Oregon Tax Changes - November 2024
Week Of 11.21.2024
Oregon Corporate Income Tax Case Overview
Case Title: Santa Fe Natural Tobacco Co. v. Dept. of Rev.
Court: Oregon Supreme Court
Docket Number: SC S069820
Date of Oregon Supreme Court Decision: June 20, 2024
Date of Certiorari Petition Filed: November 15, 2024
Background:
The U.S. Supreme Court has been petitioned to review a decision made by the Oregon Supreme Court. This case involves an out-of-state tobacco manufacturer, Santa Fe Natural Tobacco Company, which was found to have removed itself from the safe harbor protections of P.L. 86-272.
Key Issue:
The central question for the Supreme Court is whether the immunity provided by P.L. 86-272 applies when a company engages in activities in Oregon that are otherwise protected, specifically:
- Soliciting Orders: The company solicits requests for orders from retailers.
- Order Processing: The company sends these successfully solicited orders to wholesalers (its customers) for acceptance and processing.
- Fulfillment: If fulfilled, the orders are processed from the wholesaler's own inventory, which was previously purchased from the company.
Week Of 11.04.2024
The Oregon Tax Court has ruled that a notice of deficiency for corporation excise tax was valid despite a clerical error that misidentified the taxpayer as a corporation instead of a limited partnership.
The court found that the notice provided sufficient information to alert the taxpayer to the deficiency, including the correct mailing address, amount of deficiency, reasons for the assessment, and instructions for appeal.
Additionally, the Oregon Department of Revenue has replaced the Tax Information Authorization and Power of Attorney for Representation Form (POA form) with two new forms: Form OR-AUTH-REP (Authorization to Represent) and Form OR-AUTH-INFO (Authorization to Receive Tax Information). These new forms address taxpayer concerns about which form to use for representation or information. The POA form will be accepted until January 1, 2025, after which it will be permanently discontinued.
Week Of 11.21.2024
Oregon Corporate Income Tax—U.S. Supreme Court action—petition for certiorari filed in Oregon case.
The U.S. Supreme Court has been asked to review an Oregon Supreme Court case which held that an out-of-state tobacco manufacturer removed itself from the safe harbor of P.L. 86-272 when its representatives went beyond soliciting orders in Oregon on behalf of wholesalers by taking prebook orders. The question presented to the court is whether P.L. 86-272 immunity applies for a company when it engages in otherwise protected activities in Oregon to solicit requests for orders from retailers if it also sends successfully solicited retailer requests for orders to wholesalers (i.e., the company's customers) for wholesalers to accept and process, and, if ultimately fulfilled, to be fulfilled by the wholesaler from the wholesaler's own inventory of product that it previously purchased from the company (i.e., the wholesaler makes the sale to the retailer). (Santa Fe Natural Tobacco Co. v. Dept. of Rev., Or. S. Ct., Dkt. No. SC S069820, 06/20/2024, cert. filed, U.S. S. Ct., Dkt. No. 24-551, 11/15/2024.)
Week Of 11.04.2024
Oregon Corporate Income Tax—Oregon Tax Court holds clerical error did not invalidate notice of deficiency.
The Oregon Tax Court held that a notice of deficiency of corporation excise tax issued by the Department of Revenue was valid for the tax year ending December 31, 2018, despite the taxpayer being misidentified as a corporation instead of a limited partnership. The court found that the notice was adequate under Or. Rev. Stat. § 305.265 because it provided sufficient information to alert the taxpayer to the deficiency. Specifically, the notice was sent to the correct mailing address to the attention of the individual responsible for the taxpayer's tax affairs and it included all the necessary details, such as the amount of deficiency, reasons for the assessment, statutory references, and instructions for appeal. Further, the taxpayer understood the notice as evidenced by its timely request for a conference to contest the deficiency. In addition to finding the notice was adequate under the statute, the court found the doctrine of substantial compliance supported the view that clerical errors should not invalidate tax notices if they still fulfill their essential purpose of notifying the taxpayer. (Fresenius Medical Care NA Holdings LP v. Department of Revenue, Or. Tax Ct., Magis. Div., Dkt. No. TC-MD 230444R, 10/31/2024.)
Oregon General Administrative Provisions—Oregon Revenue replaces POA form with new authorization forms.
To accommodate taxpayers who require other parties to receive and handle their confidential tax information or to act and make decisions on their behalf with the Oregon Department of Revenue, the state's Tax Information Authorization and Power of Attorney for Representation Form (POA form) has been replaced with two new authorization forms. Form OR-AUTH-REP (Authorization to Represent) and Form OR-AUTH-INFO (Authorization to Receive Tax Information) can be used beginning November 1, 2024. The new forms respond to concerns taxpayers shared with the Department about what form to use when seeking representation or information. The Department will accept the POA form until January 1, 2025, after which it will be permanently discontinued. (Department of Revenue Releases New Authorization Forms for Taxpayers, Or. Dept. Rev., 11/01/2024.)
Week Of 11.21.2024
Oregon Corporate Income Tax—U.S. Supreme Court action—petition for certiorari filed in Oregon case.
The U.S. Supreme Court has been asked to review an Oregon Supreme Court case which held that an out-of-state tobacco manufacturer removed itself from the safe harbor of P.L. 86-272 when its representatives went beyond soliciting orders in Oregon on behalf of wholesalers by taking prebook orders. The question presented to the court is whether P.L. 86-272 immunity applies for a company when it engages in otherwise protected activities in Oregon to solicit requests for orders from retailers if it also sends successfully solicited retailer requests for orders to wholesalers (i.e., the company's customers) for wholesalers to accept and process, and, if ultimately fulfilled, to be fulfilled by the wholesaler from the wholesaler's own inventory of product that it previously purchased from the company (i.e., the wholesaler makes the sale to the retailer). (Santa Fe Natural Tobacco Co. v. Dept. of Rev., Or. S. Ct., Dkt. No. SC S069820, 06/20/2024, cert. filed, U.S. S. Ct., Dkt. No. 24-551, 11/15/2024.)
Week Of 11.04.2024
Oregon Corporate Income Tax—Oregon Tax Court holds clerical error did not invalidate notice of deficiency.
The Oregon Tax Court held that a notice of deficiency of corporation excise tax issued by the Department of Revenue was valid for the tax year ending December 31, 2018, despite the taxpayer being misidentified as a corporation instead of a limited partnership. The court found that the notice was adequate under Or. Rev. Stat. § 305.265 because it provided sufficient information to alert the taxpayer to the deficiency. Specifically, the notice was sent to the correct mailing address to the attention of the individual responsible for the taxpayer's tax affairs and it included all the necessary details, such as the amount of deficiency, reasons for the assessment, statutory references, and instructions for appeal. Further, the taxpayer understood the notice as evidenced by its timely request for a conference to contest the deficiency. In addition to finding the notice was adequate under the statute, the court found the doctrine of substantial compliance supported the view that clerical errors should not invalidate tax notices if they still fulfill their essential purpose of notifying the taxpayer. (Fresenius Medical Care NA Holdings LP v. Department of Revenue, Or. Tax Ct., Magis. Div., Dkt. No. TC-MD 230444R, 10/31/2024.)
Oregon General Administrative Provisions—Oregon Revenue replaces POA form with new authorization forms.
To accommodate taxpayers who require other parties to receive and handle their confidential tax information or to act and make decisions on their behalf with the Oregon Department of Revenue, the state's Tax Information Authorization and Power of Attorney for Representation Form (POA form) has been replaced with two new authorization forms. Form OR-AUTH-REP (Authorization to Represent) and Form OR-AUTH-INFO (Authorization to Receive Tax Information) can be used beginning November 1, 2024. The new forms respond to concerns taxpayers shared with the Department about what form to use when seeking representation or information. The Department will accept the POA form until January 1, 2025, after which it will be permanently discontinued. (Department of Revenue Releases New Authorization Forms for Taxpayers, Or. Dept. Rev., 11/01/2024.)