Instructions For Form 20 - Oregon Corporation Excise Tax

Interstate broadcasters (HB 4138)

corporation’s ownership share of LLC property, payroll,

and sales in the apportionment percentage calculation

For tax years beginning on or after January 1, 2014, and

on Schedule AP, Apportionment of Income for Corporations

before January 1, 2017, an interstate broadcaster’s appor-

and Partnerships, 150-102-171. (OAR 150-314.650)

tionment will be determined based on the commercial

Foreign LLCs are identified as unincorporated associa-

domicile method. Gross receipts are sourced to Oregon,

tions organized under the laws of a state other than Ore-

if the commercial domicile of the customer is in this state

gon, or a foreign country. Oregon’s definition of a foreign

or the customer is a resident of this state.

LLC includes an unincorporated association organized

For tax years beginning on or after January 1, 2017, an

under the laws of a federally recognized American

interstate broadcaster’s apportionment will be deter-

Indian tribe, no matter when organized.

mined based on the audience factor method. Gross

receipts are sourced to Oregon in the ratio that the broad-

Political organizations

caster’s audience or subscribers located in this state bears

Political organizations (for example, campaign commit-

to its total audience and subscribers located both within

tees and political parties) normally don’t pay state or fed-

and without this state. See ORS 314.680 to 314.690 and

eral taxes. However, income earned from investments is

HB 4138 for more information including year-specific

taxable. Examples include interest earned on deposits,

definitions.

dividends from contributed stock, rents or royalties, and

If your corporation, or one or more of the affiliates fil-

gains from the sale of contributed property. We follow

ing as part of your consolidated return, is an interstate

the federal definitions of political organizations and tax-

broadcaster, check the box for Question N on your Form

able income.

20. Include a schedule with your return that clearly

A political organization that isn’t incorporated and hasn’t

shows for each interstate broadcaster affiliate: (1) total

elected to be taxed as a corporation should file a personal

gross receipts from broadcasting, (2) broadcasting gross

income tax return under ORS 316.277(2).

receipts sourced to Oregon using the commercial domi-

cile method of apportionment, and (3) broadcasting

For

information,

including

how

file

gross receipts sourced to Oregon as if the audience factor

your return, search “Political Organizations” at

method had been used.

Limited liability companies (LLCs)

Publicly traded partnerships

Oregon follows federal law in determining how an LLC

A “publicly traded partnership” is a partnership treated

is taxed. Federal law doesn’t recognize an LLC as a clas-

as a corporation for federal tax purposes under IRC §7704.

sification for federal tax purposes. An LLC business

The partners in a publicly traded partnership aren’t

entity must file a corporation, partnership or sole pro-

prietorship tax return, depending on elections made by

subject to tax on their distributive shares of partnership

the LLC and the number of members. An LLC is always

income. A publicly traded partnership taxed as a cor-

classified under federal law as one of these types of tax-

poration must file Form 20 if doing business in Oregon,

able entities.

or Form 20-I if not doing business in Oregon but the

publicly traded partnership is receiving Oregon-source

A multi-member LLC can be either a partnership or a

income.

corporation, including an S corporation. A single mem-

ber LLC (SMLLC) can be either a corporation or a single

Real Estate Mortgage Investment Conduits

member “disregarded entity.” Refer to federal law for

(REMICs)

more information and requirements.

A REMIC isn’t subject to Oregon tax; the income is tax-

An LLC taxed as a C corporation must file Form 20 if

able to the holders of the REMIC’s interests under ORS

doing business in Oregon, or Form 20-I if not doing busi-

chapter 316, 317, or 318, whichever is applicable. A REMIC

ness in Oregon but the LLC is receiving Oregon-source

must file Form 20-I if it gets prohibited transaction

income. The LLC must file Form 20-S if the entity files

income from Oregon sources or has any resident holders

federal Form 1120-S.

of a residual interest. Income is from an Oregon source

if it comes from tangible property located in Oregon or

An LLC taxed as a partnership must file Form 65, Ore-

from intangible property used in Oregon.

gon Partnership Return, 150-101-065, if doing business in

Oregon, or if receiving income from an Oregon source,

All REMICs required to file must file Form 20-I and

or if it has any Oregon resident members. If the LLC has

attach a complete copy of federal Form 1066. The REMIC

a corporate member, the member is taxed on its share of

must also attach a federal Schedule Q for each residual

the LLC’s Oregon income.

interest holder for each quarter of the tax year. Enter the

amount of net income from prohibited transactions from

If an LLC is part of a corporation’s overall business

operations and is treated as a partnership, include the

federal Form 1066 Schedule J. (ORS 314.260)

150-102-020-1 (Rev. 10-14)

Form 20 Instructions

Instructions For Form 20 - Oregon Corporation Excise Tax - 2014 Page 7

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