Nonresident Partners: Other Methods of Allocation and Apportionment

(1) ORS 314.605 to 314.667 are designed to allocate and apportion to Oregon, in a fair and equitable manner, a nonresident partner’s items of partnership income, gain, loss and deduction attributable to a business, trade, profession or occupation carried on partly within and partly without the state of Oregon. If the methods provided under those sections do not so allocate and apportion these items, the department may permit a nonresident partner to allocate and apportion those items under an alternative method as proposed by the partner. An alternative method will be allowed only in limited and specific cases. ORS 316.124(4) may be invoked only in unusual fact situations (which ordinarily will be unique and nonrecurring). These are situations which will generally violate a nonresident partner’s rights under the constitution of Oregon or of the United States.

(2) An application to use an alternative method of allocation and apportionment must be made in writing. The request must a) specify why the standard method does not fairly represent the extent of the partnership’s Oregon business activity; b) specify how the standard method of allocation and apportionment violates the nonresident partner’s constitutional rights; and c) must include a detailed description of the alternative method.