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Schedule OR-AP Instructions 2023
Apportionment of Income for Corporations and Partnerships
This publication is a guide, not a complete statement, of Oregon Revised Statutes (ORS) and
Oregon Administrative Rules (OAR). For more information, refer to the laws and rules at www.oregon.gov/dor.

and are part of the unitary group. The numerators of the
Purpose of Schedule OR-AP factors must include the Oregon property, payroll, and sales
from each of the corporations taxable by Oregon. Include a
Schedule OR‑AP is used for all corporations and partner‑
schedule showing the denominators and numerators of the
ships that are doing business in more than one state and
property, payroll, and sales factors by each entity included in
may be used with Forms OR‑20, OR‑20‑INC, OR‑20‑INS,
the Oregon consolidated return.
OR‑20‑S, and OR‑65.
Insurance companies. Insurers with a separate return fil‑
ing requirement are treated as if they are nonunitary affili‑
General information
ates of a consolidated group. Don’t include their factors in
Oregon income is the total of the business entity’s appor‑ the federal consolidated group.
tioned and allocated income assigned to Oregon. Rounding. When computing the factor percentages round
Each business carrying on a unitary business both inside the percentage to four decimal places. For example, 12.34558
and outside Oregon must complete Schedule OR‑AP. percent should be 12.3456 percent.

Apportionment and allocation. Apportionment is divid‑
Line instructions
ing apportionable income among the states by use of a
formula. Allocation is the assignment of specific nonap‑ Note: Please complete all sections of Schedule OR‑AP, part 1.
portionable income to a state. Most business entities having
unitary business activities, as defined in ORS 317.705, both Lines 1 through 9. Property/real estate income and inter-
inside and outside Oregon must use the apportionment est factor (all companies except insurance companies).
and allocation methods provided in the Uniform Division Enter all owned or rented business property in the “every‑
of Income for Tax Purposes Act (UDITPA) (ORS 314.605 where” portion of Schedule OR‑AP, part 1. Enter business
through 314.675). Certain types of business entities are property owned or rented within Oregon in the Oregon
required to use modified apportionment factors or sourc- portion. See ORS 314.655 and the supporting administra‑
ing rules as specified in the Oregon Revised Statutes below tive rules for more information.
and Oregon Administrative Rules. Value owned property at original cost. Show the average
Airlines .....................................................ORS 314.280 value during the taxable year of real and tangible personal
Electricity and natural gas .....................ORS 314.280 property used in the business. This is the average of prop‑
Financial corporations ............................ORS 314.280 erty values at the beginning and end of the tax period. An
Insurance companies ..............................ORS 317.660 average of the monthly values may be required if it results in
Interstate river transportation a more reasonable value.
companies ..............................................ORS 314.280
Long‑term construction contractors .....ORS 314.615 Value rented property at eight times the annual rental value.
Movie and television production Reduce the annual rental value by nonbusiness sub rentals.
companies ..............................................ORS 314.615
Publishing companies ............................ORS 314.667 Real estate income (insurance companies only)
Railroads ..................................................ORS 314.280 Lines 7a and 7b.
Sea transportation companies ...............ORS 314.280
Trucking companies ...............................ORS 314.280 • Life companies—Annual statement, page E‑01, Schedule
Utility and telecommunications A, part 1, column 16 minus column 17, and page E‑03,
companies ..............................................ORS 314.280 Schedule A, part 3, column 19 minus column 20.
If another method of apportionment or allocation of income • P&C companies—Annual statement, Schedule A, part 1,
is proposed, the business must still complete Schedule OR‑AP. pages E‑01 and E‑03, column 16 minus column 17, and
See Appendix C of the instructions for Forms OR‑20, OR‑ Schedule A, part 3, column 19 minus column 20.
20‑INC, OR‑20‑INS, and OR‑20‑S for more details. If you have income from a joint venture, partnership, or
LLC, include real estate income and interest included on:
Schedule OR-AP, part 1
• Life companies—Annual statement, page 8, exhibit of net
Consolidated returns. The denominators of the property, investment income, line 8, column 1.
payroll, and sales factors include only amounts from corpo‑ • P&C companies—Annual statement, page 12, exhibit of
rations that are included in the consolidated federal return net investment income, line 8, column 1.

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Real estate interest (insurance companies only) • Life companies—Annual statement, “Premiums and
Annuity Considerations,” page 49, schedule T, lines 38
Lines 8a and 8b.
and 95. Insurance premiums include life insurance in col‑
• Life companies—Annual statement, page 8, exhibit of net umn 2, annuity considerations in column 3, and accident
investment income, line 3, column 1. and health insurance premiums in column 4.
• P&C companies—Annual statement, page 12, exhibit of • P&C companies—Annual statement, “Schedule of Premi‑
net investment income, line 3, column 1. ums Written,” page 94, schedule T, lines 38 and 59, columns
2 and 8. Finance and service charges are included in the
Lines 9a and 9b. All companies except insurance compa‑
apportionment factor for premiums.
nies total lines 1 through 6. Insurance companies only total
lines 7 and 8. ORS 317.660 provides that the insurance sales factor doesn’t
include reinsurance accepted and there’s no deduction
Payroll factor (wage and commission)
of reinsurance ceded. If the exclusion of reinsurance pre‑
Lines 10a and 11a. Assign payroll to Oregon if: miums results in an apportionment formula that doesn’t
fairly represent the extent of the insurance company’s
• The services are performed entirely inside Oregon; or
activity in Oregon, you may submit an alternative appor‑
• The services are both inside and outside Oregon but those tionment request to include reinsurance premiums in the
services outside are only incidental; or insurance sales factor. See Appendix C in Form OR‑20‑INS
• Some of the services are performed in Oregon and (a) the Instructions.
base of operation or control is located in Oregon, or (b)
the base of operation or control isn’t in any state in which Apportionment percentage
the services are performed, and the employee’s residence Line 22a. All companies except insurance companies total
is in Oregon. See ORS 314.660 and the supporting admin‑ lines 13 through 18. Insurance companies total lines 19
istrative rules for more information. through 21.
Insurance companies use the wage and commission Line 22b. Enter total everywhere sales. If you’re filing a con‑
amounts from the annual statement. solidated return, only include amounts from corporations
Sales factor (all companies except insurance companies that are included in the consolidated federal return and are
complete lines 13 through 18) part of the unitary group.
Assign sales to Oregon if: Line 23. Use the worksheets on page 3 to compute your
Oregon apportionment percentage.
• The property is shipped or delivered to a purchaser in
Oregon other than the United States Government; or
• The property is shipped from a warehouse or other place Schedule OR-AP, part 2, taxable income
of storage in Oregon; and (a) the purchaser is the United
computation
States Government or (b) the business isn’t taxable in the
state of the purchaser. See ORS 314.665(3) and 314.665(2)(b)
(A) for exceptions. Note: This part of the schedule is used for computation
of entity level Oregon taxable income for Form OR‑20,
See ORS 314.620 and Public Law 86‑272 to determine if a OR‑20‑INC, OR‑20‑INS, and OR‑20‑S filers. Most pass‑
business is taxable in another state. through entities (PTEs) don’t complete Schedule OR‑AP,
Charges for services are Oregon sales if taxpayer’s market part 2. However, they may use it to determine the Oregon‑
source distributive income for their owners.
for sales is in this state. See ORS 314.665 and 314.666, and
OAR 150‑314‑0435 for more information. Line 1. Enter amount from Form OR‑20, line 5; Form OR‑20‑
INC, line 5; Form OR‑20‑INS, line 11; or Form OR‑20‑S, line 4.
Gross receipts from hedging transactions and the matu‑
rity, redemption, sale, exchange, loan, or other disposition To determine the Oregon‑source distributive income for the
of cash or securities should be omitted from the sales fac‑ owners of PTEs, enter only the modified distributive income
tor if the taxpayer reports according to ORS 314.605 to ORS for the entity on line 1 (ORS 314.775). Forms OR‑65 and OR‑20‑S
314.675. See ORS 314.610(7)(a)(A) for more information. Dif‑ have schedules I and SM for figuring your Oregon modifica‑
ferent rules apply to financial institutions as defined by tions that pass through to the owners of PTEs.
ORS 314.610(4). See OAR 150‑314‑0088 for more information.
Lines 2 and 7. Apportionable and nonapportionable
Note: If you’re one of the business entities required to use income (all companies except insurance companies).
modified apportionment factors or sourcing rules, com‑ “Apportionable income” is income arising from transac‑
plete Schedule OR‑AP following the specific statute and tions and activities in the regular course of the taxpayer’s
supporting rules. trade or business. It includes income from tangible and
intangible property related to the operation of the taxpay‑
Insurance sales factor (insurance companies only)
er’s trade or business. It includes any other income that is
Lines 19 through 21. Use total premiums written including apportionable under the constitution of the United States
Oregon premiums written. and not allocated under the laws of this state, and any
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income that would be allocable to this state under the con‑ • Nature and source for each nonapportionable item and
stitution of the United States, but is apportioned rather than the corresponding dollar amount,
allocated under the laws of this state. • Separate computation showing how you figured each item,
• Reasons the income, loss, expenses, or deductions are
Examples of apportionable income are: being allocated, and
• Sales of products or services; • Description of property with name and FEIN (if appli‑
cable), including any schedules and statements used for
• Rents, if property rental is a related business activity;
federal reporting purposes.
• Royalties, if the patent, processes, etc., were developed by
or used in the business operation; Line 3. Subtract: Gains from prior year installment sales
• Gain or loss on the disposal of business property; and included in line 1. Installment gains are required to be
• Interest income on trade receivables or installment con‑ apportioned to Oregon using the apportionment percent
from the year of the sale rather than the year payment is
tracts when it serves an operational function.
received (ORS 314.615).
“Nonapportionable income” means all income other than
Line 8. Add: Gains from prior year installment sales
apportionable income. Rents, royalties, gains or losses, and apportioned to Oregon. Multiply the installment gains
interest also can be nonapportionable income if they arise subtracted on line 3 by the apportionment percent from the
from investments not related to the regular course of the tax‑ year of the sale.
payer’s business. Nonapportionable income is allocated to a
Line 10. Net loss and net capital loss deduction. Do not
particular state based upon the source of the income. Gain or
use line 10 when computing Oregon‑source distributive
loss from the sale of a partnership interest may be allocable
income for nonresident owners of PTEs.
to Oregon [ORS 314.635(4)]. The amounts allocable to Oregon
must be added to Oregon’s apportioned income. See ORS Corporation Excise Tax (OR-20) filers only: If you’re
314.610 and the supporting administrative rules. claiming the Oregon Investment Advantage (OIA) and you
apportion your income, include the amount of exempt cer‑
For nonapportionable income (loss) you must include a tified facility income on line 10b (ORS 317.391). Include a
schedule that clearly states: schedule showing your computations.

OR-AP Worksheets (Oregon apportionment percentage)
These worksheets are for businesses having business activities both inside and outside of Oregon. Don’t use these if the
entity’s business activities are all within Oregon. These worksheets are for your computations only and shouldn’t be filed
with your return.

Standard apportionment worksheet
Apportionable income is apportioned to Oregon by multiplying the income by a multiplier equal to Oregon sales and other receipts
as determined by Schedule OR-AP, part 1, divided by total sales and other receipts from the federal return (ORS 314.650).
(a) Oregon (b) everywhere (c) = (a ÷ b) x 100
1. Total sales and other receipts (Schedule OR-AP, part 1, line 22) ........................ 1.
2. Oregon apportionment percentage (enter on Schedule OR-AP, part 1, line 23) (Round to four decimal places) ............ 2. %

Alternative apportionment worksheet (double-weighted sales factor formula) for utility or telecommunications
taxpayers only.
Taxpayers primarily engaged in utilities or telecommunications may elect to apportion trade or business income using the
double-weighted sales factor [ORS 314.650 (1999 edition)].
Check the box on the front of your return if you’re using this alternative apportionment worksheet (Form OR-20, question L;
Form OR-20-INC, question K; Form OR-20-S, question I). All others use the standard apportionment worksheet above.
(a) Oregon (b) everywhere (c) = (a ÷ b) x 100
1. Total owned and rented property (Schedule OR-AP, part 1, line 9) .................... 1. %
2. Total wages and salaries (Schedule OR-AP, part 1, line 12) ............................... 2. %
3. Total sales and other receipts (Schedule OR-AP, part 1, line 22) ........................ 3. %
4. Total sales and other receipts (same as line 3 above)......................................... 4. %
5. Total percent (add lines 1–4, column c above) ..................................................................................................................... 5. %
6. Number of factors with a positive number in column b ....................................................................................................... 6.
7. Alternative apportionment percentage (divide line 5 by line 6; enter on Schedule OR-AP, part 1, line 23) ..................... 7. %

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Line 11. Total loss. Enter the total of line 10a plus line 10b.
                                                                  Do you have  questions or need help?
Line 12. Carry this amount to the appropriate line on your 
tax return: Form OR‑20, line 9; Form OR‑20‑INC, line 7;             www.oregon.gov/dor
Form OR‑20‑INS, line 14; or Form OR‑20‑S, line 7.                 503‑378‑4988 or 800‑356‑4222
                                                                  questions.dor @ dor.oregon.gov
For nonresident owners of PTEs, this line results in Ore‑
gon‑source distributive income. Report each nonresident           Contact us for ADA accommodations or assistance in other 
owner’s and corporate owner’s share on their information          languages.
return,  along  with  the  Oregon‑source  portion  of  (1)  any 
guaranteed payments (for partnerships) and (2) the taxable 
portion of distributions.

150-102-171-1 (Rev. 10-06-23)                                   4                               2023 Schedule OR-AP Instructions

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