Oregon’s Tax on Artistry in Films Upheld

The Oregon Supreme Court ruled today that the state can use the artistic contents and production costs of a film in determining corporate taxes paid by film companies that distribute movies in Oregon.

The decision came in a case involving 20th Century Fox, but it affects all film companies that distribute movies in the state and could involve radio and television companies.

Assistant Atty. Gen. Elizabeth Stockdale said there is no way to determine how much additional taxes the state will collect as a result of the ruling.

Depended on Footage

The court estimated that in the past the state has been basing corporate taxes owed it by film companies on prints and reels worth from $800 to $1,000 depending on footage.

The decision would allow the state to partially base its taxing of the companies on master negatives valued at between $5 million and $20 million.

The court said the negatives “reflect the embodiment of a story or theme, photography, editing, and acting, captured on film and capable of exhibition elsewhere, including Oregon.

“It would be inaccurate to describe (20th Century Fox) business activity as distributing reels of prints without reference to the negatives from which they are made,” the decision written by Justice Betty Roberts said.