2007 ORS 314.280¹
Allocation of income of financial organization or public utility from business within and without state
  • rules
  • alternative apportionment for electing utilities or telecommunications taxpayers

(1) If a taxpayer has income from business activity as a financial organization or as a public utility (as defined respectively in ORS 314.610 (Definitions for ORS 314.605 to 314.675) (4) and (6)) which is taxable both within and without this state (as defined in ORS 314.610 (Definitions for ORS 314.605 to 314.675) (8) and 314.615 (When allocation of income from business activity required)), the determination of net income shall be based upon the business activity within the state, and the Department of Revenue shall have power to permit or require either the segregated method of reporting or the apportionment method of reporting, under rules and regulations adopted by the department, so as fairly and accurately to reflect the net income of the business done within the state.

(2) The provisions of subsection (1) of this section dealing with the apportionment of income earned from sources both within and without the State of Oregon are designed to allocate to the State of Oregon on a fair and equitable basis a proportion of such income earned from sources both within and without the state. Any taxpayer may submit an alternative basis of apportionment with respect to the income of the taxpayer and explain that basis in full in the return of the taxpayer. If approved by the department that method will be accepted as the basis of allocation.

(3)(a) Apportionment rules adopted by the department under this section must apply the weightings used in ORS 314.650 (Business income apportionment) to comparable factors used to apportion income from business activity of taxpayers subject to this section.

(b) Notwithstanding paragraph (a) of this subsection, a taxpayer primarily engaged in utilities or telecommunications may elect to have income from business activity apportioned by applying the weightings used in ORS 314.650 (Business income apportionment) (1999 Edition) to comparable factors used to apportion such income.

(c) The election shall be made in the time and manner prescribed by the department by rule. The election shall continue in force and effect for the tax year for which the election is made and for each subsequent tax year until the year in which the taxpayer revokes the election.

(d) An electing taxpayer may revoke the taxpayer’s election by filing a revocation of election in the time and manner prescribed by the department. The revocation shall apply to the tax year following the year in which the election is made and to each subsequent tax year.

(e) As used in this subsection:

(A) "Telecommunications" means business operations that conduct, maintain or provide for the transmission of voice data and text between network termination points and telecommunications reselling. Transmission facilities may be based on one technology or a combination of technologies.

(B) "Utilities" means business operations that provide electric power, natural gas, steam supply, water supply or sewage removal through a permanent infrastructure of lines, mains and pipes. [1957 c.632 §4 (enacted in lieu of 316.205 and 317.180); 1963 c.319 §1; 1965 c.152 §22; 2001 c.933 §1]

Notes of Decisions

Appor­tion­ment

The Depart­ment of Revenue was free to change its rules relating to the three factor formula for financial organiza­tions when such change did not result in an improper alloca­tion to Oregon. Equitable Sav. and Loan Assn. v. Dept. of Rev., 5 OTR 661 (1975)

Use of presump­tion that alloca­tion method of reporting fairly represents net income from in-state business activities of utilities is invalid. Fisher Broadcasting, Inc. v. Dept. of Rev., 321 Or 341, 898 P2d 1333 (1995)

Chapter 314

Law Review Cita­tions

9 WLJ 249 (1973); 5 EL 516 (1975)

1 Legislative Counsel Committee, CHAPTER 314—Taxes Imposed Upon or Measured by Net Income, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­314.­html (2007) (last ac­cessed Feb. 12, 2009).
 
2 Legislative Counsel Committee, Annotations to the Oregon Revised Stat­utes, Cumulative Supplement - 2007, Chapter 314, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­314ano.­htm (2007) (last ac­cessed Feb. 12, 2009).
 
3 OregonLaws.org assembles these lists by analyzing references between Sections. Each listed item refers back to the current Section in its own text. The result reveals relationships in the code that may not have otherwise been apparent.