Bill Text: OR SB543 | 2013 | Regular Session | Introduced

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Bill Title: Relating to corporate apportionment; prescribing an effective date.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Failed) 2013-07-08 - In committee upon adjournment. [SB543 Detail]

Download: Oregon-2013-SB543-Introduced.html

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     77th OREGON LEGISLATIVE ASSEMBLY--2013 Regular Session

NOTE:  Matter within  { +  braces and plus signs + } in an
amended section is new. Matter within  { -  braces and minus
signs - } is existing law to be omitted. New sections are within
 { +  braces and plus signs + } .

LC 3089

                         Senate Bill 543

Sponsored by Senator GEORGE

                             SUMMARY

The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.

  Provides exception, based on amount of annual sales, to general
rule that sale made to purchaser in state where taxpayer is not
taxable is considered sale in Oregon for apportionment of
business income for corporate income tax purposes.
  Applies to tax years beginning on or after January 1, 2014.
  Takes effect on 91st day following adjournment sine die.

                        A BILL FOR AN ACT
Relating to corporate apportionment; creating new provisions;
  amending ORS 314.665; and prescribing an effective date.
Be It Enacted by the People of the State of Oregon:
  SECTION 1. ORS 314.665 is amended to read:
  314.665. (1) As used in ORS 314.650, the sales factor is a
fraction, the numerator of which is the total sales of the
taxpayer in this state during the tax period, and the denominator
of which is the total sales of the taxpayer everywhere during the
tax period.
  (2) Sales of tangible personal property are in this state if:
  (a) The property is delivered or shipped to a purchaser, other
than the United States Government, within this state regardless
of the f.o.b. point or other conditions of the sale; or
  (b) The property is shipped from an office, store, warehouse,
factory, or other place of storage in this state and the
purchaser is the United States Government or the taxpayer is not
taxable in the state of the purchaser. For purposes of this
paragraph:
  (A) The sale of goods shipped from a public warehouse is not
considered to take place in this state if:
  (i) The taxpayer's only activity in Oregon is the storage of
the goods in the public warehouse prior to shipment; or
  (ii) The taxpayer's only activities in Oregon are the storage
of the goods in the public warehouse prior to shipment and the
presence of employees within this state solely for purposes of
soliciting sales of the taxpayer's products; and
  (B) 'Taxpayer' means a taxpayer as defined in section 7701 of
the Internal Revenue Code, an affiliate of the person storing
goods in a public warehouse or a person that is related under
section 267 of the Internal Revenue Code to the person storing
goods in a public warehouse.

  (3) Subsection (2)(b) of this section   { - shall - }
 { + does + } not apply to sales of tangible personal property
if:
  (a) { + (A) + } The sales are included in the numerator of a
formula used to apportion business income to another state of the
United States, a foreign country or the District of Columbia; and
    { - (b) - }   { + (B) + } The other state, a foreign country
or the District of Columbia has imposed a tax on or measured by
the apportioned business income  { - . - }  { + ; or
  (b) The taxpayer is not taxable in the state of the purchaser
and makes annual sales to purchasers outside this state of $25
million or less. + }
  (4) Sales, other than sales of tangible personal property, are
in this state if { + : + }
  (a) The income-producing activity is performed in this state;
or { + : + }
  (b) The income-producing activity is performed both in and
outside this state and a greater proportion of the
income-producing activity is performed in this state than in any
other state, based on costs of performance.
  (5) Where the sales apportionment factor is determined by
administrative rule pursuant to ORS 314.682, 314.684, 317.660 or
other law, the Department of Revenue shall adopt rules that are
consistent with the determination of the sales factor under this
section.
  (6) For purposes of this section, 'sales':
  (a) Excludes gross receipts arising from the sale, exchange,
redemption or holding of intangible assets, including but not
limited to securities, unless those receipts are derived from the
taxpayer's primary business activity.
  (b) Includes net gain from the sale, exchange or redemption of
intangible assets not derived from the primary business activity
of the taxpayer but included in the taxpayer's business income.
  (c) Excludes gross receipts arising from an incidental or
occasional sale of a fixed asset or assets used in the regular
course of the taxpayer's trade or business if a substantial
amount of the gross receipts of the taxpayer arise from an
incidental or occasional sale or sales of fixed assets used in
the regular course of the taxpayer's trade or business.
Insubstantial amounts of gross receipts arising from incidental
or occasional transactions or activities may be excluded from the
sales factor unless the exclusion would materially affect the
amount of income apportioned to this state.
  (7) The department may determine that a warehouse that meets
the definition of 'public warehouse' under this section may not
be treated as a public warehouse if the warehouse is being used
primarily for tax avoidance purposes or if transactions related
to the use of the warehouse are primarily for tax avoidance
purposes.
  (8) As used in this section, 'public warehouse':
  (a) Means a warehouse owned or operated by a person that does
not own the goods stored in the warehouse; and
  (b) Does not include a warehouse that is owned by a person that
is related to the person that owns goods that are stored in the
warehouse, as determined under section 267 of the Internal
Revenue Code, or an affiliate of the person that owns goods that
are stored in the warehouse.
  SECTION 2.  { + The amendments to ORS 314.665 by section 1 of
this 2013 Act apply to tax years beginning on or after January 1,
2014. + }
  SECTION 3.  { + This 2013 Act takes effect on the 91st day
after the date on which the 2013 regular session of the
Seventy-seventh Legislative Assembly adjourns sine die. + }
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