The denominators of the property, payroll, and sales factors include only amounts from corporations that are included in the consolidated federal return and
are part of the unitary group. The numerators of the factors must include the Oregon property, payroll, and sales from each of the corporations taxable by Oregon.
When computing the property, payroll, and sales factor percentages, as well as the Oregon apportionment or alternative apportionment, round the percentage to four decimal places. For example, 12.34558 percent should be 12.3456 percent.
Property factor (all companies except insurance companies).
Enter all owned or rented business property in column B of Schedule AP-1. Enter business property owned or rented within Oregon in column A. See ORS 314.655 and administrative rules.
Lines 1 through 5.
Value owned property at original cost. Show the average value during the taxable year of real and tangible personal property used in the business. This is the average of property values at the beginning and end of the tax period. An average of the monthly values may be required if a more reasonable value results.
Value rented property at eight times the annual rental value. Reduce the annual rental value by nonbusiness sub rentals.
Real estate income (insurance companies only).
Life companies—Annual statement, page E-01, Schedule A, part 1, column 15 minus column 16, and page E-03, Schedule A, part 3, column 16 minus column 17.
P&C companies—Annual statement, Schedule A, part 1, pages E-01 and E-03, column 15 minus column 16, and Schedule A, part 3, column 16 minus column 17.
If you have income from a joint venture, partnership, or LLC, include real estate income and interest included on:
Real estate interest (insurance companies only).
Life companies—Annual statement, page 8, exhibit of net investment income, line 8, column 1 of the Net Investment Income schedule.
P&C companies—Annual statement, page 12, exhibit of net investment income, line 8, column 1 of the Underwriting and Investment Exhibit.
Life companies— Annual statement, page 8, exhibit of net investment income, line 3, column 1.
P&C companies— Annual statement, page 12, exhibit of net investment income, line 3, column 1.
All companies except insurance companies total lines 1 through 6. Insurance companies only total lines 7 and 8.
Payroll factor (all companies).
Lines 10 and 11.
Assign payroll to Oregon if:
The services are performed entirely inside Oregon; or
The services are both inside and outside Oregon but those services outside are only incidental; or
Some of the services are performed in Oregon and (a) the base of operation or control is located in Oregon, or (b) the base of operation or control is not in any state in which the services are performed, and the employee’s residence is in Oregon. See ORS 314.660 and administrative rules.
Insurance companies should use the wage and commission amounts from the annual statement.
Sales factor (all companies except insurance companies complete lines 13 through 17).
Assign sales to Oregon if:
Lines 13 and 14. The property is shipped or delivered to a purchaser in Oregon other than the United States Government; or
Lines 15 and 16. The property is shipped from a warehouse or other place of storage in Oregon; and (a) the purchaser is the United States Government or (b) the business is not taxable in the state of the purchaser. See ORS 314.665(3) for exception.
See ORS 314.620 and Public Law 86-272 to determine if a business is taxable in another state. Charges for services are Oregon sales if a greater proportion of the income-producing activity is performed in Oregon than in any other state, based on cost of performance. See ORS 314.665 and administrative rules. Gross receipts from the sale, exchange, or redemption of intangible assets cannot be included in the sales factor if not derived from your primary business activity. For taxpayers other than financial organizations, as defined in ORS 317.010(11), the net gain from sales, exchanges, or redemption of intangible assets that are not derived from your primary business activity are included in the sales factor if the gains are business income.
Insurance sales factor (insurance companies only).
Lines 18 through 20.
Use total premiums written including Oregon premiums written.
Life companies—Annual statement, “Premiums and Annuity Considerations,” page 62, schedule T, lines 38 and 95. Insurance premiums include life insurance in column 2, annuity considerations in column 3, and accident and health insurance premiums in column 4.
P&C companies—Annual statement, “Schedule of Premiums Written,” page 104, schedule T, lines 38 and 59, columns 2 and 8. Finance and service charges are included in the apportionment factor for premiums.
ORS 317.660 provides that the insurance sales factor does not include reinsurance accepted and there is no deduction of reinsurance ceded. If the exclusion of reinsurance premiums results in an apportionment formula that does not fairly represent the extent of the insurance company’s activity in Oregon, you may include reinsurance premiums in the insurance sales factor. You must
request and receive permission from the Oregon Department of Revenue to include these premiums in the insurance factor before
you file your return. Send your request to the Oregon Department of Revenue, 955 Center Street NE, Salem OR 97301-2555.
All companies except insurance companies total lines 13 through 17. Insurance companies total lines 18 through 20.
Use the worksheets to compute your Oregon apportionment percentage.