Or. Admin. R. 150-314-0380 - Allocation of Interest and Dividends

(1) Where it appears to the department that a corporation using the apportionment method is improperly using interest deductions to avoid Oregon tax, the corporation will be required to include in apportionable income interest received to the extent of the deduction claimed for interest paid. See U.P.R.R. Co. et al v. Oregon State Tax Comm., 240 Or 628, 402 P2d 519 (June 3, 1965).

(2) Nonapportionable dividends are subtracted from modified federal income to compute apportionable income. The subtraction is net of the Oregon dividend deduction claimed for such dividends under ORS 317.267. Nonapportionable dividends allocated to Oregon, net of the Oregon dividend deduction, is added to income apportioned to Oregon.

Example:In 2017, Corporation D received $30,000 in dividends, $10,000 of which were nonapportionable dividends allocable to Oregon. Corporation D owned less than 20 percent of the stock in the corporations paying the dividends, so a 70 percent dividend received deduction is allowed on the Oregon return. In the computation of Oregon taxable income, $3,000 of nonapportionable dividends (net of the dividend deduction) are subtracted from net income before apportionment and then added to income apportioned to Oregon. The $3,000 is computed as follows:[See PDF link below.]

Notes

Or. Admin. R. 150-314-0380

1-65; 6-68; RD 9-1992, f. 12-29-92, cert. ef. 12-31-92; Renumbered from 150-314.640, REV 35-2016, f. 8-12-16, cert. ef. 9/1/2016; REV 25-2017, f. & cert. ef. 6/28/2017; REV 68-2017, amend filed 12/22/2017, effective 1/1/2018

Publications: Contact the Oregon Department of Revenue to learn how to obtain a copy of the publication referred to or incorporated by reference in this rule pursuant to ORS 183.360(2) and 183.355(1)(b).

To view tables referenced in rule text, click here to view rule.

Statutory/Other Authority: ORS 305.100

Statutes/Other Implemented: ORS 314.640