(1) For purposes of this rule:
(a) "No activity" means that the foreign
corporation has no property or employees carrying on the business of the
corporation in Oregon. Telephone and catalog solicitation and delivery by
common carrier of goods sold do not constitute activity in the state.
(b) "Due process nexus" arises,
for purposes of this rule, when a corporation engages in activities in this
state that are protected from state taxation by
Public Law 86-272. The
protection provided by
Public Law 86-272 applies to taxpayers whose only Oregon
activity is the solicitation of sales of tangible personal property.
(c) "Jurisdiction to tax" is acquired by
Oregon, for purposes of this rule, when a corporation engages in activities in
this state that are not protected from state taxation by
Public Law 86-272,
e.g., maintaining an office or warehouse in Oregon, salespersons who accept
orders or payment, etc.
(2) The numerator of the sales factor shall
include gross receipts attributable to this state and derived by the taxpayer
from transactions and activity in the regular course of its trade or business.
All interest income, service charges, carrying charges, or time-price
differential charges incidental to such gross receipts shall be included
regardless of the place where the accounting records are maintained or the
location of the contract or other evidence of indebtedness.
(3) If a foreign corporation has no activity
in Oregon prior to the date Oregon acquires jurisdiction to tax, the numerator
of the sales factor shall only include Oregon sales from the date Oregon
acquired jurisdiction to tax.
Example: Corporation A operates on a calendar year
basis. From the beginning of 1988, Corporation A of California solicited sales
in Oregon by telephone and delivered its product by common carrier. On
September 1, 1988, Corporation A sent salespersons into Oregon to take and
approve orders, accept payment, and handle complaints and returns. Corporation
A shall include sales from September 1, 1988 through the end of 1988 in the
numerator of the sales factor.
(4) If a foreign corporation had due process
nexus in Oregon and Oregon acquired jurisdiction to tax during the year, the
numerator of the sales factor shall include sales from the date due process
nexus arose or the beginning of the tax year, whichever is later.
Example: Corporation B of Washington began sending
missionary salespersons to Oregon to merely solicit sales in July, 1987.
Corporation B operates on a calendar year basis. On September 1, 1988,
Corporation B added collection of payment and maintenance of a small inventory
to the duties of its salespersons. Corporation B shall include sales for the
entire 1988 tax year in its sales factor numerator.
(5) If a foreign corporation had no prior
activity in Oregon and due process nexus arose during the tax year, and later
during the tax year Oregon acquired jurisdiction to tax, the numerator of the
sales factor shall include sales from the date due process nexus arose.
Example: Corporation C of Idaho has had catalog
sales in Oregon, shipped via common carrier since 1970. Corporation C operates
on a calendar year basis. On June 1, 1988, Corporation C sent salespersons into
Oregon to merely solicit sales. On September 1, 1988, Corporation C authorized
the salespersons to approve sales and accept payment. Sales from June 1, 1988,
through the end of 1988 shall be included in the numerator of the sales
factor.
Notes
Or. Admin. R.
150-314-0427
12-70; RD
7-1989, f. 12-18-89, cert. ef. 12-31-89; RD 3-1995, f. 12-29-95, cert. ef.
12-31-95; Renumbered from 150-314.665(1)-(B),
REV
35-2016, f. 8-12-16, cert. ef.
9/1/2016
Stat. Auth.: ORS
305.100
Stats. Implemented: ORS
314.665
