Or. Admin. R. 150-317-0520 - Direct or Indirect Relationships

Current through Register Vol. 61, No. 4, April 1, 2022

In determining whether a unitary business exists, all direct and indirect relationships may be considered. This is true even when the relationships extend to corporations not includable in the consolidated return.

Example 1: Corporation M is a U.S. company engaged in the marketing of oil and oil products. It has two wholly-owned domestic subsidiaries, Corporations E and R. Corporation E is a drilling company involved in exploration for oil. Corporation R buys the crude oil from E, refines it, and sells the refined oil to M. Although the operations of Corporations E and M are not directly related, they are part of a unitary business by virtue of their indirect relationship through Corporation R.
Example 2: Assume the same facts as in Example 1, except that the refining company, Corporation R, is jointly owned by Corporation M and another oil company (50 percent each). Although Corporation R is no longer includable in the consolidated return (due to less than 80 percent ownership), Corporations E and M are still considered part of a unitary business.
Example 3: Assume the same facts as in Example 1, except that the refining company, Corporation R, is a foreign subsidiary of Corporation M doing business only in Mexico. In determining whether Corporations E and M are part of a unitary business, the relationships and transactions with Corporation R may be considered.


Or. Admin. R. 150-317-0520
10-7-85, 12-31-85, Renumbered from 150-317.705; 12-31-86; REV 10-2007, f. 12-28-07, cert. ef. 1-1-08; Renumbered from 150-317.705(3)(b), REV 69-2016, f. 8-15-16, cert. ef. 9/1/2016; REV 71-2017, amend filed 12/22/2017, effective 1/1/2018

Statutory/Other Authority: ORS 305.100

Statutes/Other Implemented: ORS 317.705

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