Court Opinion

ID: 3843330
Source: CourtListenerOpinion
Date Created: 2016-07-06 08:12:10.564018+00
Date Added: 2024-06-11T07:40:39.553922
License: Public Domain

Decision on the motion for plaintiff rendered February 3, 1965.
Defendant has moved the court for a rehearing in *Page 99 
this case to obtain the court's determination of the following questions:
1. Did the court find in its earlier decision that the taxpayer was "doing business" in the State of Washington?
2. Did the court mean that "doing business" is something other than "nexus" or is "nexus" sufficient to require apportionment?
3. Did the court find that the taxpayer was doing sufficient business to be taxable in Washington, if Washington had Oregon's excise tax law, chapter 317?
4. Did the court find that the taxpayer had sufficient nexus to be taxable in Washington, if Washington had Oregon's income tax law, chapter 318?
5. If the court considered PL 86-272 to be operative, would the decision have been different, or does the effectiveness of PL 86-272 have any relationship to this case?
6. Does the court find that, if tax jurisdiction is present in a foreign state, it is required to find that Oregon must allocate the income of a domestic corporation?
This court in its earlier decision found that plaintiff was "doing business" as that term is defined in the Oregon Corporation Excise Tax law, ORS 317.010(8). This is an extremely broad definition. It is not the definition applied by the United States Supreme Court in determining the constitutionality of a state corporation excise tax upon a foreign corporation engaged in interstate commerce. SpectorMotor Service, Inc. v. O'Connor, 340 U.S. 602, 71 S Ct 508,95 L Ed 573 (1951). The Supreme Court's definition is much more restrictive.
However, the question presented by this case is the interpretation of the Oregon Corporation Excise *Page 100 
Tax law and its application to a domiciliary corporation. ORS317.010(8) has not been amended or reappealed since theSpector decision in 1951. It is still the law in this jurisdiction, unless the constitutional issue presented inSpector arises. That constitutional issue does not affect the application of the allocation formula under the Oregon Corporation Excise Tax law with respect to domestic corporations.
The statutory language which permits allocation contained in ORS 314.280(1) allows allocation if the corporation's gross income is "derived from business done within and without the state." Doing business is defined by ORS 317.010(8). Within that definition plaintiff was doing business in the State of Washington.
3. In answer to the second question, this court determines that "doing business" is not coterminous with "nexus", though "doing business" is sufficient to establish "nexus."
By the answers to the first two questions, this court has answered questions 3 and 4.
This court has held PL 86-272 to be unconstitutional. At this writing this court has not been reversed by any higher court. Therefore, for the purposes of this case, PL 86-272 is deemed inapplicable. But in view of ORS 317.010(8), this court questions the applicability of PL 86-272 to this problem, if that statute is constitutional.
The last question presented does not need to be decided in this case. As yet, the United States Supreme Court has not been squarely faced with the question raised. However, this court has some concern as to the constitutionality of a corporation excise tax upon either a domestic or a foreign corporation engaged in interstate commerce. In Northwestern State's *Page 101 Portland Cement Company v. Minnesota, 358 U.S. 450, 79 S Ct 357,3 L ed2d 421, 67 ALR2nd 1292 (1959), the court laid a great deal of stress upon the fact that multiple state taxation was not shown in that case and indicated that such multiple state taxation would be an undue burden. It distinguished StandardOil Co. v. Peck, 342 U.S. 382, 72 S Ct 309, 96 L ed 427, 26 ALR2d 1317 (1952), from Northwest Airline, Inc. v. Minnesota,322 U.S. 292, 64 S Ct 950, 88 L ed 1283, 153 ALR 245 (1944), upon this very ground. In the light of Supreme Court decisions in the recent past, this court is not in a position to determine the issue presented by the sixth question because it is not squarely before this court and because further interpretation of Supreme Court decisions may occur prior to this court having to determine the issue.
The decision on the question presented by the petition for rehearing does not alter in any respect the earlier decision made by this court, which is affirmed. The plaintiff having presented a form of decree in accordance with the prior decision herein, this court will enter that decree forthwith. *Page 102