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Daily Tax Report: State

Oregon Tax Court Determines Airline Apportionment Departure Ratio Includes Unitary Affiliate Flight Data, Excludes Codeshare, Passive Income Revenues

March 3, 2020, 5:00 AM

The Oregon Tax Court Feb. 28 partly granted Taxpayer’s and the Department of Revenue’s (DOR) summary judgment motions on the computation of corporate excise tax. Alaska Airlines, Inc. (Taxpayer) was one of two airlines wholly owned and operated by Alaska Air Group, and unitary affiliate of Horizon Air. The DOR audited Taxpayer’s corporate income tax return, and concluded that Horizon’s flight data must be included in Taxpayer’s departure ratio. Taxpayer raised issues whether the departure ratio must include Horizon’s flight data, transportation sales include codeshare revenue, and the transportation revenue in the numerator and denominator of sales factor must match....

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