Effectively connected income

The term” effectively connected income” means income, gain, or loss that is effectively connected with the conduct of a trade or business within the United States as determined under IRC section 882 in the case of an alien corporation that under any provision of the IRC is not treated as a domestic corporation as defined in IRC section 7701. It includes income, gain, or loss that is described in section 208(9)(b) and excluded from Federal taxable income under any provision of Federal law, including under a United States treaty obligation, that would be treated, in the absence of such exclusion, as effectively connected with the conduct of a trade or business within the United States. Income, gain, or loss excluded from Federal taxable income under a United States treaty obligation will be deemed to be treated as effectively connected with the conduct of a trade or business within the United States unless such treaty prohibits state taxation of such income, gain, or loss.