Chevron U.S.A., Inc. v. Dept. of Rev.

ORDER GRANTING DEFENDANT’S MOTION FOR
PARTIAL SUMMARY JUDGMENT AND DENYING
PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT
TC 5461 	Page 1 of 23
IN THE OREGON TAX COURT
REGULAR DIVISION
Corporation Excise Tax
CHEVRON U.S.A., INC.,
Plaintiff,
v.
DEPARTMENT OF REVENUE,
State of Oregon,
Defendant.
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TC 5461
ORDER GRANTING DEFENDANT’S
MOTION FOR PARTIAL SUMMARY
JUDGMENT AND DENYING
PLAINTIFF’S MOTION FOR
SUMMARY JUDGMENT
I. 	INTRODUCTION AND CONCLUSIONS
The parties cross-move for summary judgment on whether Plaintiff properly included
gross receipts from “hedging” transactions such as the sale and exchange of futures, options, and
swap contracts (“Hedging Receipts”) in its sales factor when determining Oregon’s
apportionable share of its income for the tax and calendar years 2011, 2012, and 2013 (the
“Years at Issue”).1 Although the hedging transactions are related to contracts for the sale,
1 Plaintiff moves for summary judgment solely on its first claim for relief: for abatement of the
assessments on the merits of Plaintiff’s apportionment theory, and for refund of the tax it was required to pay when
filing its complaint in this division. (See Ptf’s Cross-Mot Summ J at 1; Complaint at 6-8.). Plaintiff’s complaint
also makes a second claim: for abatement of substantial underpayment penalties imposed pursuant to ORS 314.402.
The second claim asserts various theories of relief from penalties for the court to consider even if the court were to
uphold the assessment. (See Complaint at 8-9.) Because the penalties are measured as a percentage that is tied to
the amount of the alleged understatement of income or tax, a ruling in Plaintiff’s favor on Plaintiff’s first claim
would dispose of the case. See ORS 314.402(1). Therefore, Plaintiff’s motion is properly styled as a motion for
summary judgment. Defendant also styles its motion as a motion for summary judgment, but Defendant argues only
the merits of Defendant’s apportionment theory, nowhere mentioning penalties or Plaintiff’s second claim. (See
Def’s Mot Summ J at 1.) Because the court ultimately rules in favor of Defendant on Plaintiff’s first claim, the
penalty claim is left unaddressed and must await further proceedings absent resolution by the parties. For this
reason, the court will treat Defendant’s motion as one for partial summary judgment.
Unless otherwise noted, the court’s references to the Oregon Revised Statutes (ORS) are to the 2009
edition. Although the 2011 edition of the ORS is applicable to the 2012 and 2013 tax years. the relevant statutes are
the same as in the 2009 edition.

ORDER GRANTING DEFENDANT’S MOTION FOR
PARTIAL SUMMARY JUDGMENT AND DENYING
PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT
TC 5461 	Page 2 of 23
purchase, and physical delivery of oil and gas commodities, Plaintiff acknowledges that
“minimal to no oil or gas commodities would have physically transferred in the [hedging
transactions].” (Def’s Decl of Paul, Ex I at 1 (Plaintiff’s Sept. 12, 2022, discovery response to
Defendant).)
To be included in the sales factor, the Hedging Receipts must either be “[s]ales of
tangible personal property” under ORS 314.665(2) or, if they are from intangible property, be
“derived from the taxpayer’s primary business activity” under the frequently litigated
“reinclusion” clause (the court’s term) of ORS 314.665(6)(a) (emphasis added):
“(6) For purposes of this section, “sales”:
“(a) Excludes gross receipts arising from the sale, exchange, redemption or holding of
intangible assets, including but not limited to securities, unless those receipts are derived
from the taxpayer’s primary business activity.”
See, e.g., Tektronix, Inc. v. Dept. of Rev., 354 Or 531, 316 P3d 276 (2013); Oracle Corp. and
Subsidiaries II v. Dept. of Rev, 24 OTR 359 (2021) (Oracle II); Microsoft Corporation v. Dept.
of Rev.,___OTR ___(Apr 29, 2025) (slip op at 18) (appeal pending). Plaintiff argues in the
alternative that the Hedging Receipts are (1) sales of tangible personal property, or (2) sales of
intangible property that are derived from Plaintiff’s primary business activity.
Plaintiff’s first theory is that Oregon is bound, by its incorporation of federal case law in
ORS 317.013(1) and ORS 317.018, to apportion the Hedging Receipts as sales of tangible
personal property because the Corn Products federal income tax doctrine classifies them as a
surrogate for sales of inventory for capital gains purposes. See Corn Products Refining Co. v.
Commissioner, 350 US 46, 76 S Ct 20, 100 L Ed 29 (1955) (classifying hedging contracts not as
“capital” assets, but as ordinary assets like the underlying grain commodities to which the
contracts relate); Arkansas Best Corp. v. Commissioner, 485 US 212, 221, 108 S Ct 971, 99 L Ed

ORDER GRANTING DEFENDANT’S MOTION FOR
PARTIAL SUMMARY JUDGMENT AND DENYING
PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT
TC 5461 	Page 3 of 23
2d 183 (1988) (clarifying that the futures contracts in Corn Products were “ordinary” assets
because they fit within a statutory “inventory” exception to the broad definition of “capital”
assets). The court rejects this position because ORS 317.013 and ORS 317.018 incorporate
federal statutes and court decisions only to the extent that they pertain or relate to the
determination or measurement of taxable income. Corn Products is not binding in this case,
because Plaintiff’s federal taxable income is not in dispute, and because the capital gains rules do
not affect the measurement of gross receipts, which is the only remaining way they could affect
Plaintiff’s Oregon taxable income.
Nor is Corn Products persuasive authority by way of analogy. Existing Oregon case law
that is squarely on point clearly classifies the Hedging Receipts as sales of intangible property.
Powerex Corp. v. Dept. of Rev., 357 Or 40, 42-43, 346 P3d 476 (2015). Nothing in the reasoning
of Corn Products persuades this court to depart from that classification:
• 	Corn Products has to do with legislative intent in an entirely different set of statutes.
The Court’s holding is animated by a concern to avoid a “loophole” that could allow
taxpayers to manipulate Congress’s distinction between capital and ordinary assets
under the federal capital gains rules. This court sees no similar loophole in Oregon’s
distinction between tangible and intangible property under UDITPA.2
• 	To the extent that the Court has analogized to Corn Products in state tax cases, the
issue has been the definition of apportionable business income, which is not in
dispute in this case.
The court thus rejects Plaintiff’s first theory and agrees with Defendant that the Hedging
Receipts are not sales of tangible personal property.
Under Plaintiff’s second theory, the Hedging Receipts, although from intangibles, must
be “reincluded” in the sales factor because they were derived from Plaintiff’s primary business
2 The Uniform Division of Income for State Tax Purposes Act, of which the sales factor statute is a part.
See ORS 314.605 (defining UDITPA); ORS 314.610(7) (defining “sales”); ORS 314.665(2) (referring to sales of
tangible personal property); ORS 314.665(4) (referring to other sales).

ORDER GRANTING DEFENDANT’S MOTION FOR
PARTIAL SUMMARY JUDGMENT AND DENYING
PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT
TC 5461 	Page 4 of 23
activity. The parties agree that Plaintiff’s primary business activity was “developing and
producing crude oil and natural gas, and refining and marketing those products for sale.” (Ptf’s
Reply at 6; Def’s Mot Summ J at 10.) Therefore, the only issue is whether the Hedging Receipts
are “derived from” that activity, within the meaning of ORS 314.665(6)(a).
Plaintiff has presented cogent and unrefuted evidence of strong business reasons for its
practice of entering into hedging transactions “side by side” with transactions for the sale and
purchase of tangible petroleum commodities. However, the “derived from” requirement, as
construed in Tektronix, directs the court to identify the source of the particular gross receipts at
issue, distinguishing other gross receipts--even those that might be traceable to the same contract
or to related contracts. In Tektronix, the source was plainly identified under federal tax
accounting provisions as the sale of goodwill; the source was not the sale of inventory, even
though it could be argued that historical sales of inventory over time had caused the goodwill to
come into existence. In this case, the source is the sale or exchange of separately accounted for
hedging contracts, notwithstanding Plaintiff’s argument that it would be unable to maintain its
business without engaging in both hedging transactions and transactions for the sale of the
tangible commodities.
For the foregoing reasons, the court concludes that the Hedging Receipts are not
includible in Plaintiff’s sales factor under either of Plaintiff’s theories. The court will grant
Defendant’s motion for partial summary judgment and deny Plaintiff’s motion for summary
judgment.
II. FACTS
The following facts are not disputed. During the Years at Issue:
(1) Plaintiff was engaged in a fully integrated petroleum business in Oregon and
elsewhere, with both “upstream” and “downstream” operations. (See Ptf’s Decl of

ORDER GRANTING DEFENDANT’S MOTION FOR
PARTIAL SUMMARY JUDGMENT AND DENYING
PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT
TC 5461 	Page 5 of 23
Berkeland at 2.) Plaintiff’s upstream operations consisted primarily of exploring for,
developing, and producing crude oil and natural gas, while its downstream operations
consisted primarily of refining crude oil into petroleum products (e.g. gasoline, diesel,
jet fuel, and biofuels), among other related services and activities. (Id.)
(2) Plaintiff’s supply and trading group (the S&T Group) was responsible for
profitably marketing and selling Plaintiff’s upstream and downstream commodities,
as well as purchasing crude oil feedstock and other product inputs for Plaintiff’s
refineries. (Id. at 3, ¶¶ 8, 9.) The S&T Group managed daily commodity sales and
purchases of approximately five million barrels of liquids and five billion cubic feet
of natural gas. (Id. at 3, ¶ 13.) Employees of the S&T Group included both “physical
traders” who entered into physical commodities sales and purchases and “financial
traders” who entered into Hedging Transactions on Plaintiff’s behalf. (Id. at 4, ¶¶ 15,
16.) Because crude oil types are varied and diverse, with some requiring less
processing during the refining process, the physical traders were responsible for
obtaining feedstock to match Plaintiff’s refining capabilities to maximize production
and to produce Plaintiff’s desired refined products. (See id. at 5, ¶ 19 (“Plaintiff’s
refineries were largely configured to manufacture and process heavy, sour crude, but
most of Chevron’s [crude oil produced in upstream operations] was light, sweet
crude”).) As a result, the S&T Group often purchased more than 85-90 percent of the
heavy, sour crude feedstock needed to keep downstream production operating at
capacity and sold 85-90 percent of its light, sweet equity production to third parties.
(Id. at 5, ¶¶ 21, 22.)
(3) The petroleum industry was susceptible to extremely volatile pricing risks. (Id. at
6, ¶ 25.) To obtain the “price of the day” for Plaintiff’s physical commodities within
Plaintiff’s defined and accepted level of pricing risk, and to avoid or eliminate any
distortion in the expected commodity pricing exposure, Plaintiff’s financial traders
entered into hedging transactions side by side with the physical commodities
purchases. (Id., ¶¶ 28, 30.) The S&T Group’s pricing role “supported its ability to
sell [Plaintiff’s] equity production at the highest possible value and purchase the
highest margin crude oil needed to supply refineries at the lowest possible cost.” (Id.
at 7, ¶ 32.) Financial traders determined the appropriate type, structure, and timing of
each hedging transaction based on information provided by the physical traders. (Id.
at 4, ¶16.) Hedging instruments used in Plaintiff’s risk management and trading
activities to produce the Hedging Receipts included forwards, futures, swaps, and
options. (See Def’s Decl of Paul, Ex D at 3.) The hedging transactions, including the
sale of futures contracts and other instruments, created additional receipts over and
above the amounts received from selling oil and gas. (See Def’s Mot Summ J at 4.)
However, “minimal to no oil or gas commodities would have physically transferred in
the [Hedging Transactions].” (Def’s Decl of Paul, Ex I at 1 (Sept. 12, 2022,
discovery response to Defendant).)
After excluding the Hedging Receipts from the sales factor on its original returns,
Plaintiff filed amended returns for the Years at Issue in which Plaintiff added the Hedging

ORDER GRANTING DEFENDANT’S MOTION FOR
PARTIAL SUMMARY JUDGMENT AND DENYING
PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT
TC 5461 	Page 6 of 23
Receipts to the denominator of the sales factor, thus reducing the percentage of Plaintiff’s overall
business income that was apportioned to Oregon. (See Ptf’s Cross-Mot Summ J at 1; Ptf’s
Response at 14.) Defendant issued refunds to Plaintiff based on the amended returns but later
rejected Plaintiff’s position and issued notices of assessment for each of the Years at Issue. (See
Def’s Decl of Paul, Ex H at 1-6 (notices of assessment).) Plaintiff appealed to the Magistrate
Division, which denied relief. In accordance with ORS 305.419(1), Plaintiff then paid the tax
assessed, and all penalties and interest due, before filing its complaint in this division. (See
Complaint at 1, ¶ 2; Answer at 1.) Plaintiff’s appeal in this division is de novo.
ORS 305.425(1).
The table below summarizes the total Hedging Receipts Plaintiff seeks to include in the
sales factor denominator, the resulting reduction in the apportionment factor if the receipts are
included, and the total amount of refund Plaintiff seeks for each of the Years at Issue.
Year at
Issue
Hedging Receipts Sought To
Be Included in Sales Factor3
Resulting Change to
Apportionment Percentage4 	Refund Sought5
2011 	$182,790,040,415 	0.7154% to 0.4126% 	$4,616,101
2012 	$158,953,849,297 	0.668% to 0.4028% 	$5,768,163
2013 	$182,035,345,449 	0.6386% to 0.3453% 	$4,368,722
III. 	ISSUE
Are Plaintiff’s Hedging Receipts includible in its Oregon sales factor for the Years at
Issue?
3 (See Compl at 2-3, ¶¶ 10-12; Answer at 1, ¶ 1.)
4 (See Def’s Mot Part Summ J at 4.)
5 (See Compl at 2-3, ¶¶ 10-12; Answer at 1, ¶ 1.)

ORDER GRANTING DEFENDANT’S MOTION FOR
PARTIAL SUMMARY JUDGMENT AND DENYING
PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT
TC 5461 	Page 7 of 23
IV. ANALYSIS
A. 	Legal Background
The starting point in determining Oregon corporation excise tax is the corporation’s
“taxable income or loss” as determined under federal income tax law. ORS 317.010(10). The
next step is to apply Oregon-specific additions, subtractions, and other modifications prescribed
in ORS chapter 317. See id. As one of the last steps, a corporation engaged in business in
multiple states must apply UDITPA. See id. The taxpayer first “allocates” specific items of
“nonbusiness” income or loss to Oregon, then “apportions” a percentage of its remaining
“business” income or loss to Oregon. See ORS 317.010(10)(a) to (c). The apportionment
percentage generally is a fraction, of which the numerator is sales “in this state” and the
denominator is total sales everywhere. ORS 314.650; ORS 314.665(1).
The so-called “sourcing” provisions for determining whether a sale is “in this state” fall
into two categories. Under ORS 314.665(2), sales “of tangible personal property” are added to
the denominator of the sales factor, and they also are added to the numerator if Oregon is the
ultimate destination of the goods. See Powerex Corp. v. Dept. of Rev., 357 Or 40, 49-51, 346
P3d 476 (2015). Under ORS 314.665(4), sales of intangible property, or of services, are added
to the denominator, and they also are added to the numerator if Oregon is the state where the
plurality of relevant income-producing activities occurs. ORS 314.665(6) excludes certain gross
receipts from the definition of “sales,” and thus from both the numerator and the denominator.
One of those exclusions is at issue here: the exclusion for gross receipts arising from the sale of
intangible property, “unless those receipts are derived from the taxpayer’s primary business
activity.” ORS 314.665(6)(a).6
6 The parties agree that the Hedging Receipts are business income that is not allocated under ORS 314.615

ORDER GRANTING DEFENDANT’S MOTION FOR
PARTIAL SUMMARY JUDGMENT AND DENYING
PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT
TC 5461 	Page 8 of 23
After allocation and apportionment, and after applying any net operating loss carryovers,
the resulting “Oregon taxable income” is multiplied by Oregon’s corporate tax rate.
ORS 317.010(8); ORS 317.070 (imposing tax on “Oregon taxable income”).7
B. 	Plaintiff’s First Theory: Plaintiff’s Hedging Receipts Are Sales of Tangible Personal
Property.
Plaintiff argues that the federal Corn Products doctrine, which requires the Hedging
Receipts to be treated as “ordinary” income like receipts from selling the commodity itself, also
requires the Hedging Receipts to be treated as “sales of tangible personal property” for Oregon
apportionment purposes.8 ORS 314.665(2). The court starts by examining Plaintiff’s argument
that Oregon has adopted the Corn Products doctrine as binding authority under ORS 317.013
and ORS 317.108. (See, e.g., Ptf’s Cross-Mot Summ J at 17 (“In sum, the federal treatment of
physical commodities hedging transactions discussed above must be applied for Oregon
apportionment purposes due to Oregon’s adoption by reference of this federal law.”).) After
concluding that Corn Products is not binding as to the issue at hand, the court applies Oregon’s
cases governing the sales factor, concluding that the Hedging Receipts are sales of intangible
/ / /
to 314.645, and neither party has asserted that the Hedging Receipts are from services.
7 Oregon generally does not set different tax rates for ordinary income or capital gain, except for certain
sales of farm assets or interests in a farm entity. See ORS 317.070 (“Every * * * corporation * * * shall * * * pay
* * * an excise tax according to or measured by its Oregon taxable income, * * * at the rate provided in
ORS 317.061.”); ORS 317.063 (imposing special rate of five percent on net long-term capital gain from certain
farming assets).
8 Plaintiff also argues that a law change several years after the Years at Issue shows that “such hedging
receipts were generally includible as ‘sales’ during the years at issue, or else the law change would not have been
required.” (Ptf’s Cross-Mot Summ J at 10 (citing 2017 Or Laws ch 622, § 1, which explicitly excluded hedging
transaction receipts from the definition of “sales” in ORS 314.610(7)). The court rejects this argument. See
DeFazio v. WPPSS, 296 Or 550, 561, 679 P2d 1316 (1984) (“The views legislators have of existing law may shed
light on a new enactment, but it is of no weight in interpreting a law enacted by their predecessors.”); see also
Tektronix, Inc. v. Dept. of Rev., 354 Or 531, 546, 316 P3d 276 (2013) (later legislative testimony “irrelevant” to
interpretation of previously enacted law).

ORDER GRANTING DEFENDANT’S MOTION FOR
PARTIAL SUMMARY JUDGMENT AND DENYING
PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT
TC 5461 	Page 9 of 23
property, not tangible personal property. Finally, the court concludes that Corn Products is not
persuasive authority meriting a departure from the result under Oregon’s case law.
1. 	Is Corn Products binding authority that the Hedging Receipts are treated as sales of
tangible personal property for purposes of the sales factor?
Plaintiff asserts that Corn Products controls this case as a “‘judicial interpretation[ ] of
the federal income tax law.’” (Ptf’s Cross-Mot at 10 (“The Legislature directed that “[i]nsofar as
is practicable in the administration of this chapter, the Department of Revenue shall apply and
follow the administrative and judicial interpretations of the federal income tax law.”) (quoting
ORS 317.013(2)).9) From there, Plaintiff reasons that, because federal law requires that
“hedging transactions entered into to manage pricing risks * * * follow the same tax treatment as
the underlying commodity * * * [Plaintiff’s] gross receipts from physical commodities hedging
transactions must be apportioned in the same manner as the underlying physical commodities
themselves (i.e., as tangible personal property pursuant to ORS 314.665(2)).” (Id. at 10-12.)
It is true that Oregon conforms much of its income tax law to federal income tax law,
including by adopting federal income tax case law under subsection (2) of ORS 317.013. See
generally Dept. of Rev. v. Wakefield, 25 OTR 1, 37-44 (2022) (discussing incorporation of
federal case law for personal income tax purposes under ORS chapter 316). However, the
9 ORS 317.013 provides, in relevant part:
“(1) Those portions of the Internal Revenue Code, and any other laws of the United States pertaining to the
determination of taxable income of corporate Plaintiffs, are adopted by reference as a part of this chapter.
Those portions of the Internal Revenue Code and other laws of the United States have full force and effect
under this chapter unless modified by other provisions of this chapter.
“(2) Insofar as is practicable in the administration of this chapter, the Department of Revenue shall apply
and follow the administrative and judicial interpretations of the federal income tax law. When a provision
of the federal income tax law is the subject of conflicting opinions by two or more federal courts, the
department shall follow the rule observed by the United States Commissioner of Internal Revenue until the
conflict is resolved. Nothing contained in this section limits the right or duty of the department to audit the
return of any taxpayer or to determine any fact relating to the tax liability of any taxpayer.”

ORDER GRANTING DEFENDANT’S MOTION FOR
PARTIAL SUMMARY JUDGMENT AND DENYING
PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT
TC 5461 	Page 10 of 23
Oregon laws that achieve that conformity have limits. A major limit is found in the subsection of
ORS 317.013 immediately preceding the subsection cited by Plaintiff: ORS 317.013(1)
incorporates only those portions of the Internal Revenue Code and other federal laws “pertaining
to the determination of taxable income” of corporate taxpayers. The legislature has expressed
this limit clearly in additional provisions: ORS 317.018(1) (emphasis added) declares the
legislature’s intention to “make the Oregon corporate excise tax law, insofar as it relates to the
measurement of taxable income, identical to the provisions of the federal Internal Revenue Code
* * *.” Moreover, the legislature expressly did not intend “to adopt federal Internal Revenue
Code provisions dealing with the computation of tax, tax credits or any other provisions designed
to mitigate the amount of tax due.” ORS 317.018(2). Plaintiff fails to explain why the
legislature would incorporate only a subset of federal income tax statutes--those provisions
pertaining to the determination of taxable income--into chapter 317 through subsection (1) of
ORS 317.013, yet in subsection (2) require federal case law on other federal income tax topics to
be treated as controlling authority by Defendant when administering chapter 317.10 Taking this
statutory context into account, the court reads the first sentence of subsection (2) as a direction to
follow the judicial interpretations of the federal income tax law to the extent incorporated by
reference through subsection (1). With this limit in mind, the court turns to the issue in Corn
Products.
At issue in Corn Products was whether gains and losses from the taxpayer’s hedging
transactions in corn commodity futures were to be treated as arising from the sale of “capital”
10 Additional statutory context supports the court’s conclusion. The legislature added the limitation in
subsection (1) of ORS 317.013 as part of the same bill in which it added subsection (2). Or Laws 1985, ch 802, §
32. See LandWatch Lane County v. Lane County, 330 Or App 468, 472, 544 P3d 428, rev den, 372 Or 290 (2024)
(“Statutory context includes other parts of the same statute, other relevant statutes, and other parts of the same
bill.”).

ORDER GRANTING DEFENDANT’S MOTION FOR
PARTIAL SUMMARY JUDGMENT AND DENYING
PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT
TC 5461 	Page 11 of 23
assets and thus subject to a complex set of special federal tax statutes and regulations commonly
known as the “capital gains” rules. Those rules generally limit a taxpayer’s right to deduct
“capital” losses when computing taxable income; the rules also at times have provided for
reduced rates of tax on “capital gains.”11 The taxpayer’s returns for the years at issue (1940 and
1942) reported the hedging gains and losses as “ordinary income” and “ordinary losses” not
subject to the capital gains rules, but in the course of defending an audit by the Internal Revenue
Service, the taxpayer sought to recharacterize the futures contracts as capital assets, which in turn
would have enabled the taxpayer to take advantage of provisions known as the “wash sale” rules,
thereby reducing the assessment. See Corn Products Refining Co. v. Commissioner, 16 TC 395,
398-99 (1951), aff’d 215 F2d 513 (2d Cir 1954), aff’d 350 US 46, 76 S Ct 20, 100 L Ed 29
(1955). The United States Supreme Court rejected the taxpayer’s proffered recharacterization,
concluding that the hedging transactions gave rise to ordinary income and losses, not capital
gains and losses. The Court reasoned that, in enacting the capital gains rules, “Congress
intended that profits and losses arising from the everyday operation of a business be considered
as ordinary income or loss rather than capital gain or loss,” while the capital gains rules were
intended to apply to “transactions * * * which are not the normal source of business income.”
350 US at 52. The Court found “nothing in this record to support the contention that Corn
Products’ futures activity was separate and apart from its manufacturing operation,” as the
/ / /
11 The content of the capital gains rules has changed numerous times since the first such provisions were
added to the Internal Revenue Code in 1921. Moreover, historically there have been substantial differences in the
treatment of corporate and non-corporate taxpayers. See generally Boris I. Bittker & Lawrence Lokken, 2 Federal
Taxation of Income, Estates and Gifts (Bittker & Lokken), ¶¶ 46.1 to 46.3 (3d ed, 2025). The main provisions cited
in Corn Products, sections 117 and 118 of the Internal Revenue Code of 1939, were recodified in 1954 and are
predecessors to sections 1221 and 1091 of the Internal Revenue Code of 1986, respectively.

ORDER GRANTING DEFENDANT’S MOTION FOR
PARTIAL SUMMARY JUDGMENT AND DENYING
PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT
TC 5461 	Page 12 of 23
hedging transactions were “vitally important to the company’s business as a form of insurance
against increases in the price of raw corn.” Id. at 50.12
Before considering the Supreme Court’s reasoning in greater depth, this court returns to
the initial question: does the test articulated in Corn Products for classifying futures contracts as
capital vs. ordinary assets “pertain to the determination of taxable income of corporate
taxpayers,” as required under ORS 317.013(1)? The court concludes that the answer depends on
the purpose for with the classification is invoked. For example, classification of a loss as
“capital” may limit the extent to which the taxpayer may claim a deduction for the loss. See IRC
§ 1211(a) (“In the case of a corporation, losses from sales or exchanges of capital assets shall be
allowed only to the extent of gains from such sales or exchanges.”). Because taxable income is a
net amount, defined as gross income less allowable deductions, the loss limitation provisions can
affect the measure of taxable income. See IRC § 63 (“‘taxable income’ means ‘gross income
minus the deductions allowed by this chapter’”). However, classification of gain as “capital”
may cause a reduced rate of federal tax to apply; in that case the classification has no bearing on
taxable income because the appropriate federal tax rate is selected only after federal taxable
income has been determined. See IRC § 1(h) (specifying maximum capital gains tax rate for
12 Several decades later, in Arkansas Best Corp. v. Commissioner, the Court clarified its reasoning in Corn
Products, stating that the existence of a connection between the asset and the taxpayer’s everyday business
operations is not relevant to whether the asset is a capital asset but is relevant to whether the asset is “inventory,” a
statutory exception codified within the definition of “capital asset.” See 485 US 212, 221, 108 S Ct 971, 99 L Ed 2d
183 (1988) (“The close connection between the futures transactions and the taxpayer’s business in Corn Products
was crucial to whether the corn futures could be considered surrogates for the stored inventory of raw corn.”);
former IRC § 117(a)(a) (1940) (“The term ‘capital assets’ means property held by the taxpayer (whether or not
connected with his trade or business), but does not include stock in trade of the taxpayer or other property of a kind
which would properly be included in the inventory of the taxpayer * * * or property held by the taxpayer primarily
for sale to customers in the ordinary course of his trade or business * * *.”) (emphases added); IRC § 1221 (a)(1)
(same) The clarification in Arkansas Best is not relevant to this case, as both the definition of “capital asset” and the
exception for inventory determine whether the capital gains rules apply to a transaction, as opposed to the rules
governing ordinary income. For this reason, this court’s references to the Corn Products doctrine include the
modifications by later cases, including Arkansas Best.

ORDER GRANTING DEFENDANT’S MOTION FOR
PARTIAL SUMMARY JUDGMENT AND DENYING
PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT
TC 5461 	Page 13 of 23
individual taxpayers); IRC § 1201 (providing alternative tax on corporations with net capital
gains). The classification system articulated in Corn Products applies equally to both types of
provisions: if an asset is classified as a capital asset, then both the loss limitations and the tax
rate provisions apply. Accordingly, the court concludes that Corn Products is controlling
authority under Oregon law to the extent that it is used to classify assets as capital vs. ordinary
for the purpose of determining whether losses from the sale of those assets are deductible in
computing taxable income. Conversely, Corn Products is not controlling authority under
Oregon law to the extent that it is used to determine which rate of federal tax applies.
In this case, Plaintiff does not raise Corn Products for either of those purposes; Plaintiff
appears to have no dispute with Defendant about the computation of its federal taxable income,
much less its federal tax rate. Rather, Plaintiff invokes Corn Products for a purpose that
involves the computation of gross receipts, which, along with the computation of gross income,
is antecedent to, and unaffected by, the capital gains rules. As a leading treatise explains:
“Although governed by an elaborate web of statutory provisions, capital
gains and losses do not occupy a tax world of their own. The term ‘gross income’
includes both capital gains and ordinary income, so that provisions that refer to a
dollar amount of gross income (e.g., § 6012(a), relating to the filing of tax
returns) apply whether the income is ordinary or capital. Many other statutory,
administrative, and judicial rules apply equally to capital and ordinary
transactions in determining the amount of gain or loss, the time when gains and
losses are taken into account, the deductibility of losses, and the recognition of
gains and losses. For example, although the sale of a personal residence for less
than its cost produces capital loss, this is useless information because the loss, not
having occurred in the seller’s trade or business or in a transaction entered into for
profit, may not be deducted. Because the actual tax treatment of transactions
creating capital gains and losses always depends on provisions of more general
import, it is essential that they be viewed in this larger context.”
2 Bittker & Lokken at ¶ 46.1 (emphasis added) (footnotes omitted); see Oracle II, 24 OTR at 380
(Oregon Legislature, in adopting the term “gross receipts” for purposes of the sales factor,
intended that “gross receipts” “be defined consistently with the taxpayer’s method of accounting

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PARTIAL SUMMARY JUDGMENT AND DENYING
PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT
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for income tax purposes.”; see ORS 317.018(2) (Oregon corporation excise tax law applies
federal income tax accounting methods).13 Because the capital gains rules do not determine the
measure of gross receipts, the court concludes that the Corn Products doctrine is not binding
authority for the determination of whether the Hedging Receipts are “sales of tangible personal
property” for Oregon apportionment purposes.14
2. 	Is Corn Products persuasive authority?
The court next considers whether anything in the reasoning of Corn Products or its
progeny is persuasive authority that Plaintiff’s Hedging Receipts should be treated as sales of
tangible personal property for Oregon apportionment purposes. To begin, the court observes that
Oregon case law governing the sales factor clearly establishes that the Hedging Receipts are
sales of intangible property, not sales of tangible personal property. Plaintiff, therefore, bears the
burden of persuading the court to depart from that classification. The key case is Powerex,
where the Oregon Supreme Court extensively analyzed whether electricity was tangible or
intangible personal property, in order to determine which set of “sourcing” rules would
determine whether the taxpayer’s electricity sales were “in this state.” See ORS 314.665(2)
(sourcing of sales of tangible personal property); ORS 314.665(4) (sourcing of other sales).
13 Plaintiff’s opening brief cites New Mexico Timber Co. v. Comm’r, 84 TC 1290 (1985), where the court
held that the taxpayer’s “gross receipts,” for purposes of a provision specific to S corporations, consisted of the full
contract price of commodity futures contracts, not merely the net gain on contracts settled by offset. (Ptf’s Mot
Summ J at 16-17.) Neither party discusses this case further, and this court sees nothing in the United States Tax
Court’s reasoning that affects the analysis in this case.
14 Plaintiff also argues that this court is required to follow several federal cases “holding that the offsetting
of futures contracts (i.e. physical delivery did not occur) results in constructive delivery and must be treated for tax
purposes as a deemed sale of units of the commodity described in the contracts.” (Ptf’s Response at 5-6.) This court
concludes that those decisions are not controlling because, as in Corn Products and Arkansas Best, the issue was
application of the capital gains rules, not the treatment of gross receipts. See Covington v. Commissioner, 120 F2d
768 (5th Cir 1941) (rejecting taxpayer’s attempt to classify futures losses as ordinary on the grounds that all the
contracts were executory, never closed out), cert den 315 US 822 (1942); Hoover Co. v. Commissioner, 72 TC 206,
207 (1979); Vickers v. Commissioner, 80 TC 394, 395 (1983).

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PARTIAL SUMMARY JUDGMENT AND DENYING
PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT
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Rejecting this court’s reliance on the trial testimony of competing nuclear physicists about the
nature and behavior of subatomic particles, the Supreme Court articulated a test that focuses on
what makes the property useful and valuable to a taxpayer:
“[W]e conclude that tangible personal property is perceptible to the senses and
that its physical features make it useful. Conversely, intangible property lacks
‘intrinsic or marketable value.’ Thus, even though a bond--a common example of
intangible property--physically evidences a debt, the value of the bond does not
lie in the physical features of the bond but in the legal obligation that the bond
embodies.”
Powerex, 357 Or at 62; see also id. at 65 (legislative history of UDITPA shows that “physical
properties of tangible personal property were what made it useful while the physical properties of
intangible property had little or no relation to that property’s value or usefulness.”). The court
concluded that electricity is tangible personal property for purposes of the sales factor because
“the physical properties of electricity are what make it valuable to a purchaser * * *.” Id. at 66;
see also Tektronix, 354 Or at 543-44 (classification of goodwill as intangible not contested;
adopting legal dictionary definition of “intangible assets” as “‘property representative of a right
rather than a physical object.’”) (quoting West’s Tax Law Dictionary 570 (2013)).
Applying the Powerex test here, the undisputed record readily establishes that the Hedging
Receipts are sales of intangible property. Plaintiff’s stated purpose for buying and selling hedging
contracts was “[t]o create predictability within the volatile oil market, * * * to obtain the pricing
for Chevron’s physical commodities within its defined and accepted level of pricing risk,” and “to
avoid or eliminate any distortion in the expected commodity pricing exposure” by using the
hedging transactions “[t]o obtain the price of the day[.]” (See Ptf’s Decl of Berkeland at 6-7, ¶¶
28, 29, 31.) The value and usefulness of the contracts lay not in the physical properties of either
the paper or electronic media in which the hedging instruments were embodied, or in the
underlying physical commodities, but in the rights and obligations that the contracts represented:

ORDER GRANTING DEFENDANT’S MOTION FOR
PARTIAL SUMMARY JUDGMENT AND DENYING
PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT
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the right to buy or sell oil and gas commodities at a particular price. By contrast, the value and
usefulness of Plaintiff’s completed purchases and sales of tangible oil and gas commodities lay in
the physical properties of those commodities. (See id. at 5, ¶ 22 (purchases of oil and gas were
necessary “feedstock [that Plaintiff’s] refineries needed in order to keep Downstream operations
producing/flowing” and because the oil and gas could be refined into other saleable products).)
Powerex thus sets a high bar to persuade the court to treat the Hedging Receipts as sales of
tangible personal property. The court examines the Corn Products analysis in greater depth for
any principles that could be compatible with, or be found to supersede, the classification under
Powerex. In Corn Products, the Court was primarily concerned with effectuating Congress’s
intent by construing the definition of “capital asset” narrowly to avoid a “loophole.” 350 US at
53-54. The Court described the capital gains rules as a “preferential” regime by which Congress
intended to “relieve the taxpayer from excessive tax burdens on gain resulting from a conversion
of capital investments.” Id. at 52. As an “exception,” the capital gains rules were required to be
“narrowly applied” and the exclusions from capital gains treatment were to be “interpreted
broadly,” lest taxpayers engaging in hedging transactions be allowed to “transmute ordinary
income into capital gain at will.” Id. at 53-54. It is against this backdrop that the Court rejected
the taxpayer’s contention that its hedging transactions were the activities of a “capital investor,”
“separate and apart from its manufacturing operations.” Id. at 49-51.
This court sees no basis to apply the Corn Products Court’s concerns about potential
abuse to the wholly unrelated definition of “sales of tangible personal property” under UDITPA.
The court is aware of no indication that the Oregon Legislature, or the drafters of UDITPA,
viewed the definition of the sales factor as creating a “preferential” regime to reduce otherwise
excessive tax burdens. See, e.g., ORS 314.667 (2013) (“safety valve” statute allowing

ORDER GRANTING DEFENDANT’S MOTION FOR
PARTIAL SUMMARY JUDGMENT AND DENYING
PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT
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alternative apportionment methods if standard provisions “do not fairly represent the extent of
the taxpayer’s business activity in this state”) (former ORS 314.670). Although the sixty-year
history of UDITPA has revealed many gray areas and perceived inadequacies in the distinctions
among tangible personal property, intangible property, and services, this court cannot conclude
that the definitions of the terms generally tilt toward taxpayers and thus create opportunities for
“loopholes” requiring elevated judicial scrutiny. To the contrary, the overwhelming concern was
to create a system that is fair both to multistate businesses and to states. See, e.g., Twentieth
Century-Fox Film v. Dept. of Rev., 299 Or 220, 227, 700 P2d 1035 (1985) (“Two basic goals of
UDITPA * * * emerge: (1) fair apportionment of income among the taxing jurisdictions; and (2)
uniformity of application of the statutes.”); US Bancorp v. Dept. of Rev., 13 OTR 84, 90 (1994)
(“Oregon statutes appear intended to tax nondomiciliary businesses to the full extent permitted
by the constitution. The statutes, however, apply to both domiciliary and nondomiciliary
businesses. Consequently, the statutes and rules are like the proverbial two-edged sword which
cuts both ways. If a broadly worded state statute provides for apportionment of a taxpayer’s
income, it applies even though it results in less revenue for the state.”).
To be sure, the Corn Products classification has proved highly instructive as applied to
other state tax issues, primarily whether a particular stream of income must be allocated entirely
to one state as “nonbusiness income” or is subject to formulary apportionment as “business
income.” See, e.g., Allied-Signal, Inc. v. Dir., Div. of Tax’n, 504 US 768, 788, 112 S Ct 2251,
119 L Ed 2d 533 (1992) (citing Corn Products) (distinguishing between allocable income from a
“capital transaction that serves an investment function and one that serves an operational
function” and therefore results in apportionable business income); cf. Corn Products, 350 US at
52 (distinguishing capital “transactions in property which are not the normal source of business

ORDER GRANTING DEFENDANT’S MOTION FOR
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PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT
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income” from ordinary “profits and losses arising from the everyday operation of a business”).
As to the allocable/apportionable income issue, the analogy is clear and is regularly cited. See,
e.g., Fisher Broadcasting Co. v. Dept. of Rev., 22 OTR 69, 77 (2015) (“Assets referred to as
Corn Products assets [yielding ordinary income] are also examples of assets having an
operational rather than investment function”); Jerome R. Hellerstein, Walter Hellerstein, Andrew
D. Appleby, 2 State Taxation § 9.10[1][c] (3d ed, 2025) (“By analogy, dividends received on
stocks falling within the Corn Products doctrine may be regarded as business income that is
apportionable * * *.”); see also Container Corporation v. Franchise Tax Board, 463 US 159,
180 n 19, 103 S Ct 2933, 77 L Ed 2d 545 (1983) (analogizing to Corn Products test in
concluding that taxpayer’s transfers of capital to its subsidiaries were a “flow of value”
indicating the presence of a unitary business, because the transfers served an “operational
function” rather than an “investment function”).
Here, however, the analogy simply does not apply. Plaintiff does not contest that the
Hedging Receipts are business income, and Oregon law plainly states that apportionable business
income can arise from sales of either type of property. See ORS 314.610(1) (“‘Business income’
means income arising from transactions and activity in the regular course of the taxpayer’s trade
or business and includes income from tangible and intangible property if the acquisition, the
management, use or rental, and the disposition of the property constitute integral parts of the
taxpayer’s regular trade or business operations.”) (emphasis added). This court does not see a
basis to extrapolate from Corn Products a one-size-fits-all rule that hedging transactions always
must be classified in the same way as sales of the underlying commodity, regardless of the
purpose of the classification. (Ptf’s Mot Summ J at 17.) Nor is the purpose Plaintiff advances in
this case sufficiently similar to persuade the court to adopt it here.

ORDER GRANTING DEFENDANT’S MOTION FOR
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PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT
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3. 	Conclusion as to Plaintiff’s first theory
The Hedging Receipts are gross receipts from the sale of intangible property, because
Oregon case law squarely on point defines them as such, and because Corn Products is neither
binding nor persuasive authority for a different conclusion.
C. 	Plaintiff’s Second Theory: Reinclusion under ORS 314.665(6)(a).
Because the court has concluded that the Hedging Receipts are not sales of tangible
personal property, they initially are excluded from the sales factor under the first clause of ORS
314.665(6)(a), as “gross receipts arising from the sale, exchange, redemption or holding of
intangible assets.” However, Plaintiff argues as its second theory that the final clause of ORS
314.665(6)(a) “reincludes” the Hedging Receipts in the sales factor because “those receipts are
derived from [Plaintiff’s] primary business activity.”
The parties agree that Plaintiff’s primary business activity is “developing and producing
crude oil and natural gas, and refining and marketing those products for sale.” (Ptf’s Reply at 6;
Def’s Mot Summ J at 10.) The only issue, then, is whether “those receipts” are “derived from”
that primary business activity.
Plaintiff argues that the Hedging Receipts are derived from its primary business activity
because the hedging transactions are “inextricably linked” with Plaintiff’s sales and purchases of
physical commodities. (E.g., Ptf’s Cross-Mot Summ J at 1; Id. at 17; Ptf’s Resp Cross-Mot
Summ J at 7; Ptf’s Reply at 3.)15 Plaintiff relies on the following undisputed facts:
15 At times, Plaintiff also characterizes the hedging transactions as “integrally” tied to its sales of
commodities, but it appears that Plaintiff’s usage is synonymous with “inextricably linked.” (E.g., Ptf’s Mot Summ
J at 12-13.) The court does not infer that Plaintiff seeks to prove that the Hedging Receipts are “derived from” its
“primary business activity” under ORS 314.665(6)(a) merely because they are “business income” under
ORS 314.610(1) as discussed above. See ORS 314.610(1) (“Business income” means income arising from
transactions and activity in the regular course of the Plaintiff’s trade or business and includes income from tangible
and intangible property if the acquisition, the management, use or rental, and the disposition of the property
constitute integral parts of the Plaintiff’s regular trade or business operations) (emphasis added).

ORDER GRANTING DEFENDANT’S MOTION FOR
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PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT
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• 	Both the Upstream and Downstream operations of Plaintiff’s business required
prompt and constant selling of the physical commodities. Plaintiff’s primary
declaration compares the operations to a conveyor belt that requires goods to be
sold and moved off the end of the belt in order to avoid blockages and stoppages
at earlier points along the length of the belt. (Ptf’s Decl of Berkeland at 5-6.)
• 	Petroleum commodity prices are volatile, and Plaintiff “has a defined and
accepted level of pricing risk established by the company when making sales and
purchases of physical commodities due to the extremely volatile pricing risk of
the petroleum industry.” (Ptf’s Reply at 6-7.)
• 	“The physical commodities hedging transactions were required [in order] to
obtain pricing within [Plaintiff’s] established pricing risk for the sales and
purchases of the physical commodities.” (Id.)
• 	Plaintiff entered into “physical commodities sales and purchases side-by-side with
the hedges [as] one single process to meet Chevron’s defined and accepted level
of pricing risk” and to “eliminate any distortion in the expected commodity
pricing exposure.” (Ptf’s Decl of Berkeland at 6, ¶¶ 28-29.)
• 	“To obtain the price of the day [for risk management purposes], Plaintiff was
required to enter physical commodities hedging transactions as a pricing
mechanism for the sales and purchases of physical commodities. The hedging
transactions became inseparable from the physical sales and purchases; the two
cannot be separated.” (Id. at 7, ¶ 31.)
In essence, Plaintiff seeks to establish that because the hedging transactions are required under
Plaintiff’s policies, and are entered into simultaneously with physical commodities sales and
purchases, they are “derived from” those sales and purchases.
The court has previously considered the meaning of “derived from” for purposes of the
reinclusion provision in ORS 314.665(6)(a):
“[T]he court concludes that both the plain and technical legal meanings of ‘derived from’
direct the court to look to any ‘specified source’ in the statute and to look no further if the
statute identifies one. In [ORS 305.665(6)(a)], that source is the taxpayer’s ‘primary
business activity.”
Oracle II, 24 OTR at 389 (emphasis added); see also Microsoft (slip op at 18-27) (summarizing
and expanding on “derived from” analysis)). The phrase “derived from” thus requires the court

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PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT
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to identify the source of the Hedging Receipts and to determine whether that source is the
Plaintiff’s primary business activity.
When undertaking the same exercise in Tektronix, the Oregon Supreme Court readily
concluded that the source of the gross receipts at issue was the taxpayer’s sale of goodwill, not
the “sale of electronics equipment,” which constituted the taxpayer’s primary business activity.
354 Or at 547. The court’s task no doubt was simplified by federal and Oregon tax accounting
law, which required the taxpayer to identify and quantify on its federal income tax return the
gross receipts from the items it characterized as goodwill16--an amount that was not in dispute
even though the taxpayer also sold other assets as part of the same transaction.17 See ORS
317.018(2) (Oregon corporation excise tax law applies federal income tax accounting methods).
Thus, although a manufacturer’s goodwill upon sale of the assets of a business division arguably
could be described as a residual intangible asset originating from, or inextricable from, prior
successful sales of goods over time, the court looked to the standalone receipts for the intangibles
at issue, as reported on the taxpayer’s return.18
Similarly, in this case there is no basis to look beyond the hedging transactions to
Plaintiff’s sales of commodities, even though the undisputed evidence is that Plaintiff always
16 Federal income tax law requires this identification and quantification, preferably by agreement between
the buyer and seller, in order to substantiate the seller’s gain and the buyer’s allowable depreciation deductions. See
IRC § 1060 (requiring allocation among asset classes of consideration received upon sale of the assets of a
business); IRC § 197 (requiring acquirer of goodwill, “going concern value,” “workforce in place” and other listed
intangibles to amortize the purchase price of those assets over specified period).
17 The parties did disagree over whether all of the intangibles could properly be labeled as “goodwill,” as
opposed to other intangibles, but they did not disagree that the taxpayer had received $590 million from the sale of
intangibles, out of a total purchase price of $925 million. Tektronix, 354 Or at 533 & n 1.
18 Goodwill often is described as a residual amount. E.g., Tektronix, Inc. v. Dept. of Rev., 20 OTR 468, 504
(2012), (quoting Webster’s Third New Int’l Dictionary 979 (unabridged ed 2002) (defining goodwill as “‘[T]he
excess of the purchase price of a business over and above the value assigned to its net assets exclusive of
goodwill.’”), aff’d on other grounds 354 Or 531, 316 P3d 276 (2013).)

ORDER GRANTING DEFENDANT’S MOTION FOR
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undertakes both types of transaction together. Section 1221 of the Code requires taxpayers to
identify hedging transactions separately from their physical commodity transactions. See IRC
§1221(a)(7) (“capital asset” does not include “any hedging transaction which is clearly identified
as such before the close of the day on which it was acquired, originated, or entered into (or such
other time as the Secretary may by regulations prescribe)[.]”); IRC § 1221(b)(2)(A)(i) (defining
hedging transaction, as relevant here, as “any transaction entered into by the taxpayer in the
normal course of the taxpayer’s trade or business primarily * * * to manage risk of price changes
or currency fluctuations with respect to ordinary property which is held or to be held by the
taxpayer.”). Corn Products does not extinguish the separate existence of gross receipts from the
sale of intangibles, nor does it fuse them together with gross receipts from the sale of inventory
for all purposes; the Corn Products doctrine merely places both types of receipts into the same
classification for purposes of the capital gains rules.
Because Plaintiff’s Hedging Receipts are separately identified under the federal income
tax accounting provisions that apply to Plaintiff, the court concludes that they are not “derived
from” Plaintiff’s sales of tangible commodities, notwithstanding the strong business and practical
connections between the two types of receipts.
V. CONCLUSION
There is no genuine issue of material fact as to the subjects of the parties’ cross-motions.
The court will deny Plaintiff’s motion as a matter of law. As noted at the outset, the court treats
Defendant’s motion as one for partial summary judgment. The court directs the parties to confer
and to advise the court within 30 days as to the need for further proceedings to resolve Plaintiff’s
second claim, for abatement of penalties. Now, therefore,

ORDER GRANTING DEFENDANT’S MOTION FOR
PARTIAL SUMMARY JUDGMENT AND DENYING
PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT
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IT IS ORDERED that Defendant’s Motion for Summary Judgment is treated as a motion
for partial summary judgment and is granted to that extent.
IT IS FURTHER ORDERED that Plaintiff’s Cross-Motion for Summary Judgment is
denied.
Dated this 21st day of July, 2025.