Chevron Loses Bid for $14.8 Million Oregon Excise Tax Refund

Chevron U.S.A. Inc. failed to convince the Oregon Tax Court that gross receipts from its commodities hedging transactions should be included in its total sales when calculating how much of the company’s income the state can tax.

Chevron used derivative commodity instruments—including futures, options, and swaps—to manage the risks of volatility in the price of crude oil and other petroleum products. The company added the receipts from those transactions to the denominator of the sales factor on its 2011-2013 tax returns, which reduced the percentage of its overall business income that was apportioned to Oregon.

But those receipts can’t be ...