316 P.3d 276
Or.2013Background
- Tektronix sold its printer division for about $925 million in 1999, with roughly $590 million from intangible assets (e.g., goodwill).
- Tektronix initially omitted the $590 million from Oregon sales factor calculations, and received a tax refund for 1999.
- The Oregon Department of Revenue later assessed an additional $3.7 million for 1999 after re-auditing and recalculating the sales factor to include the $590 million.
- IRS 2005 audit adjustments to the 2002 year reduced net capital loss carryback to 1999, which affected the 1999 tentative refund already issued.
- Tax Court granted Tektronix partial summary judgment on limitations and the sales-factor treatment; the parties settled subject to appeal rights.
- This appeal addresses whether the $590 million from intangible assets should be included in Oregon’s sales factor under ORS 314.665(6)(a).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether $590 million is included in the sales factor | Tektronix: exclude under ORS 314.665(6)(a) as intangible assets not from primary business. | Department: include under the 'unless' clause in ORS 314.665(6)(a) because tied to primary business activity. | Excluded from sales factor; affirm. |
Key Cases Cited
- State v. Gaines, 346 Or 160 (2009) (textual interpretation prioritizes text and context)
- Harding v. Bell, 265 Or 202 (1973) (statutory interpretation and pleading principles)
- Crystal Communications, Inc. v. Dept. of Rev., 353 Or 300 (2013) (distinguishes business vs nonbusiness income under UDITPA)
- South Beach Marina, Inc. v. Dept. of Rev., 301 Or 524 (1986) (broadly discusses statutory interpretation and purpose)