Oregon Administrative Rules › Chapter 150 - DEPARTMENT OF REVENUE › Division 314 - INCOME TAXATION GENERALLY GENERAL PROVISIONS › Section 150-314-0080 - Modified Factors for Carriers of Freight or Passengers: Special Rules - Trucking Companies

Current through Register Vol. 63, No. 7, July 1, 2024
(1) In
			 General. As used in this rule, the term "trucking company" means a motor common
			 carrier, a motor contract carrier, or an express carrier that primarily
			 transports tangible personal property of others by motor vehicle for
			 compensation. Where a trucking company has income from sources both within and
			 without this state, the amount of apportionable income from sources within this
			 state must be determined pursuant to ORS
			 314.610 to
			 314.665 except as modified by
			 this rule. In such cases, the first step is to determine what portion of the
			 trucking company's income constitutes apportionable income and what portion
			 constitutes nonapportionable income under ORS
			 314.610 and the corresponding
			 rules. Nonapportionable income is directly allocable to specific states
			 pursuant to the provisions of ORS
			 314.625 through
			 314.645. Apportionable income is
			 apportioned among the states in which the business is conducted pursuant to the
			 property, payroll, and sales factors set forth in this rule. The sum of (a) the
			 items of nonapportionable income directly allocated to this state plus (b) the
			 amount of apportionable income attributable to this state constitutes the
			 amount of the taxpayer's entire net income which is subject to tax in this
			 state.
(2) Apportionable and
			 Nonapportionable Income. For definitions, rules, and examples for determining
			 apportionable and nonapportionable income, see OAR 150-314-0335 through
			 150-314-0339.
(3) Apportionment of
			 Apportionable Income. 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) In General. The property factor is
			 determined in accordance with ORS
			 314.655, the payroll factor in
			 accordance with ORS 314.660, and the sales factor in
			 accordance with ORS 314.665, except as modified in
			 this rule.
(b) The Property Factor.
(A) Property Valuation. Owned property is
			 valued at its original cost in accordance with ORS
			 314.655(2) and
			 OAR 150-314-0398. Property rented from others is valued at eight times the net
			 annual rental rate in accordance with ORS
			 314.655(2) and
			 OAR 150-314-0400.
(B) General
			 Definitions. The following definitions are applicable to the numerator and
			 denominator of the property factor, as well as other apportionment factor
			 descriptions:
(i) "Average value" of property
			 means the amount determined by averaging the values at the beginning and end of
			 the tax period, but the department may require the averaging of monthly values
			 during the tax period or such averaging as is necessary to properly reflect the
			 average value of the trucking company's property (See OAR
			 150-314-0406).
(ii) "Mobile
			 property" means all motor vehicles, including trailers, engaged directly in the
			 movement of tangible personal property, other than support vehicles used
			 predominantly in a local capacity.
(iii) A "mobile property mile" is the
			 movement of a unit of mobile property a distance of one mile whether loaded or
			 unloaded.
(iv) "Original cost" is
			 deemed to be the basis of the property for federal income tax purposes (prior
			 to any federal income tax adjustments, except for subsequent capital additions,
			 improvements thereto, or partial dispositions); or, if the property has no such
			 basis, the valuation of such property for Interstate Commerce Commission
			 purposes. If the original cost of property cannot be ascertained under the
			 foregoing valuation standards, the property is included in the property factor
			 at its fair market value as of the date of acquisition by the taxpayer. (OAR
			 150-314-0398)
(v) "Property used
			 during the tax period" includes property which is available for use in the
			 taxpayer's trade or business during the tax period.
(C) The Denominator and Numerator of the
			 Property Factor. The denominator of the property factor is the average value of
			 all the taxpayer's real and tangible personal property owned or rented and used
			 during the tax period. The numerator of the property factor is the average
			 value of the taxpayer's real and tangible personal property owned or rented and
			 used in this state during the tax period. In the determination of the numerator
			 of the property factor, all property, except mobile property as defined in this
			 rule, is included in the numerator of the property factor in accordance with
			 ORS 314.655 and the corresponding
			 rules. Mobile property as defined in this rule, which is located within and
			 without this state during the tax period is included in the numerator of the
			 property factor in the ratio which mobile property miles in the state bear to
			 the total mobile property miles.
(c) The Payroll Factor. The denominator of
			 the payroll factor is the compensation paid everywhere by the taxpayer during
			 the tax period for the production of apportionable income (see ORS
			 314.660 and the corresponding
			 rules.). The numerator of the payroll factor is the total compensation paid in
			 this state during the tax period by the taxpayer. With respect to all
			 personnel, except those performing services within and without this state,
			 compensation paid to such employees is included in the numerator as provided in
			 ORS 314.660 and the corresponding
			 rules. With respect to personnel performing services within and without this
			 state, compensation paid to such employees is included in the numerator of the
			 payroll factor in the ratio which their services performed in this state bear
			 to their services performed everywhere based on mobile property
			 miles.
(d) The Sales Factor.
(A) In General. All sales derived from
			 transactions and activities in the regular course of the taxpayer's trade or
			 business which produce apportionable income are included in the denominator of
			 the sales factor (see ORS
			 314.665(1) and
			 OAR 150-314-0425). The numerator of the sales factor is the total sales of the
			 taxpayer in this state during the tax period. The total state sales of the
			 taxpayer, other than sales from hauling freight, mail, and express, are
			 attributable to this state in accordance with ORS
			 314.665 and the corresponding
			 rules.
(B) Numerator of the Sales
			 Factor from Freight, Mail, and Express. The total sales of the taxpayer
			 attributable to this state during the tax period from hauling freight, mail,
			 and express is:
(i) Intrastate: All sales
			 from any shipment which both originates and terminates within this state;
			 and,
(ii) Interstate: That portion
			 of the sales from movements or shipments passing through, into, or out of this
			 state as determined by the ratio which the mobile property miles traveled by
			 such movements or shipments in this state bear to the total mobile property
			 miles traveled by movements or shipments from points of origin to
			 destination.