|CALENDAR STATUS: Active|
|AT&T Corp. and Includible Subsidiaries v. Department of Revenue|
|Supreme Court Courtroom|
|John H. Gadon on behalf of AT&T Corp. and Includible Subsidiaries|
Marilyn J. Harbur on behalf of Department of Revenue
Statement of Issues:
|AT&T Corp. and Includible Subsidiaries v. Department of Revenue (S060150) (direct review, pursuant to ORS 305.445, of a general judgment entered by the Oregon Tax Court).|
AT&T Corp. and Includible Subsidiaries (AT&T) has filed an appeal from a Tax Court judgment that denied AT&T's claim for a refund of a portion of the Oregon corporate excise taxes paid by AT&T for tax years 1996 through 1999. The case concerns whether AT&T's receipts from interstate and international telecommunications services billed to Oregon customers should be included in the sales factor for calculating AT&T's Oregon corporate excise tax for the years in question.
On direct review, the issues are:
(1) Are services billed to Oregon customers a proper focus of inquiry for determining whether receipts should be included in calculating AT&T's Oregon corporate excise tax where ORS 314.665(4) provides that sales will be included in the sales factor only when a greater proportion of the taxpayer's "income producing activity" giving rise to the receipts is performed in Oregon than in any other state based on costs of performance?
(2) Under OAR 150-314.665(4), which defines the costs of income producing activity as "direct costs determined in a manner consistent with generally accepted accounting principles and in accordance with accepted conditions or practices in the trade or business of the taxpayer, " are AT&T's costs associated with building and maintaining its entire network direct costs of its income producing activity for interstate and international telecommunications services billed to Oregon customers?
(3) Are the access charges that AT&T pays to local exchange carriers to connect interstate and international calls properly included as direct costs under OAR 150-314.665(4), or should they be excluded as activity "performed on behalf of the taxpayer" by a third party?
The foregoing summary of a Supreme Court case that is scheduled for oral argument has been prepared for the benefit of the public. Parties and practitioners should rely on neither the factual summary set out above, nor the statement of issues to be decided, as delineating the questions that the Supreme Court ultimately may consider on review. See generally Oregon Rule of Appellate Procedure 9.20.
Justice(s) NOT Participating: