Oregon Supreme Court Affirms Lower Court Decision, Finds Company Liable for State Income Tax

The Oregon Supreme Court June 20 affirmed the lower court decision that a tobacco company is liable for state income tax for tax years 2010-2013. The issue before the court was whether a federal statutory limit on a state’s ability to impose income tax on out-of-state corporations precludes the state from taxing the company because its business in Oregon is limited. The court ruled that: 1) the company’s use of pre-book orders in Oregon, backed by agreements forcing wholesalers to accept the orders, exceeded the protection of the safe harbor provision for solicitation of orders; and 2) the company’s actions ...