Two or More Businesses of a Single Taxpayer
(1)A taxpayer may have more than one “trade or business”. In such cases, it is necessary to determine the apportionable income attributable to each separate trade or business. The income of each business is then apportioned by an apportionment formula that takes into consideration the factors, both in and out of state that relate to the trade or business, the income of which is being apportioned.
(2)The determination of whether the activities of the taxpayer constitute a unitary business will turn on the facts of each case. In general, the activities of the taxpayer will be considered unitary if there is evidence to indicate that the divisions under consideration are integrated with, dependent upon, or contribute to each other and to the operations of the taxpayer as a whole (see OAR 150-314-0349 (Apportionment and Allocation for a Taxpayer Carrying on a Unitary Business)). The following factors are considered to be good indicia of a unitary business; and the presence of any of these factors creates a strong presumption that the activities of the taxpayer constitute a unitary business:
(a)Same type of business. A taxpayer is generally engaged in a unitary business when all of its activities are in the same general line. For example, a taxpayer operating a chain of retail grocery stores will most always be engaged in a unitary business.
(b)Steps in a vertical process. A taxpayer is almost always engaged in a unitary business when its various divisions are engaged in different steps in a large vertically structured enterprise. For example, a taxpayer that explores for and mines copper ores; concentrates, smelts, and refines the copper ores; and fabricates the refined copper into consumer products, is engaged in a unitary business regardless of the fact that the various steps in the process are operated substantially independently of each other with only general supervision from the taxpayer’s executive offices.
Rule 150-314-0351 — Two or More Businesses of a Single Taxpayer,