Abc Inc And Combined Affiliates V Dept Of Rev

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Key Facts

In this Oregon Tax Court case (TC 5431), ABC Inc. and Combined Affiliates (Plaintiffs) sued the Department of Revenue (Defendant) regarding Corporation Excise Tax. The central issue concerned the interpretation of ORS 305.222(1), which governs when enhanced interest rates apply to tax refunds ordered by the court. Plaintiffs argued that the enhanced 4% interest rate should begin 61 days after entry of this court's judgment, regardless of any appeal. Defendant contended that the enhanced rate should only begin 61 days after either this court's judgment or a Supreme Court judgment (if appealed). The court ruled in favor of Plaintiffs, holding that 'or' in the statute should be read disjunctively, meaning the enhanced interest rate begins 61 days after this court's judgment entry. The court denied Defendant's objections to Plaintiffs' proposed form of judgment.

Tax Type

Corporation Excise Tax

Issues

The court addressed whether the enhanced rate of interest under ORS 305.222(1) begins to apply 61 days after entry of the Oregon Tax Court's judgment granting a refund, or whether it should begin 61 days after a judgment of the Oregon Supreme Court granting a refund. The court concluded that the 60-day period commences the day after either court enters its order, meaning the enhanced interest rate starts 61 days after this court's order regardless of any appeal to the Supreme Court.

Holdings

The court denied Defendant's objections to Plaintiffs' form of judgment. The court determined that ORS 305.222(1) requires Defendant to pay the enhanced rate of interest beginning 61 days after entry of this court's judgment, regardless of whether that judgment is appealed to the Oregon Supreme Court. The court interpreted the word 'or' in the statute as disjunctive, meaning the 60-day period commences the day after either court enters its order.

Remedies

The Oregon Tax Court denied Defendant's objections to Plaintiffs' proposed form of judgment (TC 5431) and will enter judgment in the form submitted by Plaintiffs. The judgment establishes post-judgment interest at the rate under ORS 305.220 beginning on the date the judgment is entered, with the enhanced rate under ORS 305.222(1) applying 61 days after judgment entry regardless of any appeal to the Supreme Court.

Tax Issue Category

Other

Legal Principles

  • The court considered statutory context, including ORS 311.812(2)(d), which uses additional phrases like 'if the order constitutes a final determination of the matter' to narrow disjunctive conditions. The absence of such phrases in ORS 305.222(1) supports the plain, disjunctive reading. Legislative history from Senate Bill 100 (1987) was examined but found unhelpful due to conflicting testimony between witnesses Rick Peterson and Jim Brown regarding whether enhanced interest should apply before Supreme Court resolution.
  • The court applied statutory interpretation principles, emphasizing that the plain text of ORS 305.222(1) requires the word 'or' to be read as disjunctive, meaning the enhanced interest rate begins 61 days after either the Oregon Tax Court's judgment or the Oregon Supreme Court's judgment is entered, not after both. The court relied on State v. Gaines for the analytical framework of text, context, and legislative history, finding the disjunctive reading consistent with how 'or' is generally interpreted in Oregon law. Legislative history was given little weight due to conflicting testimony from knowledgeable witnesses with no indication of legislative agreement.

Precedent Name

  • State v. February, 361 Or 544, 550-551, 396 P3d 894 (2017)
  • McCabe v. State, 314 Or 605, 610-11 (1992)
  • Thomas Creek Lumber & Log Co. v. Dept. of Rev., 19 OTR 259, 264 (2007)
  • Lommasson v. School Dist. No. 1, 201 Or 71, 79, 261 P2d 860 (1954)
  • Lairmore v. Drake and Borough, 185 Or 239, 246, 202 P2d 473 (1949)
  • State v. Klein, 352 Or 302, 309, 283 P3d 350 (2012)
  • Con-Way, Inc. & Affiliates v. Dept. of Rev., 353 Or 616, 302 P3d 804 (2013)
  • State v. Gaines, 346 Or 160, 172, 206 P3d 1042 (2009)

Cited Statute

  • ORS 305.220 - Oregon Revised Statutes chapter 305, section 220
  • ORS 311.812(2)(d) - Oregon Revised Statutes chapter 311, section 812, subsection 2, paragraph d
  • ORS 305.222(1) - Oregon Revised Statutes chapter 305, section 222, subsection 1

Judge Name

Judge Robert T. Manicke

Passage Text

  • The court finds that the plain text of ORS 305.222(1) favors Plaintiffs' interpretation because it consistently interprets 'or' as disjunctive. The relevant text is the phrase 'refund of tax ordered by the Oregon Tax Court or the Oregon Supreme Court,' and Oregon case law requires 'or' to be read as disjunctive. The 60-day period commences the day after either court enters its order; normally, the Tax Court will do so first.
  • The court concludes that ORS 305.222(1) requires the Department of Revenue to pay the enhanced rate of interest beginning 61 days after entry of the Oregon Tax Court's judgment, regardless of whether that judgment is appealed to the Supreme Court. The court agrees with Plaintiffs' interpretation that the word 'or' in the statute should be read as disjunctive, meaning the 60-day period commences the day after either court enters its order.
  • The court examines legislative history of the 1987 act that adopted ORS 305.222, which ultimately proves unhelpful because two witnesses gave conflicting interpretations. Representative Schoon understood the bill to require payment of refund and imposition of enhanced interest prior to Supreme Court appeal resolution, while Jim Brown (Department of Revenue) offered a different interpretation. The court assigns the legislative history very little weight due to these conflicts.