Multistate Tax Alert: Oregon Supreme Court Upholds Use of Certain Oregon Tax Credits Against Oregon Corporate Minimum Tax


In Con-way, Inc. & Affiliates v. Dept. of Rev., the Oregon Supreme Court upheld the Oregon Tax Court’s decision that allowed Oregon taxpayers to use the state’s Business Energy Tax Credit to reduce the Oregon Corporate Minimum Tax.1 This Alert summarizes the Con-way decision and outlines considerations with respect to new refund claims and previously-filed protective claims.

Oregon corporate minimum tax and credits

As previously addressed in a Deloitte Tax Alert, the Oregon Corporate Minimum Tax (“CMT”) applies to C corporations doing business in Oregon.2 The CMT ranges from $150 to $100,000 and is based on the sales included in the taxpayer’s Oregon sales factor numerator.3 The CMT in its current form applies to tax years beginning on or after January 1, 2009; prior to that change, the minimum tax was limited to $10.

In 2008, Con-way purchased a Business Energy Tax Credit (“BETC”) from a third party. The BETC is a non-refundable, transferable corporate tax credit.4 Based on Con-way’s Oregon sales in 2009, Con-way incurred a $75,000 CMT even though it reported no net Oregon income in 2009. Con-way utilized the BETC to eliminate the CMT liability. The Oregon Department of Revenue (“DOR”) disallowed this use of the BETC on audit. Con-way responded by filing a complaint in the Oregon Tax Court and the Tax Court upheld Con-way’s use of the BETC to offset the CMT. The DOR appealed the decision to the Oregon Supreme Court.

Oregon supreme court upholds Oregon tax court’s decision

The Oregon Supreme Court upheld the Oregon Tax Court’s determination. The DOR made several different arguments that the BETC could not reduce the CMT, including that a “credit” does not constitute a tax “payment,” that a tax must be “paid” in cash, that the word “minimum” prevents the use of a credit to offset the tax, and that the Oregon voters did not intend for the minimum tax to be reduced by tax credits.5 The Court rejected each of these arguments in turn, ultimately concluding that the statutory provisions for the BETC provided that the credit could offset all the taxes imposed by Oregon Revised Statutes (“ORS”) chapter 317, which includes the CMT because the CMT is imposed by ORS 317.090. The Court’s decision represents the final judicial statement on this question and although the DOR may petition the Court for reconsideration, it has no further appeal rights.6

Impact on Oregon refund claims

Although the Con-way case dealt with the BETC, the decision should now allow Oregon taxpayers to use several different Oregon tax credits to offset the CMT. Several Oregon tax credits, including but not limited to the research and development credit (ORS 317.152), film production development contribution credit (ORS 315.514), pollution control facilities (ORS 315.304) and reforestation credits (ORS 315.104), use language highly similar to the operative language of the BETC provisions that allow the respective credit to offset “the taxes otherwise due” under ORS chapter 317. The Oregon Supreme Court’s reasoning in the context of the BETC should apply equally to the language used in these credits. The two tax credits that are specifically prohibited from being applied against the minimum tax are the corporate surplus kicker credit (ORS 291.349) and the credit for contribution of computer equipment (ORS 317.151).

In response to its defeat in the Oregon Tax Court, the Oregon DOR had previously published guidance on its website instructing taxpayers regarding how to submit protective refund claims pending the resolution of the Con-way case.7 At a meeting on May 31, 2013, the DOR stated that it would be issuing updated guidance for how taxpayers can move forward with those refund claims now that the Oregon Supreme Court has issued its decision. The DOR is also expected to issue guidance for how taxpayers may utilize credits to offset the CMT on originally filed and amended returns that are not protective claims. There is no stated deadline for the publication of this guidance.


If you have questions regarding the Con-way decision or other Oregon income tax matters, please contact any of the following Deloitte Tax professionals.

Doug Andersen
Deloitte Tax LLP, Seattle
(206) 716-7430
Scott Schiefelbein
Senior Manager
Deloitte Tax LLP, Portland
(503) 727-5382


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This alert contains general information only and Deloitte is not, by means of this alert, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This alert is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this alert.

1 Con-way, Inc. & Affiliates v. Dept. of Rev., TC 5003; SC S060141 (Or. S. Ct., May 31, 2013).
2 To review Deloitte’s previous Alert on this decision, please click on the following link: Assets/Documents/Tax/us_tax_multistate_Oregon_Alert_1-7-2012.pdf
3 ORS 317.090.
4 ORS 315.354.
5 The CMT was approved by Oregon voters when they approved Measure 67 in 2009. See Or. Laws 2009, ch. 745 §1.
6 ORS 1.002; the DOR has the option to petition the Oregon Supreme Court for reconsideration of its decision within 14 days after the decision. ORAP 9.25(1). The Court may deny the petition. ORAP 9.25(4). To date there is no indication that the DOR is considering or seeking to file such a petition.