so determined is compensation derived from or connected with sources on tribal land for the same taxable year that the income is included in federal adjusted gross income. C. Income from a trade or business. All income derived from or connected with the carrying on of a trade or business on tribal land is income sourced to tribal land. Generally, a tribal member has a trade or business if: 18-125 Chapter 825 Page 14 1. The tribal member, directly or through agents or employees or through a pass-through entity in which the tribal member is a shareholder, member, or partner, maintains or operates or shares in maintaining or operating a desk, room, office, shop, store, warehouse, factory, or any other place on tribal land where business affairs are systematically and regularly conducted; or 2. The tribal member, directly or through agents or employees or through a pass-through entity in which the tribal member is a shareholder, member, or partner, is present for business on tribal land on other than a systematic or regular basis and earns or derives gross income during the taxable year from contractual or sales-related activities. D. Income from ownership of real or tangible personal property. All income derived from the ownership of real or tangible personal property located on tribal land is income sourced to tribal land; however, unless the property was employed in a business, trade, profession, or occupation carried on within tribal land, interest income earned from the sale of such property is not subject to sourcing to tribal land. Income sourced to tribal land includes rents derived from and gains from a federally taxable sale or exchange of: 1. Real property located on tribal land; 2. Tangible personal property having a situs on tribal land; or 3. Any interest in a time-share or similar arrangement on tribal land.