# Oracle Corp. and Subsidiaries v. Dept. of Rev.

> Oregon Tax Court · October 6, 2021

URL: https://www.frixlaw.com/law-library/cases/10607365

## Case

- **Court:** Oregon Tax Court
- **Decided:** October 6, 2021
- **Precedential status:** Unpublished
- **Opinion:** Opinion
- **Judges:** Manicke
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

IN THE OREGON TAX COURT
REGULAR DIVISION
Corporation Excise Tax

ORACLE CORPORATION AND )
SUBSIDIARIES, )
)
Plaintiff, ) TC 5340
v. )
)
DEPARTMENT OF REVENUE, STATE )
OF OREGON )
)
Defendant. ) ORDER GRANTING RECONSIDERATION

The court’s Order on Partial Summary Judgment dated December 16, 2020, denied each

party’s motion for partial summary judgment. Taxpayer’s 1 motion asked the court to determine

that ORS 317.267(3) requires the Dividends and Subpart F Income to be included in the sales

factor of the apportionment formula. The court denied Taxpayer’s motion, and neither party has

asked the court to reconsider that conclusion.

The Department’s motion asked the court to determine that ORS 314.665(6)(a) requires

Taxpayer to exclude the Dividends and Subpart F Income from the sales factor. The order

reached two conclusions on the Department’s motion. First, the order concluded that

“ORS 314.665(6)(a) does not apply to the unsubtracted portion of Taxpayer’s Subpart F Income

1
This order uses defined terms, abbreviations, and editions of relevant statutes as specified in the Order on
Partial Summary Judgment (on Reconsideration) of even date herewith.

ORDER GRANTING RECONSIDERATION TC 5340 Page 1 of 3
because there are no ‘gross receipts’ that constitute or match to Taxpayer’s Subpart F Income

* * *.” Oracle Corporation and Subsidiaries v. Dept. of Rev., ___ OTR___ (Dec 16, 2020) (slip

op at 34). The court refers to this issue as the “Gross Receipts Issue.” Both parties seek

reconsideration of the Gross Receipts Issue. Second, the order determined that “a genuine issue

of material fact exists regarding whether the Dividends arose from Taxpayer’s ‘holding’ of the

CFC stock and if so, whether under ORS 314.665(6)(a) the Dividends were derived from

Taxpayer’s primary business activity.” (Id.) The court refers to this issue as the “[Holding]

Issue.” The Department seeks reconsideration of the Holding Issue; Taxpayer resists

reconsideration of that issue.

As to the Gross Receipts Issue, the court is persuaded by the authorities cited in the

parties’ briefing on reconsideration, and other authorities, that the conclusion in the

December 16, 2020 order is incorrect. The court will grant reconsideration as to the Gross

Receipts Issue and will include further analysis in a new Order on Partial Summary Judgment

(on Reconsideration), as well as the conclusion that the Subpart F Income is within the definition

of “sales” under ORS 314.610(7).

As to the Holding Issue, the court will grant the Department’s motion for reconsideration

and modify its order to conclude that the Dividends and Subpart F Income were excluded from

“sales” as arising from the holding of the CFC stock, but that they may be reincluded in “sales”

if derived from an activity that constitutes the principal business activity of the payor CFC and

the principal business activity of Taxpayer.

For clarity, the text of the December 16, 2020, order is replaced in its entirety with the

text shown in the Order on Partial Summary Judgment (on Reconsideration). Now, therefore,

IT IS ORDERED that Defendant’s Motion for Reconsideration is granted; and

ORDER GRANTING RECONSIDERATION TC 5340 Page 2 of 3
IT IS FURTHER ORDERED that Plaintiff’s Motion for Reconsideration Concerning

Definition of Gross Receipts for Sales Factor Purposes is granted.

Dated this 6th day of October, 2021.

Signed: 10/6/2021 12:29 PM

_____________________________________

ORDER GRANTING RECONSIDERATION TC 5340 Page 3 of 3

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10607365. Public record. Not legal advice.