(1) A taxpayer’s method of accounting for commercial activity, cost inputs and labor costs for a tax year shall be the same as the taxpayer’s method of accounting for federal income tax purposes for the taxpayer’s federal tax year that includes the tax year. If a taxpayer’s method of accounting for federal income tax purposes changes, the taxpayer’s method of accounting for commercial activity under ORS § 317A.100 to 317A.158 shall be changed accordingly.

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(2) For a unitary group:

(a) If all members of the unitary group use the same annual accounting period for federal income tax purposes, the unitary group’s tax year is the annual accounting period used by all members for federal income tax purposes under section 441 of the Internal Revenue Code.

(b) If the unitary group includes members with different accounting periods and two or more members of the unitary group file a federal consolidated return, the unitary group’s tax year is the annual accounting period of the federal consolidated group under section 441 of the Internal Revenue Code.

(c) In all other instances, the unitary group’s tax year is the accounting period used by the unitary group’s designated reporting entity, unless otherwise required or permitted under rules adopted by the Department of Revenue.

(3) If a taxpayer changes the taxpayer’s tax year for federal income tax purposes under section 441 of the Internal Revenue Code, the taxpayer shall notify the department of the change in the form, time and manner prescribed by the department. [2019 c.122 § 59; 2021 c.572 § 5]