Oregon Administrative Rules › Chapter 150 - DEPARTMENT OF REVENUE › Division 314 - INCOME TAXATION GENERALLY GENERAL PROVISIONS › Section 150-314-0082 - Modified Factors for Companies Engaged in Sea Transportation Service

Current through Register Vol. 63, No. 7, July 1, 2024
(1) Sea
			 transportation services within this rule include the activities of steamship
			 companies substantially engaged in interstate or international commerce which
			 derive income within and partly from sources without the state. They do not
			 include the activities of water transportation carriers operating mainly on the
			 Columbia and Willamette Rivers or water transportation carriers operating
			 primarily within Oregon waters.
(2)
			 The Oregon income of a taxpayer carrying on the business of sea transportation
			 services must be determined pursuant to ORS
			 314.610 to
			 314.665 except as modified by
			 this rule. Apportionable income is apportioned to this state by use of the
			 formula provided in ORS
			 314.650 as it applies to the tax
			 year involved. For tax years beginning on or after July 1, 2005, ORS
			 314.650 provides for
			 apportionment using only the sales factor.
(a) Property factor. The property factor is a
			 fraction, the denominator of which includes the value of all real and tangible
			 personal property, including ships owned, rented or leased by the taxpayer and
			 used in the business. The numerator of this factor includes all real and
			 personal property owned, rented, or leased by the taxpayer and used in the
			 business, except ships, to the extent such assets are located in the state, and
			 so much of the value of ships used in the business as is determined by applying
			 the ratio that the voyage time which the ship was within this state during the
			 tax period bears to the total voyage time of the ship during the tax period.
(A) The value of ships used in the business
			 but not owned by the user, such as bareboat chartered vessels, is the same as
			 their value for insurance purposes. There are generally three types of
			 charters.
(i) "Bareboat" charters. The
			 owner-charterer places the tanker at the complete use and control of the user.
			 All operating costs are borne by the user, and the charter fee is purely for
			 the use of the vessel. Bareboat charters are included in the property
			 factor.
(ii) "Time and Demise"
			 (long-term) charters. The owner-charterer provides, in addition to the vessel,
			 all operational costs at the instruction of the user. Time and demise charter
			 fees include a component for operating costs borne by the owner-charterer, such
			 as insurance, port and docking fees, crew and master wages, fuel, and repairs.
			 Time and demise charters are considered the purchase of transportation and are
			 not included in the property factor.
(iii) "Single Voyage" charters. These are
			 actually purchased transportation services that take the form of a charter. The
			 owner-charterer has complete use and control of the vessel and merely contracts
			 to deliver product between one or more ports of loading and discharge. Single
			 voyages may be arranged on a consecutive voyage basis. Single voyage charters
			 are not included in the property factor.