Department of Revenue
Chapter 150
Division 317
CORPORATION EXCISE TAX ACT OF 1929: RULES AND GENERAL PROVISIONS
150-317-1170
Farming Operations: Clarifying Definitions for Agricultural Commodities, Farming Operations, Out of State Sales Based on Industry Averages
(1)(a) General rule: A taxpayer that is engaged in a farming operation, as defined in ORS 317A.102(1)(c), that sells agricultural commodities to a broker, wholesaler, or processor may demonstrate the amount of the taxpayer’s goods sold in this state compared to outside this state, for purposes of determining commercial activity, by:
(A) Obtaining an out-of-state resale certificate as provided in OAR 150-317-1400;
(B) Obtaining a certificate from the broker, wholesaler, or processor receiving an agricultural commodity from the taxpayer that states the percentage of the taxpayer’s goods sold in this state compared to outside this state; or
(C) Using an industry average percentage for sales of the agricultural commodity made the previous tax year, based on the most recent information from the United States Department of Agriculture National Agricultural Statistics Service and other sources of sales information.
(b) The phrase “other sources of sales information” includes any publication by a governmental entity or trade association that publishes agricultural commodity sales information.
(c) “Agricultural commodities” include all agricultural, horticultural, viticultural, and vegetable products, including bees and honey, regardless of the state in which they were produced.
(2) Certificate Requirements: A farming operation taxpayer that seeks to demonstrate the percentage of the taxpayer’s goods sold in this state compared to outside this state by obtaining a certificate, pursuant to section (1)(a)(B) of this rule, from the broker, wholesaler, or processor, must obtain the certificate by the due date of the return, including extensions. The certificate provided by the broker, wholesaler, or processor to the seller must contain:
(a) The broker, wholesaler, or processor’s legal name and Oregon address;
(b) The broker, wholesaler, or processor’s federal tax identification number;
(c) The date of purchase;
(d) The total amount of purchased property;
(e) The purchase price paid by the broker, wholesaler, or processor;
(f) The percentage of purchased property that the broker, wholesaler, or processor will resell outside of Oregon; and
(g) The signature of the broker, wholesaler, or processor, their authorized representative, or employee, certifying that the person is a broker, as that term is defined in ORS 317A.102(1)(b), a wholesaler, as that term is defined in ORS 317A.100(21), or a processor, as that term is defined in ORS 317A.102(1)(d).
(3) Industry Average Statistics: A farming operation taxpayer that seeks to demonstrate the percentage of the taxpayer’s goods sold in this state compared to outside this state by using industry average statistics, pursuant to section (1)(a)(C) of this rule, must rely on statistics for the specific sub-type of agricultural commodity sold, where available, or may rely on statistics for the general type of agricultural commodity where sub-type statistics are unavailable for the specific agricultural commodity.
Statutory/Other Authority: ORS 305.100 & 317A.143
Statutes/Other Implemented: ORS 317A.102
History:
REV 17-2023, amend filed 10/20/2023, effective 11/01/2023
REV 3-2023, minor correction filed 01/26/2023, effective 01/26/2023
REV 23-2020, adopt filed 11/30/2020, effective 12/01/2020