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IN THE OREGON TAX COURT REGULAR DIVISION Income Tax STANCORP FINANCIAL GROUP, INC., and SUBSIDIARIES, Plaintiffs, v. DEPARTMENT OF REVENUE, State of Oregon, Defendant. ) ) ) ) ) ) ) ) )

TC 5039 ORDER GRANTING PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT AND DENYING DEFENDANT'S CROSSMOTION FOR PARTIAL SUMMARY JUDGMENT

I. INTRODUCTION This is the second case that has recently been presented to the court involving the interplay of the statutory rules in Oregon regarding taxation of corporations filing federal consolidated income tax returns that include an insurance company. See, Costco Wholesale Corp. v. Dept. of Rev., __ OTR __ (July 16, 2012.) II. FACTS These two cases have some things in common and some important differences. In common, both involve filings in Oregon of a consolidated Oregon corporation income or excise tax return. See ORS 317.705 to ORS 317.725. Also in common, both involve families of corporations that are, or have been stipulated for decision to be, unitary in nature. However, the cases are different in that in Costco the federal consolidated return member in question (1) had no connection with Oregon, and (2) did not and was not required to file an income tax return in
ORDER GRANTING PLAINTIFFS MOTION FOR SUMMARY JUDGMENT AND DENYING DEFENDANTS CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT TC 5039

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Oregon. In this case, however, the members in question do have an obligation to file an Oregon return. In this case two members of the corporate family that includes Plaintiffs (taxpayer) are of particular interest. One is Standard Insurance Company (SIC), an insurance company. The other is taxpayer Stancorp Financial Group (SFG), a corporation that is not an insurance company. SIC is a subsidiary of SFG.1 In the years in question here, 2002 and 2003, SIC paid dividends to SFG in the total amount of $115,000,000. (Stip Facts at

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Oregon Law