Oregon Administrative Rules
Chapter 150 - DEPARTMENT OF REVENUE
Division 316 - PERSONAL INCOME TAX GENERAL PROVISIONS
Section 150-316-0185 - Gross Income of Nonresidents: Waterway Workers
Universal Citation: OR Admin Rules 150-316-0185
Current through Register Vol. 63, No. 9, September 1, 2024
(1) General Policy. The State of Oregon imposes taxes on Oregon source income of nonresidents to the extent allowed under Oregon and federal law and exempts Oregon source income of nonresidents to the extent provided under federal law: 46 USCA 11108. Under both federal and state law, compensation of a nonresident waterway worker is exempt from Oregon taxation to the extent the compensation is paid to an individual engaged on a vessel and performing assigned duties as a licensed pilot in more than one State or to an individual performing regularly assigned duties while engaged as a master, officer, or crewman on a vessel operating on the navigable waters in two or more states.
(2) For purposes of ORS 316.127(10) and this rule:
(a) "Master" is the commander of a
merchant vessel, who is in charge of the vessel, its crew, its passengers, and
the care and control of the vessel and cargo.
(b) "Member of a crew" or "crew member" is an
individual carried on board a vessel who is not required to obtain a license
(though they may be required to obtain certification) who provides services
such as navigation and maintenance of the vessel, its machinery, systems, or
services essential for propulsion and safe navigation or to provide services
for passengers on board.
(c)
"Navigable waters" are waters that are subject to the ebb and flow of the tide
and waters that are presently used, or were used in the past, to transport
interstate or foreign commerce.
(d) "Officer" is an individual carried on
board the vessel who must obtain a specialized license and who provides
navigation and maintenance of the vessel, its machinery, systems, and
arrangements essential for propulsion and safe navigation.
(e) "Passenger" is a person on board a vessel
other than:
(A) The master, a member of the
crew, or other person employed or engaged in any capacity in the business of
the vessel; or
(B) A child under
one year of age.
(f)
"Regularly assigned duties" are those duties performed on a regular basis (i.e.
daily, weekly, or monthly). Duties that are performed on sporadically or
intermittently as occurs when serving on an "on-call" or "as-needed" basis are
not "regularly assigned duties."
(g) "Vessel" is watercraft used, or capable
of being used, as a means of transportation on navigable waters in 2 or more
states for business purposes.
(h)
"Waterway worker" is a nonresident who is:
(A) Engaged on a vessel to perform assigned
duties in more than one State as a pilot licensed under section 7101 of Title
46 of the United States Code or licensed or authorized under the laws of a
State, or
(B) An individual who
performs regularly assigned duties while engaged as a master, officer, or
member of a crew on a vessel operating on the navigable waters in two or more
states.
Example 1: Ben, a resident of
Washington, is a crew member and works on a dredging vessel on the Willamette
River in Oregon and the Cowlitz River in Washington six months of the year. The
other six months of the year Ben works in the company's office in Portland,
Oregon. Only six months of compensation from his employer is exempt because
it's for services Ben performed on the dredging vessel and is not taxable by
Oregon. The remaining six months of compensation is taxable by
Oregon.
Example 2: Kirk, a
nonresident, works for a log mill located on the Oregon shore of the Columbia
River. He spends 6 hours a day piloting a tugboat on the river carrying logs to
the mill. For the remaining 2 hours of his shift, he works in the mill doing
maintenance on mill equipment as well as other tasks. Kirk's compensation for
his time working on the tugboat is not subject to Oregon tax. However, the time
he spent working in the mill in Oregon is Oregon-source income and subject to
Oregon tax. Kirk may exclude 75 percent (6 divided by 8) of his total
compensation from this employer from Oregon taxation. He will only report 25
percent of his wages in the Oregon column of his nonresident return.
Example 3: Remy, a nonresident, is a crew
member and works on a vessel plying the Columbia and Willamette rivers. Remy
makes weekly trips from Hood River to Tualatin and back, hauling cargo on the
vessel. Each trip entails three days on the Columbia River and two days on the
Willamette River. All of Remy's income is exempt and is not taxable to Oregon.
Example 4: Jim, a nonresident,
works in Oregon for a water transportation company that plies the waters of the
Columbia River. On occasion, he is called upon to work as a member of a crew
for a full day on one of the company's vessels when they are short-handed. His
income is taxable by Oregon, even for the days he works on the vessel, because
his work on the vessel is on an as-needed, sporadic, or intermittent basis.
Example 5: Ken, a Washington
resident, works in Oregon as a manager for a water transportation company whose
two vessels traverse the Columbia River. Once every quarter, Ken boards the
company's vessels to check on the employees working on the vessel. Ken's income
is taxable by Oregon, even for the days that he spends on board a vessel
because he is not a pilot, master, officer, or crew member of the
vessel.
Stat. Auth.: ORS 305.100
Stats. Implemented: ORS 316.127
Disclaimer: These regulations may not be the most recent version. Oregon may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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