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Multistate Tax Alert: Oregon Issues Guidance for Protective Claims for Refund Based on MTC 3-Factor Election


Oregon’s apportionment statutes appear to allow taxpayers to elect to use either Oregon’s single-sales factor for apportioning business income or the Multistate Tax Compact’s equally-weighted three-factor formula.  However, the Oregon Department of Revenue (the “Department”) believes that legislation adopted in 1993 prevents taxpayers from making this election.  The issue of whether a taxpayer may make the election is the subject of ongoing litigation in the Oregon Tax Court.  Pending the resolution of this litigation, the Department has published guidance explaining how taxpayers may submit protective claims to secure the right to a tax refund until the outcome of the Tax Court case is known.  

In the attached Tax Alert we provide an overview of the relevant Oregon apportionment provisions and we summarize the Department’s guidance regarding the filing of protective refund claims.  

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