Close
Close

Oregon Supreme Court holds electricity is tangible personal property for apportionment purposes

The Oregon Supreme Court has held that the sale of electricity constituted the sale of tangible personal property for Oregon corporation income tax apportionment purposes and should be sourced to the ultimate destination. In making this determination, the Supreme Court reversed and remanded the Oregon Tax Court’s holding that the sale of electricity constituted the sale of an intangible that should be sourced using costs of performance. However, the Supreme Court affirmed the Tax Court’s holding that the sale of natural gas (which was considered to be tangible personal property) was appropriately sourced based on the ultimate destination. Because the taxpayer delivered the natural gas to a hub in Oregon from which another company transported the gas to the purchaser’s out-of-state location, the natural gas sales were not sourced to Oregon.

Download the PDF.