Rule Rule 123-674-1400
Gross Receipts Test


A gross receipts test shall determine the eligibility of a business firm or business operation that partially involves an ineligible activity only when:


There are Applicable Gross Receipts;


The firm is not eligible as described in OAR 123-674-1200 (Ineligible Activities)(4); and


For lack of definitive or physical separation, the ineligible activity cannot be effectively isolated from eligible activities for purposes of OAR 123-674-1300 (Eligible Business Firm with Ineligible Activities).


The Firm/applicant or operation passes the gross receipts test and is otherwise eligible for authorization and qualification in the enterprise zone, if Applicable Gross Receipts divided by Ineligible Receipts equals or exceeds 4.0.


For purposes of this rule, the local zone manager shall see as part of the Preauthorization Conference that the authorization includes:


An explanation of the eligibility of the firm or operation consistent with this rule; and


Arrangements to substantiate this for the firm’s future qualification, as appropriate.


“Applicable Gross Receipts” as used in this rule are based on:


Sales revenue derived directly from a party external to the firm in exchange for goods, products, commodities, merchandise, work or services;


Operations located entirely inside the enterprise zone;


All activities of the firm within the enterprise zone;


An annual total for the most recent fiscal year or calendar year; and


The commercial state of affairs, as realized when the firm is qualified for the property tax exemption being sought, which is estimated for purposes of the Application or Preauthorization Conference.


“Ineligible Receipts” as used in this rule are that subset of the same Applicable Gross Receipts that arise from an ineligible activity described in OAR 123-674-1200 (Ineligible Activities)(1), including but not limited to receipts that entail:


Consumption by an end-user among the public;


Sales directly to a household or individual that is neither another business firm nor operating as such; or


No subsequent resale of the applicable goods or products by the firm’s customer.
Last accessed
Oct. 19, 2020