Oregon Administrative Rules › Chapter 150 - DEPARTMENT OF REVENUE › Division 314 - INCOME TAXATION GENERALLY GENERAL PROVISIONS › Section 150-314-0425 - Sales Factor; Definition of Gross Receipts

Current through Register Vol. 63, No. 7, July 1, 2024
(1) This rule adopts provisions of a model
			 regulation recommended by the Multistate Tax Commission to promote uniform
			 treatment of this item by the states. This rule applies to tax years beginning
			 on or after January 1, 2018.
(2)
			 "Gross receipts" are the gross amounts realized (the sum of money and the fair
			 market value of other property or services received) on the sale or exchange of
			 property, the performance of services, or the use of property or capital in a
			 transaction which produces apportionable income, in which the income or loss is
			 recognized (under the Internal Revenue Code (IRC), and, where the income of
			 foreign entities is included in apportionable income, amounts which would have
			 been recognized under the IRC if the relevant transactions or entities were in
			 the United States.) Amounts realized on the sale or exchange of property are
			 not reduced for the cost of goods sold or the basis of property sold.
(3) "Sales" means all gross
			 receipts of the taxpayer that are not allocated under paragraphs of ORS
			 314.625 to
			 314.645 and that are received
			 from transactions and activity in the regular course of the taxpayer's trade or
			 business. The following are additional rules for determining "sales" in various
			 situations:
(a) In the case of a taxpayer
			 engaged in manufacturing and selling or purchasing and reselling goods or
			 products, "sales" includes all gross receipts from the sales of such goods or
			 products (or other property of a kind which would properly be included in the
			 inventory of the taxpayer if on hand at the close of the tax period) held by
			 the taxpayer primarily for sale to customers in the ordinary course of its
			 trade or business. Gross receipts for this purpose means gross sales less
			 returns and allowances. Federal and state excise taxes (excluding sales taxes)
			 will be included as part of such receipts if such taxes are passed on to or
			 collected from the buyer or included as part of the selling price of the
			 product. The exclusion of sales taxes from the sales factor is effective
			 January 1, 2014 and applies to tax years beginning on or after that
			 date.
(b) In the case of cost plus
			 fixed fee contracts, such as the operation of a government-owned plant for a
			 fee, "sales" includes the entire reimbursed cost plus the fee.
(c) In the case of a taxpayer engaged in
			 providing services, such as the operation of an advertising agency or the
			 performance of equipment service contracts or research and development
			 contracts, "sales" includes the gross receipts from the performance of such
			 services, including fees, commissions, and similar items.
(d) In the case of a taxpayer engaged in the
			 sale of equipment used in the taxpayer's trade or business, when the taxpayer
			 disposes of the equipment under a regular replacement program, "sales" includes
			 the gross receipts from the sale of this equipment. For example, a truck
			 express company owns a fleet of trucks and sells its trucks under a regular
			 replacement program; the gross receipts from the sale of the trucks would be
			 included in "sales."
(e) In the
			 case of a taxpayer with insubstantial amounts of gross receipts arising from
			 sales in the ordinary course of business, the insubstantial amounts may be
			 excluded from the sales factor unless their exclusion would materially affect
			 the amount of income apportioned to this state.
(f) The denominator of the sales factor will
			 include the total gross receipts derived by the taxpayer from transactions and
			 activity in the regular course of its trade or business except as provided by
			 ORS 314.610(7) and
			 the rules adopted thereto.
(g)
			 Gross premium receipts. Gross premium receipts are all receipts paid in by the
			 subscribers to the various coverages offered by the company and are assigned to
			 the state of the domicile of the subscriber. In the case of a group policy, the
			 assignment is to the state of the domicile of the employer-agent who collects
			 and remits the premiums to the company.