Substantial Nexus Guidelines for the Corporate Activity Tax (CAT)

# (1)

(1) For purposes of ORS 317A.116, substantial nexus exists if a connection between the person and Oregon is sufficient to establish nexus under the U.S. Constitution.

# (2)

(2) "Substantial nexus" for corporate activity tax jurisdiction purposes, under the Commerce Clause of the U.S. Constitution, does not require a person to have a physical presence in Oregon. Substantial nexus exists where a person regularly takes advantage of Oregon's economy to realize commercial activity for the person and may be established through the significant economic presence of the person in the state.

# (3)

(3) When determining whether a person has substantial nexus with Oregon, the department may consider whether the person:

(a) Maintains continuous and systematic contacts with Oregon's economy or market;

(b) Conducts deliberate marketing to, or solicitation of, Oregon customers;

(c) Files or is required to file reports or returns with Oregon regulatory bodies;

(d) Realizes significant gross receipts attributable to customers in Oregon;

(e) Realizes significant gross receipts attributable to the use of the person's intangible property in Oregon; or

(f) Receives benefits provided by the state, such as:

(A) Laws providing protection of business interests or regulating consumer credit;

(B) Access to courts and judicial process to enforce business rights including debt collection and intellectual property rights;

(C) Highway or transportation system access for transport of the person's goods or services;

(D) Access to an educated workforce in Oregon; or

(E) Police and fire protection for property in Oregon that displays the person's intellectual or intangible property.

# (4)

(4) The list of possible facts in section (3) that the department may consider in determining whether a person has substantial nexus with Oregon is meant to be nonexclusive, and those facts should be considered only to the extent they are relevant. The department may consider any other relevant facts and circumstances.

[Publications: Contact the Oregon Department of Revenue for information about how to obtain a copy of the publication referred to or incorporated by reference in this rule pursuant to ORS 183.360(2) and ORS 183.355(1)(b).]