423 P.3d 706
Or.2018Background
- Comcast (taxpayer) is an interstate broadcaster whose Oregon tax apportionment for 2007–2009 was challenged by the Oregon Dept. of Revenue, which issued notices of deficiency. Taxpayer appealed to Oregon Tax Court.
- Oregon apportions multistate business income using a sales-factor formula; for interstate broadcasters ORS 314.684 applies an audience-ratio to "gross receipts from broadcasting."
- ORS 314.680(1) defines "broadcasting" narrowly as one-way electronic signal transmission; ORS 314.680(2) defines "gross receipts from broadcasting" as "all gross receipts of an interstate broadcaster from transactions and activities in the regular course of its trade or business," excluding sales of real or tangible personal property.
- Dispute: whether the audience-ratio applies only to receipts from activities that literally qualify as "broadcasting" (one-way transmissions), or instead to the broader category "gross receipts from broadcasting" (i.e., all business receipts other than excluded property sales).
- Tax Court granted the Department partial summary judgment, holding the audience-ratio applies to all "gross receipts from broadcasting" as statutorily defined; the Supreme Court granted limited review and affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether ORS 314.684(audience-ratio) applies only to receipts from "broadcasting" (one-way transmissions) or to the statute's defined term "gross receipts from broadcasting" | Comcast: "gross receipts from broadcasting" should be limited to receipts from the activity of broadcasting (one-way signals); other receipts must use general apportionment ORS 314.665 | Dept. of Rev.: statutory definition of "gross receipts from broadcasting" is broad and includes all gross receipts from transactions and activities in the regular course of the broadcaster's trade or business (except property sales); thus audience-ratio applies to that broader set | Court: Affirmed Dept. of Rev.; audience-ratio applies to all receipts within statutory definition of "gross receipts from broadcasting," not only literal "broadcasting" activity. |
| Whether construing the statute narrowly to broadcasting-only avoids surplusage and aligns numerator/denominator | Comcast: limiting definition avoids overbroad attribution and better aligns numerator and denominator | Dept.: legislature used same phrase for denominator and defined "gross receipts from broadcasting" broadly; narrow reading would create misalignment and render statutory exclusion of property sales superfluous | Court: Text and context show legislature intended broad definition; narrow reading would cause inconsistency and surplusage, so it was rejected. |
| Whether legislative history supports a narrow or broad construction | Comcast: points to defined term "broadcasting" and limited activity | Dept.: legislative history shows intent to use audience ratio to "broad[ly] include all receipts essentially" for broadcasters | Court: Legislative history supports broad application; no indication legislature meant partial application. |
| Whether the statutory result would be "absurd" and justify departing from text | Comcast: attributing non-broadcast receipts by audience ratio leads to absurd or unfair outcomes for mixed businesses | Dept.: statutory text is controlling; any policy concerns for fairness should be addressed by legislature or departmental rules | Court: Absent a clear textual contrary intent, the absurd-result maxim does not override clear statutory text and history; result is not legally absurd. |
Key Cases Cited
- Comcast Corp. v. Dept. of Rev., 356 Or. 282 (affirming use of statutory definitions in ORS 314.680–314.684)
- Health Net, Inc. v. Dept. of Rev., 362 Or. 700 (describing Oregon's sales-factor apportionment and adoption of sales-factor-only approach)
- State v. Gaines, 346 Or. 160 (text, context, and legislative history framework for statutory interpretation)
- Village at Main Street, Phase II v. Dept. of Rev., 356 Or. 164 (presumption of consistent meaning for words in same statute)
- State v. Clemente-Perez, 357 Or. 745 (avoidance of surplusage in statutory construction)
- Tektronix, Inc. v. Dept. of Rev., 354 Or. 531 (summary-judgment standard on appeal from Tax Court)