2017 ORS 317.660¹
Allocation of net income where insurer has both in-state and out-of-state business

(1)(a) If the income of an insurer is derived from business done both within and without this state, the determination of Oregon taxable income shall be arrived at by multiplying the insurer’s net income by the insurance sales factor.

(b) The insurance sales factor shall consist of a fraction, the numerator of which is the amount of direct premiums (excluding reinsurance accepted and without deduction of reinsurance ceded) received or earned by the insurer during the tax year on policies and contracts that are allocated to this state and to other jurisdictions in which the insurer is not authorized to do business, and the denominator of which is the total of such premiums received or earned by the insurer during the tax year on policies and contracts that had been sold within and without this state.

(2) For purposes of this section:

(a) “Net income” means net income properly recorded in the statement of income reported in the annual statement filed by the insurer with the Director of the Department of Consumer and Business Services.

(b) “Premiums” means sums properly included in those schedules of the annual statement filed by the insurer with the Director of the Department of Consumer and Business Services that appropriately allocate premiums by jurisdiction. If the exclusion of reinsurance premiums results in an insurance sales factor that does not fairly represent the extent of the taxpayer’s activity in this state, the taxpayer may petition for and the Department of Revenue may permit, or the Department of Revenue may require, the inclusion of reinsurance premiums in the insurance sales factor. If the annual statement of the insurer does not report received premiums then the insurance sales factor shall be determined based on earned premiums.

(3) If application of the apportionment formula described in subsection (1) of this section results in an apportionment that does not fairly and equitably represent the taxpayer’s insurance business activity in this state, the taxpayer may petition the Department of Revenue for and the department may permit, or the department may require, to achieve an apportionment that fairly and equitably represents the taxpayer’s insurance business activity:

(a)(A) The exclusion of the insurance sales factor; and

(B) The inclusion of one or more additional factors that will fairly and equitably represent the taxpayer’s business activity in this state;

(b) The inclusion of the insurance sales factor and one or more additional factors that will fairly and equitably represent the taxpayer’s business activity in this state; or

(c) The employment of any other method to achieve a fair and equitable apportionment of the taxpayer’s income. [Formerly 317.199; 1995 c.786 §17; 1999 c.143 §11; 2007 c.716 §§1,3]

Notes of Decisions

Where applica­tion of appor­tion­ment formula to income of particular taxpayer violates due process, lack of authorized alternative formula prevents collec­tion of tax beyond min­i­mum tax under ORS 317.090 (Minimum tax). Stonebridge Life Insurance Co. v. Dept. of Revenue, 18 OTR 423 (2006), on reconsidera­tion 18 OTR 461 (2006)

Chapter 317

Notes of Decisions

Congress is empowered by Commerce Clause, U.S. Const. Art. I, Sec­tion VIII, to place three year moratorium on “doing business” taxes imposed by states on federally insured savings and loan associa­tions which do not have their principal place of business in taxing state. Pac. First Fed. Savings & Loan v. Dept. of Rev., 293 Or 138, 645 P2d 27 (1982)

For purposes of claim preclusion, all issues re­gard­ing taxpayer’s corporate excise tax liability for tax year constitute same claim. U.S. Bancorp v. Dept. of Revenue, 15 OTR 13 (1999)

1 Legislative Counsel Committee, CHAPTER 317—Corporation Excise Tax, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ors317.­html (2017) (last ac­cessed Mar. 30, 2018).
 
2 Legislative Counsel Committee, Annotations to the Oregon Revised Stat­utes, Cumulative Supplement - 2017, Chapter 317, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ano317.­html (2017) (last ac­cessed Mar. 30, 2018).
 
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.