Oregon: Certain Non-U.S. Members May be Excluded from CAT Unitary Group

Under Oregon CAT law, a unitary group is defined as a group of persons with more than 50 percent common ownership, either direct or indirect, that is engaged in a unitary business. The unitary group includes both domestic and non-U.S. members.  Under a new permanent rule, ORS 150-317-1025, certain non-U.S. group member’s information can be excluded from the return if that member (1) has no commercial activity (i.e., receipts) sourced to Oregon under the state’s market-based sourcing rules, (2) has commercial activity excluded from the CAT base that would not be sourced to Oregon if it were included, (3) has no transactions with another unitary group member in which the other member would realize commercial activity sourced to Oregon but for an exclusion, and (4) has no cost inputs or labor costs that are attributable to the unitary group’s receipts from an item that is commercial activity and the non-U.S. member’s other financial  information may be omitted.  It appears that the omission of a non-U.S. group member’s information is optional. If omitting a non-U.S. member’s information does not fairly represent the extent of commercial activity in Oregon, the unitary group may not omit the non-U.S. member’s information from the return. Further, if transactions and information of a non-U.S. group member is omitted, then the other financial information of that member is likewise not used in calculating other aspects of the CAT (e.g., receipts factor or the COGs deduction). Please contact Vinh Tran at 503- 820-6803 with questions on the rule.