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CenturyTel, Inc. v. Dept. of Revenue

Summarized by: 

Date Filed: 03-07-2013
Case #: S059502
Kistler, J. for the Court; En Banc
Full Text Opinion: http://www.publications.ojd.state.or.us/docs/S059502.pdf

Tax Law: The Court will uphold an administrative rule defining a statutory term where the definition is consistent with the term as defined by the statute.

CenturyTel, Inc. (CenturyTel) appealed the Tax Court’s summary judgment in favor of the Department of Revenue (department) and ruling that the capital gain CenturyTel realized from the sale of its wireless assets was apportionable income under ORS 314.280. In 2002, CenturyTel sold its wireless assets and listed the capital gain in its 2002 state income return as “nonbusiness income,” which is not apportionable to the states in which CenturyTel engages in business. In auditing the return, the department reclassified the gain as apportionable “business income” under OAR 150-314.280-(B). In its appeal, CenturyTel argued that the department’s rule for determining “business income” was inconsistent with the statutory definition of “business income” found in ORS 314.280 because the rule was too broad. The Court disagreed and held the “business income” definition found within rule OAR 150-314.280-(B) was reasonable and consistent with its statutory definition. In addition, the Court held that CenturyTel’s gain was apportionable “business income” as defined by both the rule and the statute. Affirmed.