Department of Revenue
Chapter 150
Division 314
INCOME TAXATION GENERALLY
GENERAL PROVISIONS
150-314-0417
Payroll Factor; Numerator
(1) The numerator of the payroll factor is the total amount of compensation paid in this state during the tax period by the taxpayer. The tests in subsection (2) of ORS 314.660 to be applied in determining whether compensation is paid in this state are derived from the Model Unemployment Compensation Act. Accordingly, if compensation paid to employees is included in the payroll factor by use of the cash method of accounting or if the taxpayer is required to report such compensation under such method for unemployment compensation purposes, it shall be presumed that the total wages reported by the taxpayer to this state for unemployment compensation purposes constitutes compensation paid in this state except for compensation excluded under OAR 150-314-0415 above. The presumption may be overcome by satisfactory evidence that an employee’s compensation is not properly reportable to this state for unemployment compensation purposes.
(2) Guaranteed payments which represent compensation for services are included in the numerator of the factor if the compensation would have been subject to Oregon unemployment insurance tax if paid to an employee.
(3) Compensation is paid in this state if any one of the following tests, applied consecutively, are met:
(a) The employee’s service is performed entirely within the state.
(b) The employee’s service is performed both within and without the state, but the service performed without the state is incidental to the employee’s service within the state. The word “incidental” means any service which is temporary or transitory in nature, or which is rendered in connection with an isolated transaction.
(c) If the employee’s services are performed both within and without this state, the employee’s compensation will be attributed to this state:
(A) If the employee’s base of operations is in this state; or
(B) If there is no base of operations in any state in which some part of the service is performed, but the place from which the service is directed or controlled is in this state; or
(C) If the base of operations or the place from which the service is directed or controlled is not in any state in which some part of the service is performed but the employee’s residence is in this state.
(4) The term “base of operations” is the place of more or less permanent nature from which the employee starts work and to which the employee customarily returns in order to receive instructions from the taxpayer or communications from customers or other persons, or to replenish stock or other materials, repair equipment, or perform any other functions necessary to the exercise of the trade or profession.
(5) The term “place from which the service is directed or controlled” refers to the place from which the power to direct or control is exercised by the taxpayer.
[Publications: Publications referenced are available from the agency.]
Statutory/Other Authority: ORS 305.100
Statutes/Other Implemented: ORS 314.660
History:
Renumbered from 150-314.660(2), REV 35-2016, f. 8-12-16, cert. ef. 9-1-16
RD 3-1995, f. 12-29-95, cert. ef. 12-31-95
RD 5-1994, f. 12-15-94, cert. ef. 12-31-94
12-70