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Corporations with headquarters outside Oregon

Who must file?

Corporations that are doing business in Oregon or have income from an Oregon source are required to file an excise or income tax return.

"Doing business" means being engaged in any profit-seeking activity in Oregon. A taxpayer having one or more of the following in this state is doing business in Oregon.

  • A stock of goods.
  • An office.
  • A place of business (other than an office) where affairs of the corporation are regularly conducted.
  • Employees or representatives providing services to customers as the primary business activity (such as accounting or personal services), or services incidental to the sale of tangible or intangible personal property (such as installation, inspection, maintenance, warranty, or repair of a product).
  • An economic presence through which the taxpayer regularly takes advantage of Oregon's economy to produce income.

Oregon-source income only

If you have tangible or intangible property or other assets being used in Oregon, any income you receive is Oregon-source income. Your company must file an Oregon Corporation Income Tax Return, Form OR-20-INC. There are exceptions to this requirement in federal Public Law 86-272.

Oregon jurisdiction

Any corporation with substantial nexus in Oregon, and not protected by Pub.L. 86-272, must pay Oregon excise or income taxes. OAR 150-317-0020.


Nexus is a connection, tie, or link. The U.S. Constitution, through due process and commerce clauses, forbids states from imposing a tax unless nexus exists. Nexus ranges from very little connection to substantial connection with Oregon.

Representational nexus

If your company receives a benefit from business conducted in Oregon, you might have nexus. For example, if you contract with independent representatives to provide services for your customers, such as repair or warranty work, the activities of those representatives establish nexus for your corporation. Also, if you lease property to a customer who brings it into Oregon, this establishes nexus for your corporation.

Nexus-creating activities

Examples of activities that create nexus and a filing requirement in Oregon include:

Your company has:

  • A phone listing in Oregon.
  • A local Oregon phone number, even if calls are forwarded to your office outside of Oregon.
  • An office in Oregon.

Your company owns, rents, or leases:

  • Unimproved land.
  • Inventory or other goods in an Oregon warehouse during the year.
  • Vehicles used in Oregon, except those used by certain sales staff.
  • Equipment used in Oregon.

Your company:

  • Ships in-process inventory to any party in Oregon for processing.
  • Consigns goods for sale in Oregon.
  • Leases property to a party who uses it in Oregon.
  • Has any interest in partnerships, LLCs, or S corporations operating in Oregon.
  • Holds title to Oregon property until contract price is paid.
  • Files a security interest in inventory in Oregon until it's sold.
  • Licenses trademarks to parties doing business in Oregon.
  • Regularly takes advantage of Oregon's economy to produce income.
  • Sells or licenses franchises to franchisees operating in Oregon.
  • Sells services in Oregon.

Your employees or representatives conduct activities in Oregon, such as:

  • Accept orders.
  • Check credit.
  • Accept deposits.
  • Handle credit disputes.
  • Collect delinquent accounts.
  • Repossess property.
  • Perform installation, repair, or warranty services in Oregon.
  • Supervise or inspect installation.
  • Conduct training, seminars, etc., more than two times per year except for training sales staff whose activities are protected under Pub.L. 86-272.
  • Provide engineering or design services for Oregon customers.
  • Handle customer complaints in Oregon.
  • Pick up defective products or returned property.
  • Telecommute from Oregon residences.

Third parties or agents perform these services on your behalf:

  • Fill orders from inventory.
  • Collect on accounts.
  • Check credit history of new Oregon customers.
  • Repossess property in Oregon.
  • Provide maintenance and warranty services in Oregon.
  • Close mortgage loans (for out-of-state financial organizations).
  • Service mortgage and consumer loans for out-of-state financial organization.

Public Law 86-272

Federal Public Law 86-272, enacted in 1959, limits a state's right to tax out-of-state companies selling of tangible personal property. This does not protect corporations that profit from the use of intangible property or the sale of services in Oregon. It does not protect businesses incorporated in Oregon.

Pub.L. 86-272 prohibits Oregon from imposing net income taxes on out-of-state companies selling tangible personal property whose business activities in Oregon are limited to the solicitation of orders by their employees or representatives. This protection is available only if the orders are approved outside Oregon and the merchandise is shipped or delivered from a location outside Oregon.

The U.S. Supreme Court narrowly interpreted Pub.L. 86-272 to protect only the actual solicitation of orders and activities entirely ancillary to the solicitation of orders. For more information, read the "Statement of Information Concerning Practices of Multistate Tax Commission and Signatory States Under Public Law 86-272." This statement is available in the publication "Model Regulations, Statutes and Guidelines" at the MTC website.

An out-of-state company that sells or solicits orders through an independent contractor in Oregon may be protected under Pub.L. 86-272 even if the independent contractor has an office in Oregon. An independent contractor is one who is engaged in selling or soliciting orders for the sales of tangible personal property for more than one principal, and who is held out as such in the regular course of conducting business activities [15 USCA Subsection 381(d)(1)].

An out-of-state company has nexus and is considered to be "doing business" in Oregon if activities (not protected by Pub.L. 86-272) performed in Oregon on behalf of the taxpayer are significantly associated with the taxpayer's ability to establish and maintain a market in Oregon.

For example: Nexus exists when in-state repair and warranty services provided by an independent contractor on behalf of a direct marketing computer company are advertised as part of its standard warranty or as an option that can be separately purchased. The extension of immunity for activities by independent contractors under Pub.L. 86-272 does not include repair and warranty service.

Voluntary disclosure

If your business isn't in compliance with Oregon tax laws, we encourage you to voluntarily come forward to register and pay prior tax obligations. Read more about how our Voluntary Disclosure Program can help resolve your prior tax liabilities.

Frequently asked questions

No, you don't need to file an Oregon corporation return if your corporation isn't doing business in Oregon and has no Oregon-source income. This applies even if you're registered to do business in Oregon.
We don't have an extension form for Oregon. Use federal extension Form 7004 instead. Include your extension when you file your Oregon corporation return, don't send it separately. Mark the "Extension" box on the first page of your Oregon return. If you need an extension to file for Oregon only, write “for Oregon only” across the top of the form before filing. The Oregon corporation extended due date is the 15th day of the month following the federal extended due date. See the corporation form instructions for more details.
Yes, you must make estimated tax payments if you expect to owe tax of $500 or more when you file your return. For more information, see the instructions for the Oregon corporation form you file (Form OR-20, OR-20-INC, OR-20-INS, or OR-20-S). You can make estimated tax payments electronically using Revenue Online.
No, the company does business in Oregon, but federal law prohibits states from taxing out-of-state companies that only solicit sales of tangible personal property within the state (Title 15, USC 381).

Contact us

Phone: 503-378-4988 or 800-356-4222

TTY: We accept all relay calls

Fax: 503-945-8738



S corporations:

Nexus/Voluntary Disclosure: