OAR 150-314-0429
Sales Factor; Sales of Tangible Personal Property in this State

The rule adopts provisions of a model regulation recommended by the Multistate Tax Commission to promote uniform treatment of this item by the states.

(1)

For purposes of ORS 314.665 (Determination of sales factor) and the rules thereunder, “tangible personal property” means personal property that can be seen, weighed, measured, felt, or touched, or that is in any other manner perceptible to the senses. “Tangible personal property” includes electricity, water, gas, steam, and prewritten computer software.

(2)

For purposes of apportioning income under ORS 314.665 (Determination of sales factor) and this rule, gross receipts from the sales of tangible personal property except sales to the United States Government; see OAR 150-314-0431 (Sales Factor; Sales of Tangible Personal Property to United States Government in this State) are in this state:

(a)

If the property is delivered or shipped to a purchaser within this state (Oregon) regardless of the f.o.b. point or other conditions of sale; whether transported by seller, purchaser, or common carrier; or

(b)

If the property is shipped from an office, store, warehouse, factory, or other place of storage in this state and the taxpayer is not taxable in the state of the purchaser.
Example 1: A seller with a place of business in State A is a distributor of merchandise to retail outlets in multiple states. A purchaser with retail outlets in several states, including Oregon, makes arrangements to hire a common carrier to pick up merchandise, f.o.b. plant, at the seller’s place of business and have it delivered to the purchaser’s outlet in Oregon. The seller, who is subject to Oregon excise tax, must treat this as a sale of property delivered or shipped to a purchaser in Oregon.
Example 2: A seller with a place of business in Oregon is a distributor of merchandise to retail outlets in multiple states. A purchaser with retail outlets in several states, including State A, sends its own truck to pick up the merchandise at the seller’s place of business and have it transported to the purchaser’s outlet in State A. The seller is taxable in State A. The seller must treat this as a sale of property delivered or shipped to a purchaser in State A.

(c)

Notwithstanding subsection (2)(b) of this rule, for tax years beginning on or after January 1, 2006, the sale of goods from a public warehouse is not considered to take place in Oregon if:

(A)

The taxpayer’s only activity in Oregon is the storage of the goods in a public warehouse prior to shipment; or

(B)

The taxpayer’s only activities in Oregon are the storage of the goods in the public warehouse prior to shipment and the presence of employees within this state solely for purposes of soliciting sales of the taxpayer’s products.

(3)

Property is deemed to be delivered or shipped to a purchaser within this state if the recipient is located in this state, even though the property is ordered from outside this state.
Example 3: The taxpayer, with inventory in State A, sold $100,000 of its products to a purchaser having branch stores in several states including Oregon. The order for the purchase was placed by the purchaser’s central purchasing department located in State B. $25,000 of the purchase order was shipped directly to purchaser’s branch store in Oregon. The branch store in this state is the “purchaser within this state” with respect to $25,000 of the taxpayer’s sales.

(4)

Property is delivered or shipped to a purchaser within this state if the shipment terminates in this state, even though the property is subsequently transferred by the purchaser to another state.
Example 4: The taxpayer makes a sale to a purchaser who maintains a central warehouse in Oregon at which all merchandise purchases are received. The purchaser reships the goods to its branch stores in other states for sale. All of taxpayer’s products shipped to the purchaser’s warehouse in Oregon is property “delivered or shipped to a purchaser within this state.”

(5)

The term “purchaser within this state” includes the ultimate recipient of the property if the taxpayer in Oregon, at the designation of the purchaser, delivers to or has the property shipped to the ultimate recipient within Oregon.
Example 5: A taxpayer in Oregon sold merchandise to a purchaser in State A. Taxpayer directed the manufacturer or supplier of the merchandise in State B to ship the merchandise to the purchaser’s customer in Oregon pursuant to purchaser’s instructions. The sale by the taxpayer is in Oregon.

(6)

When property being shipped by a seller from the state of origin to a purchaser in another state is diverted while enroute to a purchaser in Oregon, the sales are in Oregon.
Example 6: The taxpayer, a produce grower in State A, begins shipment of perishable produce to the purchaser’s place of business in State B. While enroute the produce is diverted to the purchaser’s place of business in Oregon, in which state the taxpayer is subject to tax. The sale by the taxpayer is attributed to Oregon.

(7)

If the taxpayer is not taxable in the state of the purchaser, the sale is attributed to Oregon if the property is shipped from an office, store, warehouse, factory, or other place of storage in Oregon.

(a)

Sales to a purchaser in a state other than Oregon will not be attributed to Oregon if the other state imposes a net income tax on the seller.

(b)

Sales to a purchaser in a state other than Oregon will not be attributed to Oregon if the other state would have jurisdiction to tax the seller on net income under the constitution of the United States and federal Public Law (P.L.) 86-272.

(c)

OAR 150-314-0369 (Taxable in Another State; When a State has Jurisdiction to Subject a Taxpayer to a Net Income Tax) provides that sales and activities in a foreign country will be treated the same as those in another U.S. state for determining if the foreign country has jurisdiction to tax the seller on net income.

(d)

The guidelines provided by federal P.L. 86-272 apply equally to activities regarding sales to unrelated parties and sales to affiliated corporations.

(e)

The immunity provided by P.L. 86-272 is not lost when a business engages in de minimis activities unrelated to the solicitation of orders in a state or foreign country where its only other activities are those protected by P.L. 86-272. Examples of such immune activities include the following:

(A)

The board of directors of a corporation based in Oregon holds a meeting at a hotel in another state or in a foreign country,

(B)

The president of a parent corporation based in Oregon meets with the managers of a subsidiary in a foreign country to discuss the subsidiary’s five-year plan and capital acquisitions budget.

(C)

The controller of a parent corporation based in Oregon meets with the accounting staff of a subsidiary in a foreign country to discuss federal financial reporting requirements.
Example 7: The taxpayer has its head office and factory in State A. It maintains a branch office and inventory in Oregon. Taxpayer’s only activity in State B is the solicitation of orders by a resident salesman. All orders by the State B salesman are sent to the branch office in Oregon for approval and are filled by shipment from the inventory in Oregon. Since taxpayer is immune under Public Law 86-272 from tax in State B, all sales of merchandise to purchasers in State B are attributed to Oregon, the state from which the merchandise was shipped.
Example 8: A parent company sells its product to a subsidiary, organized in a foreign country, that uses the parent’s product in manufacturing its product. Because of the parent-subsidiary relationship, orders are not solicited in the same way as sales to unrelated customers. Instead, the products are shipped as needed to the subsidiary. Officials from the parent company maintain a close liaison with the foreign subsidiary on the planning and design of the items sold. After the parties agreed on a contract in which the parent would manufacture and sell certain items to the subsidiary, the close working relationship continued between the technicians of both companies. Many of the parent’s employees made regular trips to the subsidiary after the contract was signed, to take care of such items as manufacturing problems, installation problems, repair work, redesign discussions, and/or production problems. Parent’s production engineers, production workers, metallurgists, quality control managers, and assembly supervisors were some of the personnel who spent several weeks of the year working closely with the foreign subsidiary. The foreign country does not impose an income tax on the parent corporation. Based upon the above facts, the parent is not considered to be protected under P.L. 86-272 and therefore is not required to attribute sales to Oregon.
Example 9: A subsidiary organized in a foreign country purchases products from its parent, a manufacturing company in Oregon. The subsidiary places a purchase order with the parent on an “as needed” basis. The parent, upon receipt of the purchase order, makes shipment to the subsidiary. The subsidiary, upon receipt of the product, makes payment to the parent. The parent has a relationship with its foreign subsidiary that is unrelated to the sale of its product. Officials from the parent company occasionally visit the foreign subsidiary to discuss matters unrelated to the sale of its product, including: (1) public relations, (2) personnel matters, and (3) government relations. The foreign country does not impose an income tax on the parent corporation. Based upon the above facts, the parent is considered to be protected under P.L. 86-272 and is required to attribute the sales to Oregon.

(8)

If a taxpayer whose salesman operates from an office located in Oregon makes a sale to a purchaser in another state in which the taxpayer is not taxable and the property is shipped directly by a third party to the purchaser, the following rules apply, under authority of ORS 314.667 (Additional methods to determine extent of business activity in this state):

(a)

If the taxpayer is taxable in the state from which the third party ships the property, then the sale is in such state.

(b)

If the taxpayer is not taxable in the state from which the property is shipped, then the sale is in Oregon.
Example 10: The taxpayer in Oregon sold merchandise to a purchaser in State A. Taxpayer is not taxable in State A. Upon direction of the taxpayer, the merchandise was shipped directly to the purchaser by the manufacturer in State B. If the taxpayer is taxable in State B, the sale is in State B. If the taxpayer is not taxable in State B, the sale is in Oregon.
Publications: Publications referenced are available from the Agency

Source: Rule 150-314-0429 — Sales Factor; Sales of Tangible Personal Property in this State, https://secure.­sos.­state.­or.­us/oard/view.­action?ruleNumber=150-314-0429.

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 150-314-0429’s source at or​.us