OAR 150-314-0425
Sales Factor; Definition of Gross Receipts

(1) This rule adopts provisions of a model regulation recommended by the Multistate Tax Commission to promote uniform treatment of this item by the states. This rule applies to tax years beginning on or after January 1, 2018.
(2) “Gross receipts” are the gross amounts realized (the sum of money and the fair market value of other property or services received) on the sale or exchange of property, the performance of services, or the use of property or capital in a transaction which produces apportionable income, in which the income or loss is recognized (under the Internal Revenue Code (IRC), and, where the income of foreign entities is included in apportionable income, amounts which would have been recognized under the IRC if the relevant transactions or entities were in the United States.) Amounts realized on the sale or exchange of property are not reduced for the cost of goods sold or the basis of property sold.
(3) “Sales” means all gross receipts of the taxpayer that are not allocated under paragraphs of ORS 314.625 (Certain nonapportionable income to be allocated) to 314.645 (Allocation to this state of patent and copyright royalties) and that are received from transactions and activity in the regular course of the taxpayer’s trade or business. The following are additional rules for determining “sales” in various situations:
(a) In the case of a taxpayer engaged in manufacturing and selling or purchasing and reselling goods or products, “sales” includes all gross receipts from the sales of such goods or products (or other property of a kind which would properly be included in the inventory of the taxpayer if on hand at the close of the tax period) held by the taxpayer primarily for sale to customers in the ordinary course of its trade or business. Gross receipts for this purpose means gross sales less returns and allowances. Federal and state excise taxes (excluding sales taxes) will be included as part of such receipts if such taxes are passed on to or collected from the buyer or included as part of the selling price of the product. The exclusion of sales taxes from the sales factor is effective January 1, 2014 and applies to tax years beginning on or after that date.
(b) In the case of cost plus fixed fee contracts, such as the operation of a government-owned plant for a fee, “sales” includes the entire reimbursed cost plus the fee.
(c) In the case of a taxpayer engaged in providing services, such as the operation of an advertising agency or the performance of equipment service contracts or research and development contracts, “sales” includes the gross receipts from the performance of such services, including fees, commissions, and similar items.
(d) In the case of a taxpayer engaged in the sale of equipment used in the taxpayer’s trade or business, when the taxpayer disposes of the equipment under a regular replacement program, “sales” includes the gross receipts from the sale of this equipment. For example, a truck express company owns a fleet of trucks and sells its trucks under a regular replacement program; the gross receipts from the sale of the trucks would be included in “sales.”
(e) In the case of a taxpayer with insubstantial amounts of gross receipts arising from sales in the ordinary course of business, the insubstantial amounts may be excluded from the sales factor unless their exclusion would materially affect the amount of income apportioned to this state.
(f) The denominator of the sales factor will include the total gross receipts derived by the taxpayer from transactions and activity in the regular course of its trade or business except as provided by ORS 314.610 (Definitions for ORS 314.605 to 314.675)(7) and the rules adopted thereto.
(g) Gross premium receipts. Gross premium receipts are all receipts paid in by the subscribers to the various coverages offered by the company and are assigned to the state of the domicile of the subscriber. In the case of a group policy, the assignment is to the state of the domicile of the employer-agent who collects and remits the premiums to the company.
(4) In the case of a taxpayer engaged in the operation of a casino, “gross drop” rather than “net drop” will be used in computing the gross receipts factor. “Gross drop” is computed as follows:
(a) Keno. Gross drop is the cumulative total cash paid in at the keno windows determined by totaling the amounts set forth on the customer’s tickets.
(b) Slots. Gross drop is the cumulative total of all coins removed from the machines, plus jackpots paid less the coins previously added to the machines.
(c) Table games. Gross drop is the cumulative total of all cash funds and credit slips dropped in the cash boxes. When the cash method is used, only credit slips relating to chips removed from the tables should be considered.
(5) Sales of a taxpayer from hedging transactions, or from holding cash or securities, or from the maturity, redemption, sale, exchange, loan, or other disposition of cash or securities, must be excluded. Sales arising from a business activity are receipts from hedging if the primary purpose of engaging in the business activity is to reduce the exposure to risk caused by other business activities. Whether events or transactions not involving cash or securities are hedging transactions must be determined based on the primary purpose of the taxpayer engaging in the activity giving rise to the receipts, including the acquisition or holding of the underlying asset. Gross receipts from the holding of cash or securities, or maturity, redemption, sale, exchange, loan, or other disposition of cash or securities are excluded from the definition of sales whether or not those events or transactions are engaged in for the purpose of hedging. The taxpayer’s treatment of the sales as hedging gross receipts for accounting or federal tax purposes may serve as indicia of the taxpayer’s primary purpose, but shall not be determinative.
(6) Sales of a taxpayer do not include the following items:
(a) Property or money received by an agent, intermediary, fiduciary, or other person acting in a similar capacity on behalf of another in excess of the recipient’s commission, fee, or other remuneration; or
(b) Amounts received from others and held in trust by the taxpayer.
(7) Sales, even if apportionable income, are presumed not to include such items as, for example:
(a) Damages and other amounts received as the result of litigation unless the transaction or activity that gave rise to the damages or other amounts was in the regular course of business;
(b) Tax refunds and other tax benefit recoveries;
(c) Contributions to capital;
(d) Income from forgiveness of indebtedness;
(e) Amounts realized from exchanges of inventory that are not recognized by the IRC; or
(f) Amounts realized as a result of factoring accounts receivable recorded on an accrual basis.
(8) Exclusion of an item from the definition of “sales” is not determinative of its character as apportionable or non-apportionable income. Certain gross receipts that are “sales” under the definition are excluded from the “sales factor” under ORS 314.665 (Determination of sales factor). Nothing in this definition is to be construed to modify, impair, or supersede any provision of or rule adopted pursuant to ORS 314.667 (Additional methods to determine extent of business activity in this state).
(9) Security means any interest or instrument commonly treated as a security as well as other instruments which are customarily sold in the open market or on a recognized exchange, including, but not limited to, transferable shares of a beneficial interest in any corporation or other entity, bonds, debentures, notes, and other evidences of indebtedness, accounts receivable and notes receivable, cash and cash equivalents including foreign currencies, and repurchase and futures contracts.
(10) In filing returns with this state, if the taxpayer departs from or modifies the basis for excluding or including gross receipts in the sales factor used in returns for prior years, the taxpayer will disclose in the return for the current year the nature and extent of the modification.
(11) If the returns or reports filed by the taxpayer with all states to which the taxpayer reports under Article IV of the Multistate Tax Compact or the Uniform Division of Income for Tax Purposes Act are not uniform in the inclusion or exclusion of gross receipts, the taxpayer will disclose in its return to this state the nature and extent of the variance.
[Publications: Contact the Oregon Department of Revenue to learn how to obtain a copy of the publication referred to or incorporated by reference in this rule pursuant to ORS 183.360 (Publication of rules and orders)(2) and 183.355 (Filing and taking effect of rules)(1)(b).]

Source: Rule 150-314-0425 — Sales Factor; Definition of Gross Receipts, https://secure.­sos.­state.­or.­us/oard/view.­action?ruleNumber=150-314-0425.

150–314–0005
Period of Computation of Taxable Income 150–314–0010
Mitigation of Effect of Limitations and Other Provisions 150–314–0012
Determination by Agreement 150–314–0025
Pollution Control Facilities: Revocation of Certificate 150–314–0027
Pollution Control Facilities: Facilities Not Eligible for Tax Credit 150–314–0035
Formula for Apportionment of Lobbying Expenses Subject to Proxy Tax 150–314–0040
Withholding on Real Property Conveyances 150–314–0045
REMIC Filing Requirements 150–314–0047
REMIC Income Taxable to Nonresidents 150–314–0055
Change in Methods of Accounting or Reporting 150–314–0060
Election to Use Alternative Apportionment Weightings by Taxpayers Engaged in Utilities or Telecommunications 150–314–0062
Apportionment and Allocation of Income of Financial Organizations and Public Utilities from Business Activities Within and Without Oregon 150–314–0064
Definitions 150–314–0066
Apportionment and Allocation of Income Generally 150–314–0068
Allocation of Income 150–314–0070
Apportionment Factors Generally 150–314–0072
Apportionment Factors 150–314–0074
Modified Factors for Carriers of Freight or Passengers: General Rule 150–314–0076
Modified Factors for Carriers of Freight or Passengers: Special Rules — Railroads 150–314–0078
Modified Factors for Carriers of Freight or Passengers: Special Rules — Airlines 150–314–0080
Modified Factors for Carriers of Freight or Passengers: Special Rules — Trucking Companies 150–314–0082
Modified Factors for Companies Engaged in Sea Transportation Service 150–314–0084
Modified Factors for Companies Involved in Interstate River Transportation Service 150–314–0086
Other Methods: Limited Application 150–314–0088
Modified Factors for Financial Institutions 150–314–0090
Public Utilities: Sale of Commodities 150–314–0100
Disallowance of Certain Intercompany Transactions Involving Intangible Assets 150–314–0105
Farm Income Averaging 150–314–0110
Allocation of Oregon Modifications to Passive Activity Losses 150–314–0115
Interest on Deferred Oregon Tax Liability with Respect to Installment Obligations 150–314–0120
Reduction of Tax Attributes after Discharge of Debt 150–314–0125
Listed Transaction Reporting Requirement 150–314–0130
Definition: Final Determination 150–314–0135
Returns When Accounting Period Changed 150–314–0140
Information Returns 150–314–0142
Brokers’ Information Returns 150–314–0150
Requirement to File Returns Electronically (Corporation E-file Mandate) 150–314–0152
Requirement to File Returns Electronically 150–314–0160
Report of Changes in Federal Taxable Income 150–314–0165
Filing Returns of Income: Due date 150–314–0167
Filing Returns of Income: Extensions, Chapters 316, 317 and 318 150–314–0169
Standards for Substitute Tax Forms 150–314–0171
Alternative Filing Methods 150–314–0173
Time Limitations Affected by Military Service 150–314–0175
Time Limitations for Persons Outside United States 150–314–0185
Payment of Tax 150–314–0187
Responsibility for Tax Payments 150–314–0195
Delinquency Penalty 150–314–0197
Failure to File Penalty 150–314–0199
Interest on Deficiencies and Delinquencies 150–314–0205
Substantial Understatement Penalty (SUP) 150–314–0207
Waiver of 20 Percent Substantial Understatement of Net Tax Penalty Imposed under ORS 314.402 150–314–0209
Substantial Authority, Adequate Disclosure and Reasonable Basis 150–314–0215
Listed Transaction Understatement 150–314–0220
Additional Assessments 150–314–0222
Five-Year Statute of Limitations 150–314–0224
Time Limit to Make Adjustment 150–314–0226
Notification of Gain Realized Upon the Sale or Exchange of a Principal Residence 150–314–0228
Extension of Period for Assessment 150–314–0230
Effect of Federal Extension of Period for Assessment 150–314–0240
Refunds Generally 150–314–0242
Refunds 150–314–0244
Minimum Offset Amount 150–314–0246
Interest Computation — Offset 150–314–0248
Refund Offset Priority 150–314–0250
Refunds 150–314–0252
Effect of Federal Extension of Period for Assessment 150–314–0254
Separate Refunds When a Joint Return Has Been Filed 150–314–0256
Refunds of Tax Overpayments to Spouse or Heirs 150–314–0265
Model Recordkeeping and Retention 150–314–0267
Requirement to Provide Copies of Documents 150–314–0275
Definition: Collection Charge 150–314–0277
Payment Secured by Bond, Deposit or Otherwise 150–314–0279
Statute of Limitation on Tax Collection 150–314–0285
Assessment of Withholding Tax Against Liable Officers 150–314–0290
Estimated Tax: When Estimates Are Required 150–314–0292
Estimated Tax: When Estimates Are Required For Tax Exempt Corporations 150–314–0294
Estimated Tax: Affiliated Corporations 150–314–0300
Estimated Tax: Due Dates of Payments for Short-Period Returns 150–314–0302
Estimated Tax: Application of Payments 150–314–0310
Requirement to Use Electronic Funds Transfer 150–314–0315
Corporation Estimated Tax: Delinquent or Underestimated Payment or Both, Constitutes Underpayment 150–314–0317
Estimated Tax: Consolidated Return Underpayments 150–314–0319
Estimated Tax: Apportioned Returns 150–314–0321
Estimated Tax: Application of Net Loss, Annualized Income Exception 150–314–0323
Estimated Tax: Interest on Underpayment 150–314–0325
Estimated Tax: Computation of Underpayment 150–314–0327
Underpayment of Estimated Tax 150–314–0335
Apportionable and Nonapportionable Income Defined 150–314–0337
Apportionable and Nonapportionable Income 150–314–0339
Proration of Deductions 150–314–0345
Apportionment and Allocation of Income Generally 150–314–0347
Application of ORS 314.610 to 314.667: Allocation 150–314–0349
Apportionment and Allocation for a Taxpayer Carrying on a Unitary Business 150–314–0351
Two or More Businesses of a Single Taxpayer 150–314–0353
Apportionment for Long-Term Construction Contracts 150–314–0355
Special Rules: Installment Sales 150–314–0357
Modified Factors for Motion Picture and Television Film Producers 150–314–0365
Taxable in Another State 150–314–0367
Taxable in Another State 150–314–0369
Taxable in Another State 150–314–0371
Taxable in Another State 150–314–0380
Allocation of Interest and Dividends 150–314–0385
Apportionment Formula 150–314–0390
Property Factor 150–314–0392
Property Factor 150–314–0394
Property Factor 150–314–0396
Property Factor 150–314–0398
Property Factor 150–314–0400
Property Factor 150–314–0402
Property Factor 150–314–0404
Property Factor 150–314–0406
Property Factor 150–314–0415
Payroll Factor 150–314–0417
Payroll Factor 150–314–0425
Sales Factor 150–314–0427
Sales Factor 150–314–0429
Sales Factor 150–314–0431
Sales Factor 150–314–0435
Sales Factor 150–314–0437
Gross Receipts Related to Deferred Gain or Loss 150–314–0455
Modified Factors for Publishing 150–314–0460
Apportionment of Net Loss 150–314–0465
Sales Factor for Interstate Broadcasters 150–314–0470
Interstate Broadcasters: Net Income Attributable to this State 150–314–0475
Consistent Treatment of Partnership Items 150–314–0480
Publicly Traded Partnerships Taxed as Corporations 150–314–0485
Partnership Information Returns 150–314–0487
Partnership Penalty 150–314–0495
Corporation Tax Credits — Converting a C Corporation to an S Corporation 150–314–0497
Corporation Tax Credits — Converting an S Corporation to a C Corporation 150–314–0510
Definitions for Composite Tax Returns and Pass-through Entity Withholding 150–314–0515
Oregon Composite Tax Return 150–314–0520
Pass-through Entity Withholding Requirements 150–314–0525
Exceptions to Pass-through Entity Withholding Requirements 150–314–0530
Divulging Particulars of Returns and Reports Prohibited 150–314–0535
Information That May Be Furnished 150–314–0540
Rewards for Information 150–314–0545
Combat Zone Benefits 150–314–0733
Partnership Pays Election After Federal Centralized Partnership Audit Adjustments
Last Updated

Jun. 8, 2021

Rule 150-314-0425’s source at or​.us