Relating to apportionment of business income; prescribing an effective date.
Summary
HB 2115 changes Oregon’s corporate excise tax apportionment rules for business income by removing a specific sourcing rule for sales of tangible personal property shipped from Oregon to a state where the seller is not taxable. Under current law, those sales are generally treated as Oregon sales for the sales factor used to apportion income; the bill deletes that rule, narrowing the circumstances in which such out-of-state sales are counted as Oregon sales. The bill leaves in place the existing rules for sales delivered within Oregon, sales to the U.S. government, and the market-based sourcing rules for sales other than tangible personal property.
The measure also preserves the Department of Revenue’s authority to adopt consistent rules and to disregard warehouse arrangements that are primarily used for tax avoidance. It applies prospectively to tax years beginning on or after January 1, 2026, and takes effect 91 days after adjournment sine die. In practical terms, the bill would alter how certain multistate businesses calculate Oregon apportionment, potentially reducing Oregon-sourced sales for companies that ship goods from Oregon into states where they are not subject to tax.
Impact
HB 2115 amends ORS 314.665, the statute governing Oregon’s sales factor for apportioning business income under the corporate excise tax. By striking the rule that treated sales shipped from Oregon to a state where the taxpayer is not taxable as Oregon sales, the bill would change the numerator of the sales factor for affected taxpayers and could reduce Oregon tax liability for some multistate sellers. The bill does not change the general market-based sourcing framework for services and intangibles, nor does it alter the public warehouse anti-abuse provisions or the Department of Revenue’s rulemaking authority.
Sentiment
No committee transcript or vote record was provided, so there is no direct evidence of debate, amendments, or recorded support/opposition. Based on the text alone, the bill appears to be a technical but meaningful tax policy change aimed at narrowing Oregon sourcing rules for certain interstate sales. The absence of recorded legislative history makes overall sentiment difficult to assess beyond the bill’s straightforward, tax-administration focus.
Contention
The main point of contention is likely the tax treatment of sales shipped from Oregon to states where the seller is not taxable. Supporters would likely view the bill as a correction or simplification of apportionment rules, while opponents may see it as reducing Oregon’s tax base and benefiting multistate businesses. Another possible issue is whether the change creates competitive advantages for companies using Oregon warehouses or shipping networks, although the bill retains anti-avoidance authority for public warehouse arrangements.
Prohibits municipal agency from approving applications for development of certain warehouses unless certificate of need is issued by Office of Local Planning Services in DCA.