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LIC-6.16 - Apportionment for Domestic Insurers

APPORTIONMENT FOR DOMESTIC INSURERS
Administrative Rule Adopted by Revenue Bureau Pursuant to Rule-Making Authority
ARB-LIC-6.16

If the income of a domestic insurer is derived from business activity both within and without the City of Portland and/or Multnomah County, the determination of City or County apportionment is arrived at by using an "insurance sales factor" consistent with ORS 317.660:

 

(a)  dividing the direct premiums (excluding reinsurance accepted and without deduction of reinsurance ceded) received by the insurer during the taxable year on policies and contracts which are located within the City or County by

 

(b)  the total of such premiums received by the insurer during the taxable year on policies and contracts which have been sold everywhere.

 

Example 1: Joe’s Dental Plan, Inc. (JDPI) is a domestic insurance provider. All of JDPI’s insurance contracts are with individuals and families.  JDPI’s only income is from premiums and insurance contracts. To compute the business taxes due to the City or County, JDPI will apportion its net income by multiplying it by a fraction, the numerator of which is the total direct premiums received from insurance contracts with individuals and families located within the City or County during the tax year, and the denominator of which is the direct premiums of individuals and families located everywhere during the tax year.

 

Example 2:  Contracts, Ltd (CL) is a domestic insurance provider with offices throughout Oregon, and is headquartered in Portland.  CL provides insurance to businesses and, in some cases, their employees. To compute the business taxes due, CL will apportion its net income by multiplying it by a fraction, the numerator of which is the total direct premiums that CL received from insurance contracts with businesses located within the City or County (regardless of the home address of employees obtaining insurance), and the denominator of which is the direct premiums earned everywhere during the tax year.
 

  
REFERENCES
 
Portland City Code Section 7.02.610 C.
 
Multnomah County Code Section 12.610 C.
 

Other References: ORS 731.840 & 317.660

 


  
HISTORY

Revised administrative rule adopted by Director of Revenue Bureau January 24, 2011.

Revised administrative rule adopted by Director of Revenue Bureau August 10, 2009.

Submitted for inclusion in PPD September 17, 2002.
Originally adopted as Bureau of Licenses Administrative Rule 610.93-6 November 23, 1993.

Table of Contents
LIC-6.01 - Payments Deemed to be Compensation to Owners
LIC-6.02 - Self-Employment Tax Deduction and Health Care Premium Deduction
LIC-6.03 - Change of Ownership During the Year and Calculation of the Compensation Allowance Deduction
LIC-6.04 - Patronage Dividends
LIC-6.05 - Short Periods Count as Tax Year
LIC-6.06 - Definition of Controlling Shareholders and Calculation of Number of Controlling Shareholders
LIC-6.07 - Treatment of Currently Taxed Pass-Through Income
LIC-6.08 - Partnerships - Partner Level Deduction Election
LIC-6.09 - Qualified Retirement Plans
LIC-6.10 - De Minimus Business Activity for Personal Services
LIC-6.11 - Apportionment of Gains and Incomes Due to Sale of a Business
LIC-6.12 - Business Activity and Apportionment of Sales of Tangible Personal Property
LIC-6.13 - De Minimus Business Activity for Tangible Personal Property
LIC-6.14 - Apportionment of Gross Income from Business Activities Other than Sales of Tangible Personal Property
LIC-6.15 - Apportionment for Banking Income
LIC-6.16 - Apportionment for Domestic Insurers
LIC-6.17 - Apportionment for Freight Carriers
LIC-6.18 - Apportionment for Passenger Carriers
LIC-6.19 - Apportionment for Incomes Subject to PCC Chapters 7.12 or 7.14
LIC-6.20 - Apportionment for Providers of Electronic or Telephonic Services