In
Health Net Inc. v. Dep't of Revenue,
Docket No. S063625 (Apr. 12, 2018), the Oregon Supreme
Court rejected a business taxpayer's constitutional challenges
to a 1993 Oregon statute that eliminated the right to utilize a
three-factor apportionment formula in calculating Oregon income
tax. The Oregon Supreme Court joined courts in Texas, Minnesota,
California and Michigan in rejecting taxpayer arguments that states
which have enacted Article IV of the Multistate Tax Compact,
thereby incorporating the UDITPA three-factor (payroll, property
and sales) formula, have entered into a binding contractual
obligation which may not be overridden.
Oregon enacted UDITPA in 1965 (ORS 314.605 – 314.675) and
the Multistate Tax Compact (including Article IV) (ORS 305.655), in
1967. In 1993, however, following a series of amendments to the
apportionment formula in Oregon's version of UDITPA, which
moved the state to a single sales factor formula, the Oregon
legislature eliminated
