The State of Oregon is currently in the process of borrowing about $11.4 million for pollution control projects, but in a somewhat unusual development, it had to amend its sales document for the IOUs with a disclosure of a pending tax dispute that could eventually have a significant impact on the state budget:

A case is pending in the Oregon Tax Court that challenges the State's departure from provisions in the Multistate Tax Compact ("MTC") when apportioning income attributable to corporations operating in more than one state. Under the MTC, the income of a multi-state corporation is apportioned to a state using an equally weighted three-factor formula. The formula compares in-state payroll, property and sales to the corporation's overall payroll, property and sales. Many states, including Oregon, have diverged from equally weighting each of the three elements to determine the amount of income in a particular state. Currently, the State uses only sales in Oregon and does not use the other two factors to apportion corporate income.... The taxpayer in Health Net v. Dept. of Revenue asserts that the MTC is a binding contractual arrangement that cannot be unilaterally changed by a participating state. Therefore, the taxpayer argues, the State must apportion multi-state corporate income based only on the formula in the MTC. The amount at issue in Health Net is approximately $350,000. If the taxpayer prevails, however, and a court determines that the State must use the MTC formula, other corporations may seek refunds based on the same theory and the State may collect less corporate income tax in the future. The State has insufficient data to accurately predict the amounts it could be required to refund or the overall impact on future revenues. Those amounts would depend on the circumstances of individual corporations that may, or may not, seek refunds and actions the Legislative Assembly may take in response to an adverse ruling. Such actions could include withdrawing from the MTC or adopting legislative changes to apportionment statutes. Preliminary estimates, however, indicate that potential maximum refund liability and reductions in corporate income tax revenues, without any legislative action, would exceed the materiality threshold stated above of $50 million. The State anticipates that the Oregon Tax Court's ruling will be appealed to the Oregon Supreme Court by the State or the taxpayer. Similar litigation is pending in the California appellate court.

Sounds like an interesting case -- at least, to us tax wonks. If the taxpayer in that case wins, there will likely be many winners and losers among the national and international companies who ply their trades in the Beaver State. But it sounds as though, on the whole, the state's treasury has got a lot to lose if the revenuers' current reading of the law goes down.