Oregon — Corporate Income / Franchise Tax

Oregon imposes corporate tax through two distinct statutes that apply to different categories of taxpayers. Corporations "doing business" in Oregon are subject to the corporate excise tax under ORS Chapter 317, measured by net income and imposed "for the privilege of carrying on or doing business in this state." Corporations not doing business in Oregon but with income from Oregon sources are instead subject to the corporate income tax under ORS Chapter 318, at the same rates but without a minimum tax. "Doing business" means "any transaction or transactions in the course of its activities conducted within the state," excluding foreign corporations whose activities are limited to purchasing and storing personal property for out-of-state shipment (unless they are affiliated with another corporation doing business in Oregon). The same income cannot be taxed under both chapters; the facts determine which statute applies, and there is no election. Most active Oregon corporations file under the excise tax (Chapter 317).

Source: ORS 317.070; ORS 317.010(4)-(5); ORS 318.020; OAR 150-318-0030

Oregon imposes a two-tiered corporate tax rate structure under ORS 317.061. The tax rate is 6.6% on the first $1 million of taxable income, and 7.6% on taxable income exceeding $1 million. These rates apply to both the corporate excise tax (Chapter 317) and the corporate income tax (Chapter 318). The $1 million threshold is not indexed for inflation.

Source: ORS 317.061; Oregon Corporate Excise and Income Tax: 2023 Update, Oregon Legislative Revenue Office

Oregon imposes a minimum corporate tax under ORS 317.090, but its scope is limited strictly to corporations subject to the corporate excise tax (Chapter 317)—that is, corporations "doing business" in Oregon. Corporations that are subject only to the Oregon corporate income tax under Chapter 318 (that is, not "doing business" in Oregon but deriving Oregon-source income) are not liable for the minimum tax under ORS 317.090.

Statutory framework:

• ORS 317.090 imposes a tax "on each corporation or S corporation subject to tax under this chapter." The chapter in question is 317—the excise tax provisions. The statute's language, including its reference to being "subject to tax under this chapter," confines its effect to excise taxpayers.
• Oregon's Department of Revenue corroborates this reading in official guidance: "Excise tax filers are subject to corporation minimum tax. Income tax filers are not subject to corporation minimum excise tax."
• Chapter 318 (corporate income tax) does not import or cross-reference the minimum-tax provisions of Chapter 317. Instead, it imposes its tax on Oregon-source income of corporations not otherwise "doing business" in Oregon, at the same graduated rate structure, but omits any minimum tax requirement.

Summary:

• A corporation subject only to the Oregon corporate income tax (Chapter 318) is not liable for the minimum tax under ORS 317.090. The minimum tax applies exclusively to excise tax filers under Chapter 317.

Source: ORS 317.090. Source: Oregon Department of Revenue – Corporation Excise & Income Tax Topics

Caution / review status: Not yet human confirmed.

For tax years beginning on or after July 1, 2005, Oregon apportions corporate income using only the sales factor. Under ORS 314.650, all apportionable income is multiplied by a fraction: Oregon sales in the numerator divided by total sales everywhere in the denominator. The regulation defines "sales" as all gross receipts and revenues included in apportionable income. This single-factor method replaced the prior weighted three-factor formula (property, payroll, and sales). Certain industries—including financial organizations, public utilities, and carriers of freight or passengers—may use modified apportionment factors under separate statutes and regulations.

Source: ORS 314.650; OAR 150-314-0385

Oregon asserts jurisdiction to impose corporate excise or income tax when a taxpayer has "substantial nexus" with the state, and physical presence is not required. Under OAR 150-317-0020(2), substantial nexus exists "where a taxpayer regularly takes advantage of Oregon's economy to produce income for the taxpayer and may be established through the significant economic presence of a taxpayer in the state." The regulation explicitly states that substantial nexus "does not require a taxpayer to have a physical presence in Oregon."

The statutory foundation is ORS 317.010(4), which defines "doing business" as "any transaction or transactions in the course of its activities conducted within the state." Foreign corporations whose activities are confined solely to purchasing and storing personal property incident to out-of-state shipment are excluded from the "doing business" definition, unless the corporation is an affiliate of another corporation doing business in Oregon (with affiliation determined under IRC § 1504).

Factors Oregon considers

OAR 150-317-0020(3) lists non-exclusive factors the Department of Revenue may consider in determining whether substantial nexus exists:

• Filing or being required to file reports or returns with Oregon regulatory bodies
• Receiving significant gross receipts attributable to customers in Oregon
• Receiving significant gross receipts attributable to use of the taxpayer's intangible property in Oregon
• Receiving benefits from the state, including: laws protecting business interests or regulating consumer credit; access to courts for debt collection or intellectual property enforcement; highway or transportation system access; police and fire protection for property displaying the taxpayer's intellectual or intangible property

The regulation emphasizes that this list is "meant to be nonexclusive," and the Department "may consider any other relevant facts and circumstances."

Regulatory examples

The regulation provides four examples illustrating when nexus exists or does not exist:

• Example 1 (nexus exists): A credit card company providing services over the internet and by mail to over 25,000 Oregon customers, with three or four annual solicitation mailings to Oregon customers in six Oregon cities, has substantial nexus.

• Example 2 (no nexus): A San Francisco internet sales company making approximately 50 sales at $6.95 per sale to Oregon residents during the tax year, contracting with an Oregon mailing service for deliveries, does not have substantial nexus because the sales volume is de minimis.

• Example 3 (nexus exists): A wine and beer distributor that must obtain and maintain an Oregon wholesaler's license from the Oregon Liquor Control Commission and file monthly sales reports has substantial nexus.

• Example 4 (nexus exists): A Delaware intellectual property company that licenses trademarks to a related retail company operating Oregon stores (the royalty is 5% of gross sales) has substantial nexus through the use of its property in Oregon.

P.L. 86-272 protection

Oregon's nexus jurisdiction is subject to the limitations of federal Public Law 86-272, which protects corporations whose in-state activities are limited to solicitation of sales of tangible personal property for delivery outside the state. OAR 150-317-0020(1) expressly states that Oregon imposes tax "to the extent allowed under state statutes, federal Public Law 86-272, and the Oregon and U.S. Constitutions."

Threshold for filing

Oregon does not publish a bright-line dollar threshold for substantial nexus. The determination is fact-specific and turns on whether the taxpayer "regularly takes advantage of Oregon's economy." The regulatory examples show that 50 sales totaling approximately $347.50 is de minimis and does not create nexus, while 25,000 credit card customers receiving multiple annual solicitations does.

Source: OAR 150-317-0020; ORS 317.010(4); Oregon Department of Revenue, Foreign Corporations

For tax years beginning on or after January 1, 2018, Oregon assigns sales of services and intangibles to Oregon using market-based sourcing. Under OAR 150-314-0435, receipts other than sales of tangible personal property "are in Oregon within the meaning of ORS 314.665(4) and this rule if and to the extent that the taxpayer's market for the sales is in Oregon." This rule replaced Oregon's prior cost-of-performance method, which sourced receipts to the state where the taxpayer performed the income-producing activity.

The regulation adopts a model regulation recommended by the Multistate Tax Commission and applies to all receipts other than sales of tangible personal property, including sales of services, rentals or licenses of real or tangible personal property, sales or licenses of intangible property, and sales of digital products.

Professional services sourcing hierarchy

For professional services—services requiring specialized knowledge and in some cases a professional certification, license, or degree—OAR 150-314-0435(4)(c) establishes a three-tier sourcing hierarchy. Professional services include management services, financial services, tax preparation, payroll and accounting services, data processing services, legal services, consulting services, video production services, graphic and other design services, engineering services, and architectural services.

Services to business customers: Sales are assigned to Oregon based on the following hierarchy:

1. First: The state where the contract of sale is principally managed by the customer—the primary location where an employee or other representative of the customer serves as the primary contact person with respect to day-to-day execution and performance of the contract.

1. Second (if first not reasonably determinable): The customer's place of order—the location from which the customer places the order for the services, as determined by the address of the individual signing the contract on behalf of the customer.

1. Third (if first and second not reasonably determinable): The customer's billing address.

Services to individual customers: Sales are assigned first to the individual's state of primary residence. If the state of primary residence cannot be determined, sales are assigned to the customer's billing address.

Materiality threshold for large customers: If a taxpayer derives more than five percent of its gross receipts from one business customer, the taxpayer must identify the state in which the contract is principally managed by that customer. For individual customers contributing more than five percent of receipts, the taxpayer must identify the customer's state of primary residence.

Safe harbor for high-volume service providers: If a taxpayer engages in substantially similar services with more than 250 customers (either individuals or businesses) in a taxable year, the taxpayer may assign all sales receipts based on the customer's billing address, bypassing the higher tiers of the hierarchy.

Real and tangible personal property

Sales, rentals, leases, or licenses of real property are in Oregon if and to the extent the property is in Oregon. Sales, rentals, leases, or licenses of tangible personal property are in Oregon if and to the extent the property is in Oregon. For mobile tangible personal property located both inside and outside Oregon during the contract period, receipts are apportioned using a fraction based on the property's time or mileage in Oregon.

Software transactions

A license or sale of pre-written software for purposes other than commercial reproduction, when transferred on a tangible medium, is treated as a sale of tangible personal property rather than as a license of intangible property or performance of a service. Those receipts are sourced under the tangible personal property rules of ORS 314.665(2)—generally, to the state where the property is delivered or shipped.

Intangible property exclusions

Certain receipts from the sale of intangible property are excluded from both the numerator and denominator of the sales factor. ORS 314.665(3)(a) excludes gross receipts from the sale, exchange, redemption, or holding of intangible assets (including securities) unless those receipts are derived from the taxpayer's primary business activity. ORS 314.665(3)(b) includes net gains from the sale, exchange, or redemption of intangible assets not derived from the primary business activity but included in the taxpayer's business income. The regulation specifies that sales of partnership interests, business goodwill, agreements not to compete, and similar intangible property are excluded from the sales factor under Oregon Laws 2017, chapter 549, section 2(3)(c).

Related-party information imputation

Where a taxpayer has receipts from transactions with a related-party customer (as defined by the attribution rules of IRC § 267 or § 1504), information that the customer has that is relevant to the sourcing of receipts is imputed to the taxpayer. This prevents taxpayers from claiming inability to determine sourcing information when dealing with controlled entities.

Contemporaneous records requirement

A taxpayer's assignment of receipts must be supported by the taxpayer's books and records kept in the normal course of business. Where a taxpayer has sufficient information in its books and records to assign receipts to a specific state under the applicable hierarchy, the taxpayer must assign the receipts to that state. A taxpayer may not avoid the assignment rules by failing to maintain records in the normal course of business or by failing to gather information that would reasonably be available.

Effective date and transition

OAR 150-314-0435 applies to tax years beginning on or after January 1, 2018. For tax years beginning before January 1, 2018, Oregon sourced service receipts under cost-of-performance principles, assigning receipts to the state where the income-producing activity was performed.

Source: OAR 150-314-0435; ORS 314.665

Oregon imposes both a Corporate Activity Tax (CAT) and a corporate excise/income tax, and a corporation doing business in Oregon may be subject to both taxes. The CAT, imposed under ORS chapter 317A, is separate from and in addition to the corporate excise tax (ORS chapter 317) and the corporate income tax (ORS chapter 318).

1. CAT is in addition to corporate excise/income tax The CAT is explicitly imposed "in addition to any other taxes or fees imposed under the tax laws of this state" (ORS 317A.116). The Oregon Department of Revenue affirms that taxpayers with Oregon business activity may have a liability for both CAT and corporate excise/income tax, as the taxes are imposed on different tax bases and are not mutually exclusive.

2. Distinct bases and no cross-credit

• The CAT is assessed on "commercial activity"—generally, Oregon-sourced gross receipts, with certain subtractions but unrelated to net income.
• Corporate excise/income tax is imposed on Oregon taxable income (net income apportioned to Oregon).
• There is no statutory provision permitting a credit or offset between CAT and the corporate excise/income tax. Taxpayers must compute and pay each tax separately and may not apply a payment or credit for one tax to the other.

3. Compliance Corporations subject to both taxes must file separate returns and remit both liabilities according to their distinct statutes and filing regimes.

Source: ORS 317A.116; Oregon Department of Revenue – Corporate Activity Tax Overview

Not yet human confirmed.

For tax years beginning on or after January 1, 2026, Oregon’s decoupling from federal bonus depreciation (IRC §168(k)) and qualified small business stock (QSBS) gain exclusion (IRC §1202) became operative under SB 1507 (Oregon Laws 2026, chapter 142). Oregon now requires the following additions to taxable income:

Bonus depreciation addback (IRC §168(k)): Taxpayers must add back the excess of federal bonus depreciation over the amount that would have been allowed as depreciation under IRC §168(k) as in effect on December 1, 2017. The smaller, Oregon-allowed amount may be subtracted on a current-year basis, creating the need to track parallel federal and Oregon depreciation for each asset placed in service in tax years beginning on or after January 1, 2026. Subtraction and addition codes referenced in administrative instructions are 354 (subtraction) and 152 (addition), but taxpayers must maintain their own schedules and be prepared to support computations at audit.

QSBS gain exclusion addback (IRC §1202): Any federal gain exclusion under §1202 for qualified small business stock must be added back in full. As of July 2026, no special subtraction for this amount is provided.

Oregon forms, worksheets, and detailed examples: The Oregon Department of Revenue has not published a dedicated worksheet or form for either the bonus depreciation or QSBS addback for 2026 and later returns; the only official instructions are the updated Schedule OR-ASC-NP and Schedule OR-DEPR (Depreciation Schedule) instructions. Taxpayers must use the appropriate addition and subtraction codes and preserve contemporaneous depreciation or basis records; examples of federal/Oregon depreciation divergence are provided in the general depreciation instructions, but no 2026-specific example yet exists.

Impact on net operating losses (NOLs) and group filings: Oregon has not issued administrative clarification on how these addbacks interact with the computation or allocation of NOLs for separate or group filers. Under the default reading of ORS 317.476 and ORS 318.070, these addbacks increase Oregon taxable income in the addback year and may thus reduce or postpone a net operating loss, but further DOR guidance may be forthcoming. Group filers must allocate these modifications in accordance with ORS 317.476, OAR 150-317-0150, and the same Schedule OR-ASC-NP mechanics as single filers.

Summary: As of July 2, 2026, taxpayers are responsible for implementing the statutory addback requirements using Oregon’s existing addition/subtraction schedules and instructions, maintaining separate depreciation and basis reconciliation records. Watch for DOR bulletins for new forms or further administrative guidance.

Source: Enrolled Senate Bill 1507 (2026), including sections 5, 7, and statutory amendments. Source: ORS 317.356. Source: Oregon Dep't of Revenue, Schedule OR-DEPR instructions (2023).

Oregon requires affiliated corporations to file a consolidated (combined) Oregon return only if they are (1) members of the same "affiliated group" as defined under IRC § 1504 and (2) part of the same "unitary group" as defined under Oregon law. These two criteria are conjunctive—having a federal affiliated-group relationship alone is not sufficient unless the group also constitutes a unitary business under Oregon's standards.

Definition of Unitary Group (Oregon) ORS 317.705 defines an "affiliated group" by reference to the federal definition in IRC § 1504, but Oregon's "unitary group" concept is independent and hinges on operational integration and interdependence. Under ORS 317.705(3), a unitary group requires central management, economies of scale, or the flow of goods, capital, or services among members. Factors for determining unity can include similar lines of business or vertical integration, but the statute provides flexibility if other signs of unity are present.

How Oregon differs from federal consolidated return rules Under IRC §§ 1501–1504, federal consolidated returns are based solely on the affiliated-group criteria (generally 80% ownership). Oregon, by contrast, overlays its separate unitary-business test. Accordingly, corporations included on a federal consolidated return may not all be eligible (or required) to file on a single Oregon return unless they also form an Oregon unitary group. Conversely, some corporations that cannot consolidate federally might be required to combine in Oregon based on unity of operations.

Exclusions and Special Cases Oregon law excludes certain entities from combined returns even if both affiliation and unity exist. These include:

• Insurance companies
• Entities permitted or required to apportion income by a method different from other group members
• Other corporations granted separate filing status under ORS 314.667

See ORS 317.710(5).

Administrative rule detail OAR 150-317-0550 specifies that the Oregon return should follow the federal consolidated group except for any members who do not meet the Oregon unitary test or are specifically excluded. The rule further clarifies timing for inclusion or exclusion (e.g., newly acquired corporations are not included until the year after acquisition unless they are immediately unitary).

Source: ORS 317.705, ORS 317.710, OAR 150-317-0550

Caution / review status: Not yet human confirmed. This summary reflects Oregon statutory and administrative law as published by state authorities as of 2026-06-16. Please verify specific filing years and any changes in underlying rules for future periods.

Oregon generally requires corporations to apportion business income to Oregon using a single-sales-factor formula under ORS 314.650, effective for tax years beginning on or after July 1, 2005. However, several industries and taxpayer classes must, or may, use special alternative apportionment formulas by statute or regulation.

1. Financial institutions and public utilities Under ORS 314.615, taxpayers whose principal business activity is as a financial institution or public utility must use an apportionment method specified by ORS 314.280 and 314.675, not the default sales factor.

• ORS 314.280 authorizes the Oregon Department of Revenue to require alternative apportionment or to segregate business activity if the standard apportionment does not "fairly and accurately" reflect business activity in Oregon. For public utilities and telecommunications, the statute allows these taxpayers to make a binding election to use Oregon’s historic three-factor apportionment formula rather than the single-sales factor. Such election remains in force until revoked by the taxpayer, subject to regulatory procedures.

2. Insurers—including title insurers and health care service contractors Under OAR 150-317-0570, insurers that are subject to apportionment under ORS 317.660 must use a formula prescribed by that statute, not the single-sales factor. Title insurers and health care service contractors are not "domestic insurers" as defined in ORS 317.010(11). OAR 150-314-0070 clarifies that these entities must apportion income under ORS 314.610 to 314.665—using the single-sales-factor formula—but, for these taxpayers, "sales" include gross premiums received (rather than just receipts from tangible property or services).

3. Sea transportation services OAR 150-314-0082 prescribes a special method for apportioning the property factor for taxpayers whose business includes sea transportation in interstate or foreign commerce. The regulation assigns Oregon property factor weight based on the ratio of voyage time spent in Oregon waters to total voyage time everywhere, departing from the standard property factor treatment.

Summary table:

| Taxpayer type | Apportionment rule | |-------------------------------------------|-----------------------------------------------------------| | Financial institutions/public utilities | ORS 314.280; may elect 3-factor apportionment | | Insurers (per ORS 317.660) | Special statutory formula (not single-sales factor) | | Title insurers/health care contractors | Single-sales factor but "sales" = gross premiums | | Sea transportation providers | OAR 150-314-0082 modifies property factor by voyage time |

Effective date: The single-sales-factor rule is effective for tax years beginning on or after July 1, 2005. Special apportionment for utilities/telecom, insurers, and sea carriers applies as defined in the cited rules and statutes. Unable to confirm further phase-in or modifications as of 2026-06-17.

Source: ORS 314.615. Source: ORS 314.280. Source: OAR 150-317-0570. Source: OAR 150-314-0070. Source: OAR 150-314-0082.

Oregon allows a deduction for net operating losses (NOLs) incurred by corporations, but departs from the federal Internal Revenue Code (IRC) on both the length of carryforward and prohibition of carrybacks. The primary statutory authorities are ORS 317.476 (corporate excise) and ORS 318.070 (corporate income tax).

Core rule and tie to federal law Under ORS 317.476(1): "There shall be allowed as a deduction in computing taxable income the net operating loss deduction allowed under section 172 of the Internal Revenue Code... with the modifications, additions and subtractions required... and subject to [Oregon's] limitations." This means Oregon generally starts from the federal NOL calculation, but overlays its own limits, notably for periods and group return rules.

Carryforward and carryback

• Carryforward: For losses incurred for tax years beginning on or after January 1, 2000, NOLs may be carried forward for up to 15 years. This limit is categorical and does not conform to the federal indefinite carryforward adopted by the TCJA for post-2017 NOLs, nor does Oregon adopt the 80% limitation introduced federally. ORS 317.476(2).
• Carryback: No NOL carryback is allowed for losses incurred in years beginning after 1983. ORS 317.476(3). Oregon explicitly disallows all federal NOL carrybacks, including those temporarily permitted under the CARES Act. If federal law allows a carryback, the related deduction must be added back to Oregon taxable income under ORS 317.476(3)(b).

Oregon modification of federal NOL Oregon requires the NOL to reflect modifications, additions, and subtractions unique to state law, and only Oregon-apportioned or allocated losses are eligible. This is not a mechanical pro rata adjustment, but the Oregon Department of Revenue provides in its Corporation Tax Instruction Booklet (2023) clear examples and detailed guidance for making these state-specific modifications—such as adding back federal items not allowed for Oregon or subtracting Oregon-only deductions. Taxpayers must keep records tracing the origins, use, and expiration of each Oregon NOL. See Instruction Booklet, page 40 ("Net Operating Loss Deduction").

Unitary and consolidated group rules Under OAR 150-317-0150, NOLs are computed on a group basis for consolidated or combined returns and apportioned consistent with the group's income and allocation fractions, with anti-duplication safeguards. ORS 317.476(4) and the corresponding regulation require detailed tracing and prohibit double-counting an NOL within group filings. See OAR 150-317-0150(2)(e) and examples therein.

Summary table: | NOL period | Carryforward | Carryback | Reference statutes | |----------------------|---------------|-------------------|-----------------------------| | 2000 and later | 15 years | Not allowed | ORS 317.476; ORS 318.070 |

Source: ORS 317.476. Source: ORS 318.070. Source: OAR 150-317-0150. Source: Oregon Department of Revenue, Corporation Tax Instruction Booklet (2023).

Not yet human confirmed.