Oregon Administrative Rules › Chapter 150 - DEPARTMENT OF REVENUE › Division 317 - CORPORATION EXCISE TAX ACT OF 1929: RULES AND GENERAL PROVISIONS › Section 150-317-1050 - Sourcing of Commercial Activity for Financial Institutions in This State

Current through Register Vol. 63, No. 7, July 1, 2024
(1)
General
			 Rule.
Commercial activity for financial institutions is sourced to
			 this state if it is from business conducted in this state. Commercial activity
			 for financial institutions is the items of income as reported on the form
			 required under ORS 317A.100(1)(a)(B)(i)-(iii).
			 The provisions in this rule establish uniform rules for determining whether the
			 items of income as reported on the appropriate form filed by a financial
			 institution are sourced to this state.
(2) A taxpayer may request an alternative
			 method, and the Department of Revenue may require or permit an alternative
			 method under ORS 317A.128(2)-(3).
(3)
Definitions as used in this rule,
			 unless context otherwise requires:
(a) "Billing address" means the location
			 indicated in the books and records of the taxpayer on the first day of the
			 taxable year (or such later dates in the taxable year when the customer
			 relationship began) as the address where any notice, statement, or bill
			 relating to a customer account is mailed.
(b) A borrower "located in this state" means:
(A) A borrower that is engaged in a trade or
			 business that maintains its commercial domicile in this state; or
(B) A borrower that is not engaged in a trade
			 or business whose billing address is in this state.
(c) "Card issuer's reimbursement fee" means
			 the fee a taxpayer receives from a merchant's bank because one of the persons
			 to whom the taxpayer has issued a credit, debit, or similar type of card has
			 charged merchandise or services to the card.
(d) "Credit card" means a card, or other
			 means of providing information, that entitles the holder to charge the cost of
			 purchase, or a cash advance, against a line of credit.
(e) "Debit card" means a card, or other means
			 of providing information, that enables the holder to charge the cost of
			 purchases, or a cash withdrawal, against the holder's bank account or a
			 remaining balance on the card.
(f)
			 "Financial institution" means a person, corporation, or other business entity
			 under ORS 314.610, excluding credit
			 unions.
(g) "Form" means forms FR
			 Y-9 filed by a holding company or a call report filed by a bank
			 organization.
(h) "Items of income"
			 means the individual items reported on the form filed by a holding company or
			 bank organization, or items reported by a nonbank financial organization in
			 accordance with generally accepted accounting principles under ORS
			 314.605. If such individual
			 items are net for the purposes of the form, those individual items are net for
			 the purpose of this tax under ORS
			 317A.100(1)(a)(B)(i)-(iii).
(i) "Loan" means any extension of credit
			 resulting from direct negotiations between the taxpayer and its customer, or
			 the purchase, in whole or in part, of such extension of credit from another.
			 Loans include participations, syndications, and leases treated as loans for
			 federal income tax purposes. Loans do not include: futures or forward
			 contracts; options; notional principal contracts such as swaps; credit card
			 receivables, including purchased credit card relationships; noninterest bearing
			 balances due from other depository institutions; cash items in the process of
			 collection; federal funds sold; securities purchased under agreements to
			 resell; assets held in a trading account; securities; interests in a REMIC, or
			 other mortgage-backed or asset-backed security; and other similar
			 items.
(j) "Loan secured by real
			 property" means that 50 percent or more of the aggregate value of the
			 collateral used to secure a loan or other obligation, when valued at fair
			 market value as of the time the original loan or obligation was incurred, was
			 real property.
(k) "Merchant
			 discount" means the fee (or negotiated discount) charged to a merchant by the
			 taxpayer for the privilege of participating in a program whereby a credit,
			 debit, or similar type of card is accepted in payment for merchandise or
			 services sold to the card holder, net of any cardholder charge-back and
			 unreduced by any interchange transaction or issuer reimbursement fee paid to
			 another for charges or purchases made by its cardholder.
(I) "Participation" means an extension of
			 credit in which an undivided ownership interest is held on a pro-rata basis in
			 a single loan or pool of loans and related collateral. In a loan participation,
			 the credit originator initially makes the loan and then subsequently resells
			 all or a portion of it to other lenders. The participation may or may not be
			 known to the borrower.
(m) "Person"
			 means an individual, estate, trust, partnership, corporation, or any other
			 business entity.
(n) "Principal
			 base of operations" with respect to transportation property means the place of
			 more or less permanent nature from which said property is regularly directed or
			 controlled. With respect to an employee, the "principal base of operations"
			 means the place of more or less permanent nature from which the employee
			 regularly:
(A) Starts his or her work and to
			 which the employee customarily returns in order to receive instructions from
			 the employer; or
(B) Communicates
			 with customers or other persons; or
(C) Performs any other functions necessary to
			 the exercise of the employee's trade or profession at some other point or
			 points.
(o) "Real
			 property owned" and "tangible personal property owned" means real and tangible
			 personal property, excluding coins, currency, or property acquired in lieu of
			 or pursuant to a foreclosure, on which the taxpayer:
(A) May claim depreciation for federal income
			 tax purposes; or
(B) Holds legal
			 title and on which no other person may claim depreciation for federal income
			 tax purposes (or could claim depreciation if subject to federal income
			 tax).
(p) "Regular place
			 of business" means an office at which the taxpayer conducts business in a
			 regular and systematic manner and that is continuously maintained, occupied,
			 and used by employees of the taxpayer.
(q) "State" is defined in ORS
			 314.610(8).
(r) "Syndication" means an extension of
			 credit in which two or more persons fund and each person is at risk only up to
			 a specified percentage of the total extension of credit or up to a specified
			 dollar amount.
(s) "Transportation
			 property" means vehicles and vessels capable of moving under their own power,
			 such as aircraft, trains, water vessels, and motor vehicles, as well as any
			 equipment or containers attached to such property, such as rolling stock,
			 barges, trailers, or the like.