Oregon Adopts Market-Based Sourcing Method

On July 3, 2017, the Oregon Governor signed Senate Bill 28, adding new provisions to Or. Rev. Stat. § 314.605 to 314.675, relating to the apportionment of corporate income.

The new law replaces the cost-of-performance sourcing method with the market-based sourcing method for purposes of determining the sales factor applicable to intangible property and services, as used in the Oregon corporate excise tax apportionment calculation.

In addition, the new law requires all members of an affiliated group of corporations to be treated as a single taxpayer, and sales of all members are required to be included in the numerator for computation of the Oregon apportionment percentage, if any member is taxable in Oregon (also known as the “Finnigan” approach).

The provisions apply to tax years beginning on or after January 1, 2018.

For questions about these law changes or other state and local tax matters, please contact us. 

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