[Revenews] Multistate Tax Compact Apportionment Election - Protective Refund Claim

[HENDERSON Jeffrey S]

Hello Tax Professionals,

This release is intended for those of you with corporate clients that apportion income. Per Oregon Revised Statute (ORS) 314.606, the income apportionment election provided in Article III of the Multistate Tax Compact (Compact) is not available on an Oregon tax return. However, similar to the Gillette Company v. California Franchise Tax Board appeal in California, the Compact apportionment election is currently being challenged in Oregon tax court.

All corporation tax returns will be processed based on the department’s long-standing position that the Compact apportionment election is not available, but taxpayers may file a protective claim to secure the right to a refund. The department will defer action on all protective claims for refund until the outcome of the litigation is known. Protective claims for refund generally must be filed with the department by the later of three years from the due date of the original return, or the date the original return was filed – otherwise the statute of limitations for refund may expire.

Filing original tax returns:

All original tax returns filed using the Compact apportionment election will be adjusted. To preserve your right to a refund, file a protective claim after your original return is filed.

Protective refund claim filing instructions:


 *   Use the same form (i.e. Form 20) as originally filed, check the "Amended" box, and show computation of refund claim, or
 *   Send a letter with authorized signature that includes:
    *   Taxpayer name, FEIN, and BIN as shown on original return,​​
    *   Tax years involved,
    *   The amount of the refund claim for each year,
    *   The detail of the apportionment formula used, and
    *   Name of person to contact, phone number, and fax number.​​​
 *   Write the words "Protective Claim for Refund–Compact Apportionment Election" at the top in ink. Do not use red ink.​​​
 *   Mail to: REFUND, PO Box 14777, Salem, Oregon 97309-0960
 *   Retain a copy of the protective claim for your files.
IMPORTANT: Amended tax returns that use the Compact apportionment election will be denied unless identified and filed as a protective claim for refund as instructed above.


If you have any questions regarding this issue feel free to contact us by phone at 503-378-4988 or by e-mail at corp.help.dor at state.or.us<mailto:corp.help.dor at state.or.us>.




Jeff Henderson
Corporation Tax Policy Coordinator
Business Division/Corporation and Estate Section
Oregon Department of Revenue
(503) 947-2124
jeffrey.s.henderson at dor.state.or.us<mailto:jeffrey.s.henderson at dor.state.or.us>

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