Oregon Administrative Rules
Chapter 150 - DEPARTMENT OF REVENUE
Division 318 - CORPORATION INCOME TAX ACT OF 1955: RULES
Section 150-318-0040 - Income Subject to Tax Under ORS Chapter 318

(1) The Oregon Corporation Income Tax is imposed on corporations with income derived from sources within this state. The term "income derived from sources within this state" means income from activities in this state that are insufficient to constitute "doing business." "Doing business" is defined in ORS 317.010(4).

(2) Oregon's jurisdiction to tax is limited by the Due Process Clause of the U.S. Constitution, which requires the existence of some minimum connection between the state and the person, property or transaction it seeks to tax. This minimum connection, making income subject to the Oregon income tax, may be satisfied by:

(3) A corporation with receipts from royalties or franchise fees or the sale or transfer of tangible personal property pursuant to franchise or license agreements may be subject to the Corporation Excise Tax if the corporation engages in activities that rise to the level of doing business in Oregon. Such activities include inspection of the franchisees' businesses or records and providing training in Oregon to franchisees. Such a corporation is not subject to the Corporation Income Tax.