News and Insights

Oregon Supreme Court Broadly Interprets Special Apportionment Statute in Comcast

Tax Development Aug 23, 2018

The application of the Oregon special apportionment factor for broadcasters to all business income was challenged by the taxpayer in Comcast Corp. v. Department of Revenue.1 Like many states, Oregon uses the single sales factor apportionment method for multistate business taxpayers to determine the income subject to tax by the state. In 1989, the Oregon Legislature created a special factor for any business that qualifies as an “interstate broadcaster,” meaning “a taxpayer that engages in the for-profit business of broadcasting to subscribers or to an audience located both within and without this state.”2 For an interstate broadcaster, the apportionment factor is the ratio of the broadcaster’s “gross receipts from broadcasting” to an Oregon audience to the broadcaster’s “gross receipts from broadcasting” to its total audience. In Comcast, the question before the court was what is included in the “gross receipts from broadcasting” for purposes of this calculation. 

The taxpayer argued that most of the gross receipts generated in the years at issue did not arise from “broadcasting” activities, which was defined as “the activity of transmitting any one-way electronic signal.” Only receipts that qualified as “broadcasting” should be included in the audience ratio formula. The Department of Revenue, however, interpreted the term to include “all gross receipts of an interstate broadcaster from transactions and activities in the regular course of its trade or business,”3 with a few unrelated exceptions.4 

The Oregon Supreme Court agreed with the Tax Court’s broad interpretation, citing legislative intent. The statute for special apportionment of broadcasters was directed to a class of taxpayers rather than to a class of income-generating activities. With the statute carving out a clearly stated exception for sales of real or tangible property, the implication is that this is the only exception from the term of “gross receipts from broadcasting.” This interpretation of the broadly written special apportionment factor could have widespread application to other broadly written provisions. 

1 SC S064698.
2 ORS 314.680(3).
3 ORS 314.680(2).
4 The statute provides an exception for nonprofit broadcasters and for sales of real and tangible personal property.


Mark Nachbar

Mary Bernard