LIC-6.20 - Apportionment for Providers of Electronic or Telephonic Services - for tax years beginning on or before 12/31/2022

Administrative Rules Adopted by Bureaus Pursuant to Rule Making Authority (ARB)
Policy category
Policy number
LIC-6.20
APPORTIONMENT FOR PROVIDERS OF ELECTRONIC OR TELEPHONIC SERVICES
Administrative Rule Adopted by Revenue Division Pursuant to Rule-Making Authority
ARB-LIC-6.20

Note: This rule sunsets 12/31/2022 and does not apply to tax years beginning on or after 1/1/2023.

If the income of a service provider of electronic or telephonic services is derived from business activity occurring both within and without the City of Portland and/or Multnomah County, the gross income earned within the City or County shall be determined as earned at the situs of delivery and/or use of such services.

Example 1: Gross incomes from delivery and/or use of electronic or electrical signals shall be included in the numerator of the apportionment fraction for the City of Portland and/or Multnomah County if the location of the use of the electronic or electrical signals are within the City of Portland and/or Multnomah County.

Example 2: Gross incomes from the delivery and/or use of digital information other than general telephone services (such as computer services delivered via phone lines or coaxial cable) shall be included in the numerator of the apportionment fraction for Multnomah County and/or the City of Portland if such digital information is used within Multnomah County and/or the City of Portland. Examples include monthly subscription payments received from customers of internet service providers and per-use payments received from customers to view online content.

Example 3: Gross incomes from the delivery and/or use of telephonic services generated by electromagnetic radiation (e.g., cell phones and satellite phones) shall be included in the numerator of the apportionment factor if the service is billed or paid from an address located within the City of Portland and/or Multnomah County. Note: Since cell phone usage is generally mobile in nature, it is assumed that usage will be uniform over boundaries, therefore, it is determined the most logical assignment of incomes is to the billing address of the user of such services.

Example 4: Gross incomes from the delivery and/or use of long distance telephone services shall be included in the numerator of the apportionment factor if the long distance call originates or terminates within the City of Portland and/or Multnomah County and is billed or paid from an address located within the City of Portland and/or Multnomah County.

For purposes of this rule, gross incomes from custom computer programming services are not considered Electronic or Telephonic Services. Custom computer programming services would be considered personal services under LIC-6.14. It is not relevant that the completed product may be delivered electronically to the customer.

Note 1: This rule shall be effective for all returns, including amended returns, filed on or after the date of adoption of this rule.


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

HISTORY
 

Originally adopted as Bureau of Licenses Administrative Rule 610.99-1 December 28, 1999.

Submitted for inclusion in PPD September 17, 2002.

Amended by Director of Revenue Division October 1, 2015.

Amended by Director of Revenue Division March 6, 2023.

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