71st OREGON LEGISLATIVE ASSEMBLY--2001 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 1238
(Including Amendments to Resolve Conflicts)
B-Engrossed
House Bill 2272
Ordered by the Senate June 11
Including House Amendments dated May 23 and Senate Amendments
dated June 11
Ordered printed by the Speaker pursuant to House Rule 12.00A (5).
Presession filed (at the request of Governor John A. Kitzhaber,
M.D., for Department of Revenue)
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure.
Conforms energy conservation facility tax credit eligibility
criteria to criteria used by Office of Energy in certifying
facility. Changes certain circumstances in which amended tax
return is considered original return. Conforms innocent spouse
relief from tax liability to federal law.
Modifies inflation indexing calculation used for certain income
tax purposes.
Changes income threshold at which personal income taxpayer must
file tax return.
Establishes connection date of December 31, 2000, for
{ + most + } changes to federal Internal Revenue Code that are
unrelated to definition of taxable income.
{ + Establishes connection date of June 8, 2001, for Oregon
earned income credit and adoption credit. + }
Takes effect on 91st day following adjournment sine die.
A BILL FOR AN ACT
Relating to taxation; creating new provisions; amending ORS
305.230, 305.265, 305.305, 305.494, 305.690, 307.130, 307.147,
310.140, 310.630, 310.800, 311.689, 314.011, 314.525, 315.004,
315.068, 315.262, 315.266, 315.274, 315.354, 316.012, 316.037,
316.078, 316.085, 316.087, 316.153, 316.157, 316.162, 316.182,
316.207, 316.298, 316.362, 316.369, 316.557, 316.563, 316.587,
316.588, 316.695, 317.010, 317.097, 317.151, 317.152, 317.154,
317.329, 469.205, 469.215 and 671.540; repealing ORS 316.371
and 316.743; prescribing an effective date; and providing for
revenue raising that requires approval by a three-fifths
majority.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 315.354 is amended to read:
315.354. (1) A credit is allowed against the taxes otherwise
due under ORS chapter 316 (or, if the taxpayer is a corporation,
under ORS chapter 317 or 318), based upon the certified cost of
the facility during the period for which that facility is
certified under ORS 469.185 to 469.225. The credit allowed in
each of the first two tax years in which the credit is claimed
shall be 10 percent of the certified cost of the facility, but
shall not exceed the tax liability of the taxpayer. The credit
allowed in each of the succeeding three years shall be five
percent of the certified cost, but shall not exceed the tax
liability of the taxpayer.
(2) { + In order for a tax credit to be allowable under this
section:
(a) + } The facility must be { + located + } in
Oregon { + ; + } { - , - } and { - : - }
{ - (a) Owned during the tax year by the taxpayer claiming
the credit; - }
{ + (b) The facility must have received final certification
from the administrator of the Office of Energy under ORS 469.185
to 469.225. + }
{ - (b) If the facility is a qualified transit pass contract,
the taxpayer must be the obligated purchaser of transit passes;
or - }
{ - (c) If the taxpayer is a corporation, financed by a
public utility described in ORS 469.205 (1)(c)(B), that has been
issued a certificate under ORS 469.215. - }
{ - (3) A credit under this section may be claimed by a
taxpayer for a facility only in those tax years which begin on
and after January 1, 1980. - }
{ - (4) - } { + (3) + } The maximum total credit or credits
allowed for a facility under this section to eligible taxpayers
shall not exceed 35 percent of the certified cost of such
facility.
{ - (5) - } { + (4) + } Upon any sale, termination of the
lease or contract, exchange or other disposition of the facility,
notice thereof shall be given to the administrator of the Office
of Energy who shall revoke the certificate covering the facility
as of the date of such disposition. The transferee, or upon
re-leasing of the facility, the lessor, may apply for a new
certificate under ORS 469.215, but the tax credit available to
that transferee shall be limited to the amount of credit not
claimed by the transferor or, for a lessor, the amount of credit
not claimed by the lessor under all previous leases.
{ - (6) - } { + (5) + } Any tax credit otherwise allowable
under this section which is not used by the taxpayer in a
particular year may be carried forward and offset against the
taxpayer's tax liability for the next succeeding tax year. Any
credit remaining unused in that next succeeding tax year may be
carried forward and used in the second succeeding tax year, and
likewise, any credit not used in that second succeeding tax year
may be carried forward and used in the third succeeding tax year,
and likewise, any credit not used in that third succeeding tax
year may be carried forward and used in the fourth succeeding tax
year, and likewise, any credit not used in that fourth succeeding
tax year may be carried forward and used in the fifth succeeding
tax year, and likewise, any credit not used in that fifth
succeeding tax year may be carried forward and used in the sixth
succeeding tax year, and likewise, any credit not used in that
sixth succeeding tax year may be carried forward and used in the
seventh succeeding tax year, and likewise, any credit not used in
that seventh succeeding tax year may be carried forward and used
in the eighth succeeding tax year, but may not be carried forward
for any tax year thereafter. Credits may be carried forward to
and used in a tax year beyond the years specified in subsection
(1) of this section only as provided in this subsection.
{ - (7) - } { + (6) + } The credit provided by this section
is not in lieu of any depreciation or amortization deduction for
the facility to which the taxpayer otherwise may be entitled for
purposes of ORS chapter 316, 317 or 318 for such year.
{ - (8) - } { + (7) + } The taxpayer's adjusted basis for
determining gain or loss shall not be decreased by any tax
credits allowed under this section.
{ - (9) - } { + (8) + } Except as provided in
{ - subsection (2)(c) of this section - } { + ORS 469.205
(1)(c) + }, a credit under the provisions of this section shall
not be allowed to any of the following:
(a) A public utility, as defined in ORS 757.005, that retails
electricity or natural gas to more than 100 customers or, if the
taxpayer is a corporation, a public utility, as defined in ORS
757.005, that retails electricity or natural gas to more than 100
customers unless the credit is for a facility for commercial or
residential property owned and managed by the utility;
(b) A people's utility district, as defined in ORS 261.010, a
municipal utility or a cooperative utility that retails
electricity or natural gas to more than 100 customers; or
(c) A subsidiary or an affiliated interest, as defined in ORS
757.015, of a public utility described in paragraph (a) of this
subsection, or if the taxpayer is a corporation, a subsidiary or
an affiliated interest, as defined in ORS 757.015, of a public
utility described in paragraph (a) of this subsection unless the
credit is for a facility for commercial or residential property
owned and managed by the subsidiary or affiliated interest.
SECTION 1a. { + If Senate Bill 521 becomes law, section 1 of
this 2001 Act (amending ORS 315.354) is repealed and ORS 315.354,
as amended by section 1, chapter ___, Oregon Laws 2001 (Enrolled
Senate Bill 521), is amended to read: + }
315.354. (1) A credit is allowed against the taxes otherwise
due under ORS chapter 316 (or, if the taxpayer is a corporation,
under ORS chapter 317 or 318), based upon the certified cost of
the facility during the period for which that facility is
certified under ORS 469.185 to 469.225. The credit is allowed as
follows:
(a) Except as provided in paragraph (b) of this subsection, the
credit allowed in each of the first two tax years in which the
credit is claimed shall be 10 percent of the certified cost of
the facility, but may not exceed the tax liability of the
taxpayer. The credit allowed in each of the succeeding three
years shall be five percent of the certified cost, but may not
exceed the tax liability of the taxpayer.
(b) If the application for certification under ORS 469.185 to
469.225 was filed with the Office of Energy on or after January
1, 2001, and the certified cost of the facility does not exceed
$20,000, the total amount of the credit allowable under
subsection
{ - (4) - } { + (3) + } of this section may be claimed in the
first tax year for which the credit may be claimed, but may not
exceed the tax liability of the taxpayer.
(2) { + In order for a tax credit to be allowable under this
section: + }
{ + (a) + } The facility must be { + located + } in
Oregon { + ;
(b) The facility must have received final certification from
the administrator of the Office of Energy under ORS 469.185 to
469.225; + } and
{ + (c) + } The taxpayer must be an eligible applicant under
ORS 469.205 (1)(c).
{ - (3) If the facility is a qualified transit pass contract,
the taxpayer must be the obligated purchaser of transit
passes. - }
{ - (4) - } { + (3) + } The maximum total credit or credits
allowed for a facility under this section to eligible taxpayers
may not exceed 35 percent of the certified cost of the facility.
{ - (5)(a) - } { + (4)(a) + } Upon any sale, termination of
the lease or contract, exchange or other disposition of the
facility, notice thereof shall be given to the administrator of
the Office of Energy who shall revoke the certificate covering
the facility as of the date of such disposition. The new owner,
or upon re-leasing of the facility, the new lessor, may apply for
a new certificate under ORS 469.215, but the tax credit available
to the new owner shall be limited to the amount of credit not
claimed by the former owner or, for a new lessor, the amount of
credit not claimed by the lessor under all previous leases.
(b) The Office of Energy may not revoke the certificate
covering a facility under paragraph (a) of this subsection if the
tax credit associated with the facility has been transferred to a
taxpayer who is an eligible applicant under ORS 469.205
(1)(c)(A).
{ - (6) - } { + (5) + } Any tax credit otherwise allowable
under this section that is not used by the taxpayer in a
particular year may be carried forward and offset against the
taxpayer's tax liability for the next succeeding tax year. Any
credit remaining unused in that next succeeding tax year may be
carried forward and used in the second succeeding tax year, and
likewise, any credit not used in that second succeeding tax year
may be carried forward and used in the third succeeding tax year,
and likewise, any credit not used in that third succeeding tax
year may be carried forward and used in the fourth succeeding tax
year, and likewise, any credit not used in that fourth succeeding
tax year may be carried forward and used in the fifth succeeding
tax year, and likewise, any credit not used in that fifth
succeeding tax year may be carried forward and used in the sixth
succeeding tax year, and likewise, any credit not used in that
sixth succeeding tax year may be carried forward and used in the
seventh succeeding tax year, and likewise, any credit not used in
that seventh succeeding tax year may be carried forward and used
in the eighth succeeding tax year, but may not be carried forward
for any tax year thereafter. Credits may be carried forward to
and used in a tax year beyond the years specified in subsection
(1) of this section only as provided in this subsection.
{ - (7) - } { + (6) + } The credit provided by this section
is not in lieu of any depreciation or amortization deduction for
the facility to which the taxpayer otherwise may be entitled for
purposes of ORS chapter 316, 317 or 318 for such year.
{ - (8) - } { + (7) + } The taxpayer's adjusted basis for
determining gain or loss may not be decreased by any tax credits
allowed under this section.
SECTION 1b. If Senate Bill 521 becomes law, ORS 469.215, as
amended by section 8, chapter ___, Oregon Laws 2001 (Enrolled
Senate Bill 521), is amended to read:
469.215. (1) No final certification shall be issued by the
administrator of the Office of Energy under this section unless
the facility was acquired, erected, constructed or installed
under a preliminary certificate of approval issued under ORS
469.210 and in accordance with the applicable provisions of ORS
469.185 to 469.225 and any applicable rules or standards adopted
by the administrator.
(2) Any person may apply to the Office of Energy for final
certification of a facility:
(a) If the office issued preliminary certification for the
facility under ORS 469.210; and
(b)(A) After completion of erection, construction, installation
or acquisition of the proposed facility or, if the facility is a
qualified transit pass contract, after entering into the contract
with a transportation provider; or
(B) After transfer of the facility, as provided in ORS 315.354
{ - (5) - } { + (4) + }.
(3) An application for final certification shall be made in
writing on a form prepared by the Office of Energy and shall
contain:
(a) A statement that the conditions of the preliminary
certification have been complied with;
(b) The actual cost of the facility certified to by a certified
public accountant who is not an employee of the applicant or, if
the actual cost of the facility is less than $50,000, copies of
receipts for purchase and installation of the facility;
(c) A statement that the facility is in operation or, if not in
operation, that the applicant has made every reasonable effort to
make the facility operable; and
(d) Any other information determined by the administrator to be
necessary prior to issuance of a final certificate, including
inspection of the facility by the Office of Energy.
(4) The administrator shall act on an application for
certification before the 60th day after the filing of the
application under this section. The administrator, after
consultation with the Public Utility Commission, may issue the
certificate together with such conditions as the administrator
determines are appropriate to promote the purposes of this
section and ORS 315.354, 469.185, 469.200, 469.205 and 469.878.
The action of the administrator shall include certification of
the actual cost of the facility. However, in no event shall the
administrator certify an amount for tax credit purposes which is
more than 10 percent in excess of the amount approved in the
preliminary certificate issued for the facility.
(5) If the administrator rejects an application for final
certification, or certifies a lesser actual cost of the facility
than was claimed in the application, the administrator shall send
to the applicant written notice of the action, together with a
statement of the findings and reasons therefor, by certified
mail, before the 60th day after the filing of the application.
Failure of the administrator to act constitutes rejection of the
application.
(6) Upon approval of an application for final certification of
a facility, the administrator shall certify the facility. Each
certificate shall bear a separate serial number for each device.
Where one or more devices constitute an operational unit, the
administrator may certify the operational unit under one
certificate.
SECTION 2. ORS 469.205 is amended to read:
469.205. (1) Prior to erection, construction, installation or
acquisition of a proposed facility any person may apply to the
Office of Energy for preliminary certification under ORS 469.210
if:
(a) The erection, construction, installation or acquisition of
the facility is to be commenced on or after October 3, 1979;
(b) The facility complies with the standards or rules adopted
by the administrator of the Office of Energy; and
(c) The applicant meets one of the following criteria:
(A) The applicant will be the owner or contract purchaser of
the facility at the time of erection, construction, installation
or acquisition of the proposed facility, and:
(i) The applicant is the owner, contract purchaser or lessee of
a trade or business that plans to utilize the facility in
connection with Oregon property;
(ii) The applicant is the owner, contract purchaser or lessee
of a trade or business that plans to lease the facility to a
person who will utilize the facility in connection with Oregon
property; or
(iii) The applicant is a person to whom a tax credit has been
transferred under ORS 469.208.
(B) { - Notwithstanding ORS 315.354 (9)(a) and (b), - } The
applicant is a public utility as defined in ORS 757.005 or a
subsidiary or an affiliated interest of a public utility as
defined in ORS 757.015, for purposes of financing rental housing
unit energy conservation measures as described in ORS 469.636 or
alternative fuel vehicles for commercial or industrial customers
as provided in ORS 469.878.
(C) { - Notwithstanding ORS 315.354 (9)(a) and (b), - } The
applicant is a public utility as defined in ORS 757.005 or a
subsidiary or an affiliated interest of a public utility as
defined in ORS 757.015, for purposes of financing alternative
fuel vehicles or associated facilities.
(D) { - Notwithstanding ORS 315.354 (9)(a) and (b), - } The
applicant is a public utility as defined in ORS 757.005 or a
subsidiary or an affiliated interest of a public utility as
defined in ORS 757.015, for purposes of financing transportation
facilities.
(2) An application for preliminary certification shall be made
in writing on a form prepared by the Office of Energy and shall
contain:
(a) A statement that the applicant or the lessee of the
applicant's facility:
(A) Intends to convert from a purchased energy source to a
renewable energy resource;
(B) Plans to acquire, construct or install a facility that will
use a renewable energy resource or solid waste instead of
electricity, petroleum or natural gas;
(C) Plans to use a renewable energy resource in the generation
of electricity for sale or to replace an existing or proposed use
of an existing source of electricity;
(D) Plans to acquire, construct or install a facility that
substantially reduces the consumption of purchased energy;
(E) Plans to acquire, construct or install equipment for
recycling as defined in ORS 469.185 (6);
(F) Plans to acquire an alternative fuel vehicle or to convert
an existing vehicle to an alternative fuel vehicle;
(G) Plans to acquire, construct or install a facility necessary
to operate alternative fuel vehicles;
(H) Plans to acquire transit passes for use by the applicant's
employees; or
(I) Plans to acquire, construct or install a transportation
facility.
(b) A detailed description of the proposed facility and its
operation and information showing that the facility will operate
as represented in the application.
(c) Information on the amount by which consumption of
electricity, petroleum or natural gas by the applicant or the
lessee of the applicant's facility will be reduced, and on the
amount of energy that will be produced for sale, as the result of
using the facility.
(d) The projected cost of the facility.
(e) If applicable, a copy of the proposed qualified transit
pass contract or transportation services contract.
(f) Any other information the administrator of Office of Energy
considers necessary to determine whether the proposed facility is
in accordance with the provisions of ORS 469.185 to 469.225, and
any applicable rules or standards adopted by the administrator.
(3) An application for preliminary certification shall be
accompanied by a fee established under ORS 469.217. The
administrator may refund the fee if the application for
certification is rejected.
(4) The administrator may allow an applicant to file the
preliminary application after the start of erection,
construction, installation or acquisition of the facility if the
administrator finds:
(a) Filing the application before the start of erection,
construction, installation or acquisition is inappropriate
because special circumstances render filing earlier unreasonable;
and
(b) The facility would otherwise qualify for tax credit
certification pursuant to ORS 469.185 to 469.225.
SECTION 3. { + The amendments to ORS 315.354, 469.205 and
469.215 by sections 1, 1a, 1b and 2 of this 2001 Act apply to tax
years beginning on or after January 1, 2001. + }
SECTION 4. ORS 316.587 is amended to read:
316.587. (1) Except as provided in subsection (5) of this
section, if an individual makes an underpayment of estimated tax,
interest shall accrue at the rate established under ORS 305.220
for each month, or fraction thereof, on the amount underpaid for
the period the estimated tax or any installment remains unpaid.
The penalty provisions contained in ORS chapter 314 for
underpayment of tax shall not apply to underpayments of estimated
tax under ORS 316.557 to 316.589.
(2) For purposes of subsection (1) of this section, the amount
of underpayment shall be the excess of the required installment
over the amount (if any) of the installment paid on or before the
due date for the installment.
(3) The period of underpayment shall run from the date the
installment was due to the earlier of the following dates:
(a) The 15th day of the fourth month following the close of the
taxable year; or
(b) With respect to any portion of the underpayment, the date
on which the portion is paid.
(4) For purposes of subsection (3)(b) of this section, a
payment of estimated tax shall be credited against unpaid
required installments in the order in which such installments are
required to be paid.
(5)(a) Interest accruing under subsection (1) of this section
shall not be imposed if the individual was a resident of this
state throughout the preceding taxable year and had no tax
liability for that year, and the preceding taxable year was a
taxable year of 12 months.
(b) Interest accruing under subsection (1) of this section
shall not be imposed with respect to any underpayment of
estimated tax to the extent that the Department of Revenue
determines that by reason of casualty, disaster or other unusual
circumstances the imposition of interest would be against equity
and good conscience.
(c) Interest accruing under subsection (1) of this section
shall not be imposed with respect to any underpayment of
estimated tax if the department determines that:
(A) In the tax year the estimated tax payment was required to
be made or in the tax year preceding such tax year, the taxpayer
(i) retired after having attained age 62 or (ii) became disabled;
and
(B) The underpayment was due to reasonable cause and not to
willful neglect.
(d) Interest accruing under subsection (1) of this section
shall not be imposed with respect to any underpayment of
estimated tax attributable to the pro rata share of a shareholder
of the income of an S corporation if:
(A) The income is taxable income for an initial year for which
S corporation status is elected for the corporation; and
(B) The shareholder is a nonresident or for the preceding
taxable year was a part-year resident for Oregon tax purposes.
(6) For purposes of this section, the estimated tax shall be
computed without any reduction for the amount of credit estimated
to be allowed to the individual for the taxable year under ORS
316.187. The amount of the credit allowed under ORS 316.187 for
the taxable year shall be considered a payment of estimated tax.
An equal part of the credit shall be considered paid on each
installment date for the taxable year, unless the taxpayer
establishes the date on which all amounts were actually withheld,
in which case the amount so withheld shall be considered payment
of estimated tax on the dates on which the amounts were actually
withheld.
(7) For purposes of subsections (5) and (8) of this section,
the term 'tax' means the tax imposed by this chapter minus any
credits against tax allowed for purposes of this chapter, other
than the credit against tax provided by ORS 316.187.
(8) For purposes of subsections (2) and (4) of this section,
the term 'required installment' means the amount of the
installment that would be due if the estimated tax were equal to
the lesser of:
(a) Ninety percent of the tax shown on the return for the
taxable year (or, if no return is filed, 90 percent of the tax
for such year);
(b) If the preceding taxable year was a taxable year of 12
months, the percentage of the tax shown on the return filed by
the individual for the preceding taxable year that is established
by the Department of Revenue by rule; or
(c) Ninety percent of the tax for the taxable year computed by
placing on an annualized basis the taxable income for the months
in the taxable year ending before the month in which the
installment is required to be paid.
(9) For purposes of subsection (8) of this section:
(a) If an amended return is filed on or before the return due
date (determined { - without - } { + with + } regard to
{ - extensions - } { + any extension of time granted to the
taxpayer + }), then the term ' return' means the amended return.
(b) If during initial processing of the return the department
adjusts the amount of tax due, then the term 'tax shown on the
return' means the tax as adjusted by the department. This
paragraph shall not apply if it is ultimately determined that the
adjustment was improper.
(c) The department shall consider the provisions of section
6654 of the Internal Revenue Code.
SECTION 5. ORS 316.588 is amended to read:
316.588. (1) Interest accruing under ORS 316.587 shall not be
imposed for any taxable year if the tax shown on the return for
the taxable year (or, if no return is filed, the tax), minus the
sum of any credits allowable for purposes of this chapter,
including the credit allowable under ORS 316.187, is less than
the amount established by rule adopted under ORS 316.563 (2).
(2) For purposes of { - subsection (1) of - } this section:
(a) If an amended return is filed on or before the return due
date (determined { - without - } { + with + } regard to
{ - extensions - } { + any extension of time granted to the
taxpayer + }), then the term ' return' means the amended return.
(b) If during initial processing of the return the Department
of Revenue adjusts the amount of tax due, then the term 'tax
shown on the return' means the tax as adjusted by the department.
This paragraph shall not apply if it is ultimately determined
that the adjustment was improper.
SECTION 6. { + The amendments to ORS 316.587 and 316.588 by
sections 4 and 5 of this 2001 Act apply to amended returns filed
on or after the effective date of this 2001 Act. + }
SECTION 7. ORS 316.369 is amended to read:
316.369. { - (1) - } If a joint return has been made under
this chapter for a { - taxable year and on the return there is
a substantial understatement of tax attributable to grossly
erroneous items of one spouse, upon compliance with subsection
(2) of this section, the other - } { + tax year, a + } spouse
shall be relieved of liability for tax, including interest,
penalties and other amounts, for the { - taxable - } { +
tax + } year { + : + } { - and to the extent that the liability
is attributable to the grossly erroneous items. - }
{ - (2) To qualify for relief from liability for tax under
subsection (1) of this section, the other spouse must
establish: - }
{ - (a) - } { + (1) + } If the Internal Revenue Service has
made a determination { + that relieved the spouse of liability
for federal taxes + } for the same tax year under Internal
Revenue Code provisions
{ - providing - } { + that provide + } for spouse relief from
liability { - , that the determination relieved the spouse from
liability for federal taxes - } ; or
{ - (b) - } { + (2) + }If the Internal Revenue Service has
not made { - such - } a determination { + that relieved the
spouse of liability for the tax year + }, { + but + } the spouse
{ - would be qualified to be relieved of liability for federal
taxes for the same taxable year under those - } { + qualifies
to be relieved of state tax liability under rules adopted by the
Department of Revenue. In adopting rules under this subsection,
the department shall consider the + } provisions of the Internal
Revenue Code and regulations issued thereunder that provide for
spouse relief from liability for federal taxes.
SECTION 8. { + The amendments to ORS 316.369 by section 7 of
this 2001 Act apply to claims for relief of tax liability made
under ORS 316.369 on or after July 23, 1998. + }
SECTION 9. { + ORS 316.371 is repealed. + }
SECTION 10. ORS 315.262 is amended to read:
315.262. (1) As used in this section:
(a) 'Child care' means care provided to a qualifying child of
the taxpayer for the purpose of allowing the taxpayer to be
gainfully employed, to seek employment or to attend school on a
full-time or part-time basis, except that the term does not
include care provided by:
(A) The child's parent or guardian, unless the care is provided
by the parent in a licensed or registered child care facility; or
(B) A child of the taxpayer who has not yet attained 19 years
of age at the close of the tax year.
(b) 'Child care expenses' means the costs associated with
providing child care to a qualifying child of a qualified
taxpayer.
(c) 'Earned income' has the meaning given that term in section
32 of the Internal Revenue Code.
(d) 'Qualified taxpayer' means a taxpayer:
(A) With at least $6,000 of earned income for the tax year;
(B) With federal adjusted gross income for the tax year that
does not exceed 250 percent of the federal poverty level; and
(C) Who does not have more than the maximum amount of
disqualified income under section 32(i) of the Internal Revenue
Code that is allowed to a taxpayer entitled to the earned income
tax credit for federal tax purposes.
(e) 'Qualifying child' means a child of the taxpayer who is
under 13 years of age, or who is a disabled child, as that term
is defined in ORS 316.099.
(2) A qualified taxpayer shall be allowed a credit against the
taxes otherwise due under ORS chapter 316 equal to the applicable
percentage of the qualified taxpayer's child care expenses
(rounded to the nearest $50).
(3) The applicable percentage to be used in calculating the
amount of the credit provided in this section shall be determined
in accordance with the following table:
_________________________________________________________________
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
Applicable Federal Adjusted
Percentage Gross Income as Percent
of Federal Poverty Level
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
40 200 or less
36 Greater than 200 and less than
or equal to 210
32 Greater than 210 and less than
or equal to 220
24 Greater than 220 and less than
or equal to 230
16 Greater than 230 and less than
or equal to 240
8 Greater than 240 and less than
or equal to 250
0 Greater than 250 percent
of federal poverty level
____________________________________________________________
END OF POSSIBLE IRREGULAR TABULAR TEXT
____________________________________________________________
_________________________________________________________________
(4) The credit shall be claimed on such form and containing
such information as may be prescribed by the Department of
Revenue.
(5) In the case of a credit allowed under this section:
(a) A nonresident shall be allowed the credit under this
section in the proportion provided in ORS 316.117.
(b) If a change in the status of a taxpayer from resident to
nonresident or from nonresident to resident occurs, the credit
allowed by this section shall be determined in a manner
consistent with ORS 316.117.
(c) If a change in the taxable year of a taxpayer occurs as
described in ORS 314.085, or if the Department of Revenue
terminates the taxpayer's taxable year under ORS 314.440, the
credit allowed under this section shall be prorated or computed
in a manner consistent with ORS 314.085.
(d) In the case of a qualified taxpayer who is married, a
credit shall be allowed under this section only if:
(A) The taxpayer files a joint return;
(B) The taxpayer files a separate return and is legally
separated or subject to a separate maintenance agreement; or
(C) The taxpayer files a separate return and the taxpayer and
the taxpayer's spouse reside in separate households on the last
day of the tax year with the intent of remaining in separate
households in the future.
(6) The credit allowed under this section shall not exceed the
tax liability of the taxpayer and may not be carried forward to a
succeeding tax year.
(7)(a) { - For tax years beginning on or after January 1,
1999, - } The minimum amount of earned income a taxpayer must
earn in order to be a qualified taxpayer shall be adjusted
{ + for tax years beginning in each calendar year + } by
multiplying $6,000 by the ratio of the { + monthly averaged + }
U.S. City Average Consumer Price Index for the { - average of
the monthly indexes for the second quarter - } { + 12
consecutive months ending August 31 + } of the { + prior + }
calendar year over the { - average of the monthly indexes
of - } { + monthly averaged index for + } the second quarter of
the calendar year 1998.
(b) As used in this subsection, 'U.S. City Average Consumer
Price Index' means the U.S. City Average Consumer Price Index for
All Urban Consumers (All Items) as published by the Bureau of
Labor Statistics of the United States Department of Labor.
(c) If any adjustment determined under paragraph (a) of this
subsection is not a multiple of $50, the adjustment shall be
rounded to the nearest multiple of $50.
SECTION 11. ORS 316.037 is amended to read:
316.037. (1)(a) A tax is imposed for each taxable year on the
entire taxable income of every resident of this state. The amount
of the tax shall be determined in accordance with the following
table:
_________________________________________________________________
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
If taxable income The tax is:
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
Not over $2,000.. 5% of
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
taxable
income
Over $2,000 but not
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
over $5,000.... $100 plus 7%
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
of the excess
over $2,000
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
Over $5,000...... $310 plus 9%
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
of the excess
over $5,000
_________________________________________________________________
____________________________________________________________
END OF POSSIBLE IRREGULAR TABULAR TEXT
____________________________________________________________
(b) For tax years beginning in each calendar year, the
Department of Revenue shall adopt a table which shall apply in
lieu of the table contained in paragraph (a) of this subsection,
as follows:
(A) The minimum and maximum dollar amounts for each rate
bracket for which a tax is imposed shall be increased by the
cost-of-living adjustment for the calendar year.
(B) The rate applicable to any rate bracket as adjusted under
subparagraph (A) of this paragraph shall not be changed.
(C) The amounts setting forth the tax, to the extent necessary
to reflect the adjustments in the rate brackets, shall be
adjusted.
(c) For purposes of paragraph (b) of this subsection, the
cost-of-living adjustment for any calendar year is the percentage
(if any) by which the { + monthly averaged + } U.S. City Average
Consumer Price Index for the { - average of the monthly indexes
for the second quarter of the calendar year - } { + 12
consecutive months ending August 31 of the prior calendar
year + } exceeds the { - average of the monthly indexes of - }
{ + monthly averaged index for + } the second quarter of the
calendar year 1992.
(d) As used in this subsection, 'U.S. City Average Consumer
Price Index' means the U.S. City Average Consumer Price Index for
All Urban Consumers (All Items) as published by the Bureau of
Labor Statistics of the United States Department of Labor.
(e) If any increase determined under paragraph (b) of this
subsection is not a multiple of $50, the increase shall be
rounded to the next lowest multiple of $50.
(2) A tax is imposed for each taxable year upon the entire
taxable income of every part-year resident of this state. The
amount of the tax shall be computed under subsection (1) of this
section as if the part-year resident were a full-year resident
and shall be multiplied by the ratio provided under ORS 316.117
to determine the tax on income derived from sources within this
state.
(3) A tax is imposed for each taxable year on the taxable
income of every full-year nonresident that is derived from
sources within this state. The amount of the tax shall be
determined in accordance with the table set forth in subsection
(1) of this section.
SECTION 12. ORS 316.085 is amended to read:
316.085. (1)(a) There shall be allowed a personal exemption
credit against taxes otherwise due under this chapter. The credit
shall equal { - $85 - } { + $90 + } multiplied by the number
of personal exemptions allowed under section 151 of the Internal
Revenue Code.
(b) In the case of an individual with respect to whom a credit
under paragraph (a) of this subsection is allowable to another
taxpayer for a taxable year beginning in the calendar year in
which the individual's taxable year begins, the credit amount
applicable to such individual for such individual's taxable year
is zero.
(2)(a) A nonresident shall be allowed the credit provided under
subsection (1) of this section computed in the same manner and
subject to the same limitations as the credit allowed to a
resident of this state. However, the credit shall be prorated
using the proportion provided in ORS 316.117.
(b) If a change in the taxable year of a taxpayer occurs as
described in ORS 314.085, or if the Department of Revenue
terminates the taxpayer's taxable year under ORS 314.440, the
credit allowed by this section shall be prorated or computed in a
manner consistent with ORS 314.085.
(c) If a change in the status of a taxpayer from resident to
nonresident or from nonresident to resident occurs, the credit
allowed by this section shall be determined in a manner
consistent with ORS 316.117.
(3) { - For each taxable year beginning on or after January
1, 1987, - } The Department of Revenue shall recompute the
dollar amount of the personal exemption credit allowed for state
personal income tax purposes. The computation shall be as
follows:
(a) Divide the { - Portland Consumer Price Index for the
average of the first six months of the current calendar year by
the Portland Consumer Price Index for - } { + monthly averaged
U.S. City Average Consumer Price Index for the 12 consecutive
months ending August 31 of the prior calendar year by + }the
{ - average of - } { + monthly averaged index for + } the
first six months of 1986.
(b) Recompute the dollar amount of the personal exemption
credit by multiplying { - $85 - } { + $90 + } by the
appropriate indexing factor determined as provided in paragraph
(a) of this subsection. Round off the amount obtained under this
paragraph to the nearest $1.
(4) As used in this section { + , + } { - : - }
{ - (a) 'Internal Revenue Code' means the federal Internal
Revenue Code, as amended and in effect on December 31, 1998. - }
{ - (b) 'Portland Consumer Price Index' means the Consumer
Price Index for All Urban Consumers (Portland -- all items) as
published by the Bureau of Labor Statistics of the United States
Department of Labor. For purposes of this paragraph, the revision
of the Consumer Price Index which is the most consistent with the
Portland Consumer Price Index for 1986 shall be used - } { +
'U.S. City Average Consumer Price Index' means the U.S. City
Average Consumer Price Index for All Urban Consumers (All Items)
as published by the Bureau of Labor Statistics of the United
States Department of Labor + }.
(5) For purposes of determining if a personal exemption credit
or an additional personal exemption credit is allowable under
this chapter or determining the number of personal exemption
credits allowed, section 151(d)(3) of the Internal Revenue Code
shall be disregarded.
SECTION 13. { + The amendments to ORS 315.262, 316.037 and
316.085 by sections 10 to 12 of this 2001 Act apply to tax years
beginning on or after January 1, 2002. + }
SECTION 14. ORS 316.695, as amended by section 1, chapter 917,
Oregon Laws 1999, is amended to read:
316.695. (1) In addition to the modifications to federal
taxable income contained in this chapter, there shall be added to
or subtracted from federal taxable income:
(a) If, in computing federal income tax for a taxable year, the
taxpayer deducted itemized deductions, as defined in section
63(d) of the Internal Revenue Code, the taxpayer shall add the
amount of itemized deductions deducted (the itemized deductions
less an amount, if any, by which the itemized deductions are
reduced under section 68 of the Internal Revenue Code).
(b) If, in computing federal income tax for a taxable year, the
taxpayer deducted the standard deduction, as defined in section
63(c) of the Internal Revenue Code, the taxpayer shall add the
amount of the standard deduction deducted.
(c)(A) From federal taxable income there shall be subtracted
the larger of (i) the taxpayer's itemized deductions or (ii) a
standard deduction. Except as provided in subsection (8) of this
section, for purposes of this subparagraph, 'standard deduction '
means the sum of the basic standard deduction and the additional
standard deduction.
(B) For purposes of subparagraph (A) of this paragraph, the
basic standard deduction is:
(i) $3,000, in the case of joint return filers or a surviving
spouse;
(ii) $1,800, in the case of an individual who is not a married
individual and is not a surviving spouse;
(iii) $1,500, in the case of a married individual who files a
separate return; or
(iv) $2,640, in the case of a head of household.
(C) For purposes of subparagraph (A) of this paragraph, the
additional standard deduction is the sum of each additional
amount to which the taxpayer is entitled under subsection (7) of
this section.
(D) As used in subparagraph (B) of this paragraph, ' surviving
spouse' and 'head of household' have the meaning given those
terms in section 2 of the Internal Revenue Code.
(E) In the case of the following, the standard deduction
referred to in subparagraph (A) of this paragraph shall be zero:
(i) A husband or wife filing a separate return where the other
spouse has claimed itemized deductions under subparagraph (A) of
this paragraph;
(ii) A nonresident alien individual;
(iii) An individual making a return for a period of less than
12 months on account of a change in his or her annual accounting
period;
(iv) An estate or trust;
(v) A common trust fund; or
(vi) A partnership.
(d) For the purposes of paragraph (c)(A) of this subsection,
the taxpayer's itemized deductions are the sum of:
(A) The taxpayer's itemized deductions as defined in section
63(d) of the Internal Revenue Code (reduced, if applicable, as
described under section 68 of the Internal Revenue Code) minus
the deduction for Oregon income tax (reduced, if applicable, by
the proportion that the reduction in federal itemized deductions
resulting from section 68 of the Internal Revenue Code bears to
the amount of federal itemized deductions as defined for purposes
of section 68 of the Internal Revenue Code); and
(B) The amount that may be taken into account under section
213(a) of the Internal Revenue Code, not to exceed seven and
one-half percent of the federal adjusted gross income of the
taxpayer, if the taxpayer has attained the following age before
the close of the taxable year, or, in the case of a joint return,
if either taxpayer has attained the following age before the
close of the taxable year:
(i) For taxable years beginning on or after January 1, 1991,
and before January 1, 1993, a taxpayer must attain 58 years of
age before the close of the taxable year.
(ii) For taxable years beginning on or after January 1, 1993,
and before January 1, 1995, a taxpayer must attain 59 years of
age before the close of the taxable year.
(iii) For taxable years beginning on or after January 1, 1995,
and before January 1, 1997, a taxpayer must attain 60 years of
age before the close of the taxable year.
(iv) For taxable years beginning on or after January 1, 1997,
and before January 1, 1999, a taxpayer must attain 61 years of
age before the close of the taxable year.
(v) For taxable years beginning on or after January 1, 1999, a
taxpayer must attain 62 years of age before the close of the
taxable year.
(2)(a) There shall be subtracted from federal taxable income
any portion of the distribution of a pension, profit-sharing,
stock bonus or other retirement plan, representing that portion
of contributions which were taxed by the State of Oregon but not
taxed by the Federal Government under laws in effect for tax
years beginning prior to January 1, 1969, or for any subsequent
year in which the amount that was contributed to the plan under
the Internal Revenue Code was greater than the amount allowed
under this chapter.
(b) Interest or other earnings on any excess contributions of a
pension, profit-sharing, stock bonus or other retirement plan not
permitted to be deducted under paragraph (a) of this subsection
shall not be added to federal taxable income in the year earned
by the plan and shall not be subtracted from federal taxable
income in the year received by the taxpayer.
(3)(a) Except as provided in paragraph (b) of this subsection
and subsection (4) of this section, in addition to the
adjustments to federal taxable income required by ORS 316.680,
there shall be added to federal taxable income the amount of any
federal income taxes in excess of $5,000, accrued by the taxpayer
during the taxable year as described in ORS 316.685, less the
amount of any refund of federal taxes previously accrued for
which a tax benefit was received.
(b) In the case of a husband and wife filing separate tax
returns, the amount added shall be in the amount of any federal
income taxes in excess of $2,500, less the amount of any refund
of federal taxes previously accrued for which a tax benefit was
received.
(c)(A) For a calendar year beginning on or after January 1,
2003, the Department of Revenue shall make a cost of living
adjustment to the federal income tax threshold amount described
in paragraphs (a) and (b) of this subsection.
(B) The cost of living adjustment for a calendar year is the
percentage by which the { + monthly averaged + } U.S. City
Average Consumer Price Index for the { - average of the monthly
indexes for the second quarter of the - } { + 12 consecutive
months ending August 31 of the prior + } calendar year exceeds
the { - average of the monthly indexes of the second quarter of
the calendar year 2002 - } { + monthly averaged index for the
period beginning September 1, 2000, and ending August 31,
2001 + }.
(C) As used in this paragraph, 'U.S. City Average Consumer
Price Index' means the U.S. City Average Consumer Price Index for
All Urban Consumers (All Items) as published by the Bureau of
Labor Statistics of the United States Department of Labor.
(D) If any adjustment determined under subparagraph (B) of this
paragraph is not a multiple of $50, the adjustment shall be
rounded to the next lower multiple of $50.
(E) The adjustment shall apply to all tax years beginning in
the calendar year for which the adjustment is made.
(4)(a) In addition to the adjustments required by ORS 316.130,
a full-year nonresident individual shall add to taxable income a
proportion of any accrued federal income taxes as computed under
ORS 316.685 in excess of $5,000 in the proportion provided in ORS
316.117.
(b) In the case of a husband and wife filing separate tax
returns, the amount added under this subsection shall be computed
in a manner consistent with the computation of the amount to be
added in the case of a husband and wife filing separate returns
under subsection (3) of this section. The method of computation
shall be determined by the Department of Revenue by rule.
(5) Subsections (3)(b) and (4)(b) of this section shall not
apply to married individuals living apart as defined in section
7703(b) of the Internal Revenue Code.
(6)(a) For tax years beginning on or after January 1, 1981, and
prior to January 1, 1983, income or loss taken into account in
determining federal taxable income by a shareholder of an S
corporation pursuant to sections 1373 to 1375 of the Internal
Revenue Code shall be adjusted for purposes of determining Oregon
taxable income, to the extent that as income or loss of the S
corporation, they were required to be adjusted under the
provisions of ORS chapter 317.
(b) For tax years beginning on or after January 1, 1983, items
of income, loss or deduction taken into account in determining
federal taxable income by a shareholder of an S corporation
pursuant to sections 1366 to 1368 of the Internal Revenue Code
shall be adjusted for purposes of determining Oregon taxable
income, to the extent that as items of income, loss or deduction
of the shareholder the items are required to be adjusted under
the provisions of this chapter.
(c) The tax years referred to in paragraphs (a) and (b) of this
subsection are those of the S corporation.
(d) As used in paragraph (a) of this subsection, an S
corporation refers to an electing small business corporation.
(7)(a) The taxpayer shall be entitled to an additional amount,
as referred to in subsection (1)(c)(A) and (C) of this section,
of $1,000:
(A) For himself or herself if he or she has attained age 65
before the close of his or her taxable year; and
(B) For the spouse of the taxpayer if the spouse has attained
age 65 before the close of the taxable year and an additional
exemption is allowable to the taxpayer for such spouse for
federal income tax purposes under section 151(b) of the Internal
Revenue Code.
(b) The taxpayer shall be entitled to an additional amount, as
referred to in subsection (1)(c)(A) and (C) of this section, of
$1,000:
(A) For himself or herself if he or she is blind at the close
of the taxable year; and
(B) For the spouse of the taxpayer if the spouse is blind as of
the close of the taxable year and an additional exemption is
allowable to the taxpayer for such spouse for federal income tax
purposes under section 151(b) of the Internal Revenue Code. For
purposes of this subparagraph, if the spouse dies during the
taxable year, the determination of whether such spouse is blind
shall be made immediately prior to death.
(c) In the case of an individual who is not married and is not
a surviving spouse, paragraphs (a) and (b) of this subsection
shall be applied by substituting '$1,200' for '$1,000. '
(d) For purposes of this subsection, an individual is blind
only if his or her central visual acuity does not exceed 20/200
in the better eye with correcting lenses, or if his or her visual
acuity is greater than 20/200 but is accompanied by a limitation
in the fields of vision such that the widest diameter of the
visual field subtends an angle no greater than 20 degrees.
(8) In the case of an individual with respect to whom a
deduction under section 151 of the Internal Revenue Code is
allowable for federal income tax purposes to another taxpayer for
a taxable year beginning in the calendar year in which the
individual's taxable year begins, the basic standard deduction
(referred to in subsection (1)(c)(B) of this section) applicable
to such individual for such individual's taxable year shall equal
the lesser of:
(a) The amount allowed to the individual under section 63(c)(5)
of the Internal Revenue Code for federal income tax purposes for
the tax year for which the deduction is being claimed; or
(b) The amount determined under subsection (1)(c)(B) of this
section.
SECTION 15. ORS 316.362 is amended to read:
316.362. (1) An income tax return with respect to the tax
imposed by this chapter shall be made by the following:
(a) Every resident individual:
(A) Who is required to file a federal income tax return for the
taxable year; or
{ - (B) Who has federal net income of more than $600 if
single or more than $1,200 if married; or - }
{ - (C) Who, having attained the age of 65 before the close
of a taxable year, has federal net income of more than $1,200 if
single, more than $1,800 if married and the spouse of the
individual has not attained the age of 65, or more than $2,400,
if both have attained the age of 65, before the close of the
taxable year. - }
{ + (B) Who has gross income greater than the sum of:
(i) The basic standard deduction allowed under ORS 316.695
(1)(c)(B);
(ii) Any additional standard deduction allowed to the taxpayer
under ORS 316.695 (7); and
(iii) An amount equal to the income equivalent of one personal
exemption credit under ORS 316.085 (3)(b) if unmarried, or equal
to the income equivalent of two personal exemption credits under
ORS 316.085 (3)(b) if married. + }
(b) Every nonresident individual:
(A) Who has federal gross income from sources in this state of
more than $600 if single and $1,200 if married; or
(B) Who, having attained the age of 65 before the close of a
taxable year, has federal gross income from sources within this
state of more than $1,200 if single, more than $1,800 if married
and the spouse of the individual has not yet attained the age of
65, or more than $2,400 if both have attained the age of 65,
before the close of the taxable year; or
(C) Who has any taxable income.
(c) Every resident estate or trust that is required to file a
federal income tax return.
(d) Every nonresident estate that has federal gross income of
$600 or more for the taxable year from sources within this state.
(e) Every nonresident trust that for the taxable year has from
sources within this state any taxable income, or gross income of
$600 or more regardless of the amount of taxable income.
(2) Nothing contained in this section shall preclude the
Department of Revenue from requiring any individual, estate or
trust to file a return when, in the judgment of the department, a
return should be filed.
{ + (3) For purposes of this section, the income equivalent
of a personal exemption credit under ORS 316.085 (3)(b) shall be
determined as follows:
(a) Divide the personal exemption credit amount by the rate
applicable to the lowest income bracket under ORS 316.037.
(b) If the resulting quotient is less than the maximum amount
of income subject to the rate used in paragraph (a) of this
subsection, the quotient is the income equivalent.
(c) If the resulting quotient is more than the maximum amount
of income subject to the rate used in paragraph (a) of this
subsection:
(A) Multiply the maximum amount of income subject to the rate
used in paragraph (a) of this subsection by the rate used in
paragraph (a) of this subsection.
(B) Determine the difference between the product calculated
under subparagraph (A) of this paragraph and the personal
exemption credit amount.
(C) Divide the difference determined in subparagraph (B) of
this paragraph by the rate applicable to the income bracket that
is the next succeeding the lowest income bracket under ORS
316.037.
(D) Add the quotient determined in subparagraph (C) of this
paragraph to the maximum amount of income subject to the rate
used in paragraph (a) of this subsection. The sum is the income
equivalent. + }
SECTION 16. { + The amendments to ORS 316.362 by section 15 of
this 2001 Act apply to tax years beginning on or after January 1,
2002. + }
SECTION 17. ORS 305.305 is amended to read:
305.305. (1) As used in this section, 'appeal' means an appeal
to the Internal Revenue Service or any federal court or an appeal
to another state's taxing authority or any state court having
jurisdiction over the other state's tax matters that are the
subject of the appeal.
(2) If a deficiency is based wholly or in part upon an Internal
Revenue Service revenue agent's report made upon any audit or
adjustment of the person's federal income tax return or upon an
audit report of another state's taxing authority, the following
procedures shall apply:
(a) If the person has filed a timely appeal from the deficiency
asserted by the service or other state taxing authority, the
person may file proof of the appeal with the Department of
Revenue. If proof of the appeal is received before the tax is
assessed, the deficiency shall be assessed without penalty for
failure to pay the tax at the time the tax became due.
(b) If the department assesses the deficiency before receipt of
proof of the filing of a timely appeal, the person may file the
proof with the department. If the proof is filed after the tax
has been assessed with a penalty for failure to pay the tax at
the time the tax became due, the penalty shall not be waived.
(3) Notwithstanding any other provision of law, filing of proof
of a timely appeal under subsection (2) of this section shall
extend the time for filing a complaint or petition with the tax
court in accordance with this subsection. The person shall notify
the department in writing within 30 days after the appeal is
finally resolved. The department shall review the issues raised
by the appeal and shall make a determination of the effect upon
the person's state income or excise tax liabilities. The
department shall then issue a refund, notice of denial of refund
or notice of assessment, as appropriate, to the person. If the
person disagrees with the department's action, the person may
file a complaint or petition with the tax court within
{ - 60 - } { + 90 + } days after the date of the department's
action as provided under ORS 305.404 to 305.560. Notwithstanding
ORS 314.835 or any other law relating to confidentiality, the
department may notify the magistrate division of the tax court if
proof of a timely appeal is filed with the department or if the
department determines that an appeal has been finally resolved.
(4) Except as provided in ORS 314.440 (2), when the department
receives proof of a timely appeal, the department shall suspend
action to collect the deficiency until the issues are resolved.
(5) If interest imposed by the federal government on a federal
deficiency or partnership settlement agreement has been suspended
under section 6601(c) of the Internal Revenue Code, interest
imposed on a corresponding deficiency determined under ORS
305.265 and this section shall also be suspended. The suspension
of interest imposed under ORS 305.265 shall be effective as of
the date the federal interest is suspended and for the duration
for which the federal interest is suspended.
(6) Except as provided in ORS 314.415 (5), the provisions of
this section shall constitute the exclusive remedy of a person
whose notice of deficiency is based wholly or in part upon a
federal revenue agent's report or the audit report of another
state's taxing authority.
SECTION 18. { + The amendments to ORS 305.305 by section 17 of
this 2001 Act apply to refunds, notices of denial of refunds or
notices of assessment issued by the Department of Revenue on or
after the effective date of this 2001 Act. + }
SECTION 19. ORS 315.068 is amended to read:
315.068. (1) A credit against the taxes otherwise due under ORS
chapter 316 (or, if the taxpayer is a corporation, under ORS
chapter 317 or 318) shall be allowed to a taxpayer for a claim of
right income repayment adjustment.
(2) The credit shall be allowed under this section only if the
taxpayer's federal tax liability is determined under section
1341(a) { - (5) - } of the Internal Revenue Code.
(3) The amount of the credit shall equal the difference
between:
(a) The taxpayer's actual Oregon state tax liability for the
tax year for which the claim of right income was included in
gross income for federal tax purposes; and
(b) The taxpayer's Oregon state tax liability for that tax
year, had the claim of right income not been included in gross
income for federal tax purposes.
(4) A credit under this section shall be allowed only for the
tax year for which the taxpayer's federal tax liability is
determined under section 1341 of the Internal Revenue Code for
federal tax purposes.
(5) If the amount allowable as a credit under this section,
when added to the sum of the amounts allowable as a payment of
tax under ORS 314.505 to 314.525, 316.187 and 316.583, other
payments of tax and other refundable credit amounts, exceeds the
taxes imposed by ORS chapters 314 to 318 (reduced by any
nonrefundable credits allowed for the tax year), the excess shall
be treated as an overpayment of tax and shall be refunded or
applied in the same manner as other tax overpayments.
(6) As used in this section, 'claim of right income' means:
(a) An item included in federal gross income for a prior tax
year because it appeared that the taxpayer had an unrestricted
right to the item; and
(b) An item for which the taxpayer's federal tax liability is
adjusted under section 1341 of the Internal Revenue Code because
the taxpayer did not have an unrestricted right to the item of
gross income.
SECTION 20. { + The amendments to ORS 315.068 by section 19 of
this 2001 Act apply to tax years beginning on or after January 1,
1998. + }
SECTION 21. ORS 305.265 is amended to read:
305.265. (1) Except as provided in ORS 305.305, the provisions
of this section shall apply to all reports or returns of tax or
tax liability including claims under ORS 310.630 to 310.706 filed
with the Department of Revenue under the revenue and tax laws
administered by it, except those filed under ORS chapter 320 and
ORS 323.005 to 323.455 and 323.990.
(2) As soon as practicable after a report or return is filed,
the department shall examine or audit it, if required by law or
the department deems such examination or audit practicable. If
the department discovers from an examination or an audit of a
report or return or otherwise that a deficiency exists, it shall
compute the tax and give notice to the person filing the return
of the deficiency and of the department's intention to assess the
deficiency, plus interest and any appropriate penalty. Except as
provided in subsection (3) of this section, the notice shall:
(a) State the reason for each adjustment;
(b) Give a reference to the statute, regulation or department
ruling upon which the adjustment is based; and
(c) Be certified by the department that the adjustments are
made in good faith and not for the purpose of extending the
period of assessment.
(3) When the notice of deficiency described in subsection (2)
of this section results from the correction of a mathematical or
clerical error and states what would have been the correct tax
but for the mathematical or clerical error, such notice need
state only the reason for each adjustment to the report or
return.
(4) With respect to any tax return filed under ORS chapter 314,
316, 317 or 318, deficiencies shall include but not be limited to
the assertion of additional tax arising from:
(a) The failure to report properly items or amounts of income
subject to or which are the measure of the tax;
(b) The deduction of items or amounts not permitted by law;
(c) Mathematical errors in the return or the amount of tax
shown due in the records of the department; or
(d) Improper credits or offsets against the tax claimed in the
return.
(5)(a) The notice of deficiency shall be accompanied by a
statement explaining the person's right to make written
objections, the person's right to request a conference and the
procedure for requesting a conference. The statement, and an
accompanying form, shall also explain that conference
determinations are routinely transmitted via regular mail and
that a person desiring to have conference determinations
transmitted by certified mail may do so by indicating on the form
the person's preference for certified mail and by returning the
form with the person's written objections as described in
paragraph (b) of this subsection.
(b) Within 30 days from the date of the notice of deficiency,
the person given notice shall pay the deficiency with interest
computed to the date of payment and any penalty proposed. Or
within that time the person shall advise the department in
writing of objections to the deficiency, and may request a
conference with the department, which shall be held prior to the
expiration of the one-year period set forth in subsection (7) of
this section.
(6) If a request for a conference is made, the department shall
notify the person of a time and place for conference and appoint
a conference officer to meet with the person for an informal
discussion of the matter. After the conference, the conference
officer shall send the determination of the issues to the person.
The determination letter shall be sent by regular mail, or by
certified mail if the person given notice has indicated a
preference for transmission of the determination by certified
mail. The department shall assess any deficiency in the manner
set forth in subsection (7) of this section. If no conference is
requested and written objections are received, the department
shall make a determination of the issues considering such
objections, and shall assess any deficiency in the manner
provided in subsection (7) of this section. The failure to
request or have a conference shall not affect the rights of
appeal otherwise provided by law.
(7) If neither payment nor written objection to the deficiency
is received by the department within 30 days after the notice of
deficiency has been mailed, the department shall assess the
deficiency, plus interest and penalties, if any, and shall send
the person a notice of assessment, stating the amount so
assessed, and interest and penalties. The notice of assessment
shall be mailed within one year from the date of the notice of
deficiency unless an extension of time is agreed upon as
described in subsection (8) of this section. The notice shall
advise the person of the rights of appeal.
(8) If, prior to the expiration of any period of time
prescribed in subsection (7) of this section for giving of notice
of assessment, the department and the person consent in writing
to the deficiency being assessed after the expiration of such
prescribed period, such deficiency may be assessed at any time
prior to the expiration of the period agreed upon. The period so
agreed upon may be extended by subsequent agreements in writing
made before the expiration of the period agreed upon.
(9) The failure to hold a requested conference within the
one-year period prescribed in subsection (5) of this section
shall not invalidate any assessment of deficiency made within the
one-year period pursuant to subsection (7) of this section or
within any extension of time made pursuant to subsection (8) of
this section, but shall invalidate any assessment of interest or
penalties attributable to the deficiency. After an assessment has
been made, the department and the person assessed may still hold
a conference within 90 days from the date of assessment. If a
conference is held, the 90-day period under ORS 305.280 (2) shall
run from the date of the conference officer's written
determination of the issues.
(10)(a) In the case of a failure to file a report or return on
the date prescribed therefor (determined with regard to any
extension for filing), the department shall determine the tax
according to the best of its information and belief, assess the
tax plus appropriate penalty and interest, and give written
notice of the failure to file the report or return and of the
determination and assessment to the person required to make the
filing. The amount of tax shall be reduced by the amount of any
part of the tax which is paid on or before the date prescribed
for payment of the tax and by the amount of any credit against
the tax which may be lawfully claimed upon the return.
(b) Notwithstanding subsection (14) of this section and ORS
305.280, and only to the extent allowed by rules adopted by the
department, the department may accept the filing of a report or
return submitted by a person who has been assessed a tax under
paragraph (a) of this subsection.
(c) The department may reject a report or return:
(A) That is not verified as required by ORS 305.810;
(B) That the department determines is not true and correct as
to every material matter as required by ORS 305.815; or
(C) If the department may impose a penalty under ORS 316.992
(1) with respect to the report or return.
(d) If the department rejects a report or return of a person
assessed a tax under paragraph (a) of this subsection, the
department shall issue a notice of rejection to the person. The
person may appeal the rejection to the magistrate division of the
Oregon Tax Court only if:
(A) The report or return was filed within 90 days of the date
the department's assessment under paragraph (a) of this
subsection was issued; and
(B) The appeal is filed within 90 days of the date shown on the
notice of rejection.
(e) If the person assessed under paragraph (a) of this
subsection submits a report or return to the department and
appeals the assessment to the tax court, the department may
request a stay of action from the court pending review of the
report or return. If the department:
(A) Accepts the filing of the report or return, the appeal
shall be dismissed as moot.
(B) Rejects the report or return, the stay of action on the
appeal shall be lifted.
(f) If the department accepts the filing of a report or return,
the department may reduce the assessment issued under paragraph
(a) of this subsection. A report or return filed under this
subsection that is accepted by the department, whether or not the
assessment has been reduced, shall be considered a report or
return described in subsection (1) of this section and shall be
subject to the provisions of this section, including but not
limited to examination and adjustment pursuant to subsection (2)
of this section.
(g) The department may refund payments made with respect to a
report or return filed and accepted pursuant to this subsection.
If the report or return is filed within three years of the due
date for filing the report or return, excluding extensions, the
refund shall be made as provided by ORS 305.270 and 314.415. If
the report or return is not filed within three years of the due
date for filing the report or return, excluding extensions, the
refund shall be limited to payments received within the two-year
period ending on the date the report or return is received by the
department { + and payments received after the date the report
or return is received by the department + }. Interest shall be
paid at the rate established under ORS 305.220 for each month or
fraction of a month from the date the report or return is
received by the department to the time the refund is made.
(11) Mailing of notice to the person at the person's last-known
address shall constitute the giving of notice as prescribed in
this section.
(12) If a return is filed with the department accompanied by
payment of less than the amount of tax shown on or from the
information on the return as due, the difference between the tax
and the amount submitted is considered as assessed on the due
date of the report or return (determined with regard to any
extension of time granted for the filing of the return) or the
date the report or return is filed, whichever is later. For
purposes of this subsection, the amount of tax shown on or from
the information on the return as due shall be reduced by the
amount of any part of the tax that is paid on or before the due
date prescribed for payment of the tax, and by any credits
against the tax that are claimed on the return. If the amount
required to be shown as tax on a return is less than the amount
shown as tax on the return, this subsection shall be applied by
substituting the lesser amount.
(13) Every deficiency shall bear interest at the rate
established under ORS 305.220 for each month or fraction of a
month computed from the due date of the return to date of
payment. If the return was falsely prepared and filed with
intent to evade the tax, a penalty equal to 100 percent of the
deficiency shall be assessed and collected. All payments received
shall be credited first to penalty, then to interest accrued, and
then to tax due.
(14) If the deficiency is paid in full before a notice of
assessment is issued, the department is not required to send a
notice of assessment, and the tax shall be considered as assessed
as of the date which is 30 days from the date of the notice of
deficiency or the date the deficiency is paid, whichever is the
later. A partial payment of the deficiency shall constitute only
a credit to the account of the person assessed. Assessments and
billings of taxes shall be final after the expiration of the
appeal period specified in ORS 305.280, except to the extent that
an appeal is allowed under ORS 305.280 (3) following payment of
the tax.
(15) Appeal may be taken to the tax court from any notice of
assessment. The provisions of this chapter with respect to
appeals to the tax court shall apply to any deficiency, penalty
or interest assessed.
SECTION 22. { + The amendments to ORS 305.265 by section 21 of
this 2001 Act apply to reports or returns in the possession of
the Department of Revenue on October 23, 1999, or filed on or
after October 23, 1999. + }
SECTION 23. ORS 305.230 is amended to read:
305.230. Notwithstanding ORS 9.320:
(1) Any person who is duly qualified to practice law or public
accountancy in this state or the authorized employee of a
taxpayer who is regularly employed by the taxpayer in tax matters
may represent the taxpayer before a tax court magistrate or the
Department of Revenue in any conference or proceeding with
respect to the administration of any tax.
(2) Any person who is duly licensed by the State Board of Tax
Service Examiners or who is exempt from such licensing
requirement as provided for and limited by ORS 673.610 may
represent a taxpayer before a tax court magistrate or the
department in any conference or proceeding with respect to the
administration of any tax on or measured by net income.
(3) Any shareholder of an S corporation, as defined in section
1361 of the Internal Revenue Code, as amended and in effect on
December 31, { - 1998 - } { + 2000 + }, may represent the
corporation in any proceeding before a tax court magistrate or
the department in the same manner as if the shareholder were a
partner and the S corporation were a partnership. The S
corporation must designate in writing a tax matters shareholder
authorized to represent the S corporation.
(4) Any person who is licensed as a real estate broker under
ORS 696.025 or is a state certified appraiser or state licensed
appraiser under ORS 674.310 or is a registered appraiser under
ORS 308.010 may represent a taxpayer before a tax court
magistrate or the department in any conference or proceeding with
respect to the administration of any ad valorem property tax.
(5) A general partner who has been designated by members of a
partnership as their tax matters partner under ORS 305.242 may
represent those partners in any conference or proceeding with
respect to the administration of any tax on or measured by net
income.
(6) In a small claims procedure, a taxpayer may be represented
by any of the persons described in subsections (1) to (5) of this
section or by any other person permitted by the tax court.
(7) No person shall be recognized as representing a taxpayer
pursuant to this section unless there is first filed with the
magistrate or department a written authorization, or unless it
appears to the satisfaction of the magistrate or department that
the representative does in fact have authority to represent the
taxpayer. A person recognized as an authorized representative
under rules or procedures adopted by the tax court shall be
considered an authorized representative by the department.
(8) A taxpayer represented by someone other than an attorney is
bound by all things done by the authorized representative, and
may not thereafter claim any proceeding was legally defective
because the taxpayer was not represented by an attorney.
(9) Prior to the holding of a conference or proceeding before
the tax court magistrate or department, written notice shall be
given by the magistrate or department to the taxpayer of the
provisions of subsections (6) and (8) of this section.
SECTION 24. ORS 305.494 is amended to read:
305.494. Notwithstanding ORS 9.320, any shareholder of an S
corporation as defined in section 1361 of the Internal Revenue
Code, as amended and in effect on December 31, { - 1998 - }
{ + 2000 + }, may represent the corporation in any proceeding
before the Oregon Tax Court in the same manner as if the
shareholder were a partner and the S corporation were a
partnership.
SECTION 25. ORS 305.690 is amended to read:
305.690. As used in ORS 305.690 to 305.753, unless the context
otherwise requires:
(1) 'Biennial years' means the two income tax years of
individual taxpayers that begin in the two calendar years
immediately following the calendar year in which a list is
certified under ORS 305.715.
(2) 'Commission' means the Oregon Charitable Checkoff
Commission.
(3) 'Department' means the Department of Revenue.
(4) 'Internal Revenue Code' means the federal Internal Revenue
Code as amended and in effect on December 31, { - 1998 - }
{ + 2000 + }.
SECTION 26. ORS 307.130 is amended to read:
307.130. (1) Upon compliance with ORS 307.162, the following
property owned or being purchased by art museums, volunteer fire
departments, or incorporated literary, benevolent, charitable and
scientific institutions shall be exempt from taxation:
(a) Except as provided in ORS 748.414, only such real or
personal property, or proportion thereof, as is actually and
exclusively occupied or used in the literary, benevolent,
charitable or scientific work carried on by such institutions.
(b) Parking lots used for parking or any other use as long as
that parking or other use is permitted without charge for no
fewer than 355 days during the tax year.
(c) All real or personal property of a rehabilitation facility
or any retail outlet thereof, including inventory. As used in
this subsection, 'rehabilitation facility' means either those
facilities defined in ORS 344.710 or facilities which provide
physically, mentally or emotionally disabled individuals with
occupational rehabilitation activities of an educational or
therapeutic nature, even if remuneration is received by the
individual.
(d) All real and personal property of a retail store dealing
exclusively in donated inventory, where the inventory is
distributed without cost as part of a welfare program or where
the proceeds of the sale of any inventory sold to the general
public are used to support a welfare program. As used in this
subsection, ' welfare program' means the providing of food,
shelter, clothing or health care, including dental service, to
needy persons without charge.
(e) All real and personal property of a retail store if:
(A) The retail store deals primarily and on a regular basis in
donated and consigned inventory;
(B) The individuals who operate the retail store are all
individuals who work as volunteers; and
(C) The inventory is either distributed without charge as part
of a welfare program, or sold to the general public and the sales
proceeds used exclusively to support a welfare program. As used
in this paragraph, 'primarily' means at least one-half of the
inventory.
(f) The real and personal property of an art museum that is
used in conjunction with the public display of works of art or
used to educate the public about art, but not including any
portion of the art museum's real or personal property that is
used to sell, or hold out for sale, works of art, reproductions
of works of art or other items to be sold to the public.
(g) All real and personal property of a volunteer fire
department that is used in conjunction with services and
activities for providing fire protection to all residents within
a fire response area.
(2) An art museum or institution shall not be deprived of an
exemption under this section solely because its primary source of
funding is from one or more governmental entities.
(3) An institution shall not be deprived of an exemption under
this section because its purpose or the use of its property is
not limited to relieving pain, alleviating disease or removing
constraints.
(4) As used in this section:
(a) 'Art museum' means a nonprofit corporation organized to
display works of art to the public.
(b) 'Internal Revenue Code' means the federal Internal Revenue
Code as amended and in effect on December 31, { - 1998 - }
{ + 2000 + }.
(c) 'Nonprofit corporation' means a corporation that:
(A) Is organized not for profit, pursuant to ORS chapter 65 or
any predecessor of ORS chapter 65; or
(B) Is organized and operated as described under section 501(c)
of the Internal Revenue Code.
(d) 'Volunteer fire department' means a nonprofit corporation
organized to provide fire protection services in a specific
response area.
SECTION 27. ORS 307.147 is amended to read:
307.147. (1) For purposes of this section:
(a) 'Internal Revenue Code' means the federal Internal Revenue
Code as amended and in effect on December 31, { - 1998 - }
{ + 2000 + }.
(b) 'Nonprofit corporation' means a corporation that:
(A) Is organized not for profit, pursuant to ORS chapter 65 or
any predecessor of ORS chapter 65; or
(B) Is organized and operated as described under section 501(c)
of the Internal Revenue Code.
(c) 'Senior services center' means property that:
(A) Is owned or being purchased by a nonprofit corporation; and
(B) Is actually and exclusively used to provide services and
activities (including parking) primarily to or for persons over
50 years of age; and
(C) Is open generally to all persons over 50 years of age; and
(D) Is not used primarily for fund-raising activities; and
(E) Is not a residential or dwelling place.
(2) Upon compliance with ORS 307.162, a senior services center
is exempt from ad valorem property taxation.
SECTION 28. ORS 310.140 is amended to read:
310.140. The Legislative Assembly finds that section 11b,
Article XI of the Oregon Constitution, was drafted by citizens
and placed before the voters of the State of Oregon by initiative
petition. Section 11b, Article XI of the Oregon Constitution,
uses terms that do not have established legal meanings and
require definition by the Legislative Assembly. Section 11b,
Article XI of the Oregon Constitution, was amended by section 11
(11), Article XI of the Oregon Constitution. This section is
intended to interpret the terms of section 11b, Article XI of the
Oregon Constitution, as originally adopted and as amended by
section 11 (11), Article XI of the Oregon Constitution,
consistent with the intent of the people in adopting these
provisions, so that the provisions of section 11b, Article XI of
the Oregon Constitution, may be given effect uniformly throughout
the State of Oregon, with minimal confusion and misunderstanding
by citizens and affected units of government. As used in the
revenue and tax laws of this state, and for purposes of section
11b, Article XI of the Oregon Constitution:
(1) 'Tax on property' means any tax, fee, charge or assessment
imposed by any government unit upon property or upon a property
owner as a direct consequence of ownership of that property, but
does not include incurred charges or assessments for local
improvements. As used in this subsection, 'property' means real
or tangible personal property, and intangible property that is
part of a unit of real or tangible personal property to the
extent that such intangible property is subject to a tax on
property.
(2) 'Direct consequence of ownership' means that the obligation
of the owner of property to pay a tax arises solely because that
person is the owner of the property, and the obligation to pay
the tax arises as an immediate and necessary result of that
ownership without respect to any other intervening transaction,
condition or event.
(3)(a) 'Incurred charge' means a charge imposed by a unit of
government on property or upon a property owner that does not
exceed the actual cost of providing goods or services and that
can be controlled or avoided by the property owner because:
(A) The charge is based on the quantity of the goods or
services used, and the owner has direct control over the
quantity;
(B) The goods or services are provided only on the specific
request of the property owner; or
(C) The goods or services are provided by the government unit
only after the individual property owner has failed to meet
routine obligations of ownership of the affected property, and
such action is deemed necessary by an appropriate government unit
to enforce regulations pertaining to health or safety.
(b) For purposes of this subsection, an owner of property may
control or avoid an incurred charge if the owner is capable of
taking action to affect the amount of a charge that is or will be
imposed or to avoid imposition of a charge even if the owner must
incur expense in so doing.
(c) For purposes of paragraph (a)(A) of this subsection, an
owner of property has direct control over the quantity of goods
or services if the owner of property has the ability, whether or
not that ability is exercised, to determine the quantity of goods
or services provided or to be provided.
(4) 'Specific request' means:
(a) An affirmative act by a property owner to seek or obtain
delivery of goods or services;
(b) An affirmative act by a property owner, the legal
consequence of which is to cause the delivery of goods or
services to the property owner; or
(c) Failure of an owner of property to change a request for
goods or services made by a prior owner of the property.
(5) 'Routine obligations of ownership' means a standard of
operation, maintenance, use or care of property established by
law, or if established by custom or common law, a standard that
is reasonable for the type of property affected.
(6) 'Assessment for local improvement' means any tax, fee,
charge or assessment that does not exceed the actual cost
incurred by a unit of government for design, construction and
financing of a local improvement.
(7)(a) 'Local improvement' means a capital construction
project, or part thereof, undertaken by a governmental unit,
pursuant to ORS 223.387 to 223.399, or pursuant to a local
ordinance or resolution prescribing the procedure to be followed
in making local assessments for benefits from a local improvement
upon the lots that have been benefited by all or a part of the
improvement:
(A) That provides a special benefit only to specific properties
or rectifies a problem caused by specific properties;
(B) The costs of which are assessed against those properties in
a single assessment upon the completion of the project; and
(C) For which the property owner may elect to make payment of
the assessment plus appropriate interest over a period of at
least 10 years.
(b) For purposes of paragraph (a) of this subsection, the
status of a capital construction project as a local improvement
is not affected by the accrual of a general benefit to property
other than the property receiving the special benefit.
(8) 'Single assessment' means the complete assessment process,
including preassessment, assessment or reassessment, for any
local improvement authorized by ORS 223.387 to 223.399, or a
local ordinance or resolution that provides the procedure to be
followed in making local assessments for benefits from a local
improvement upon lots that have been benefited by all or part of
the improvement.
(9) 'Special benefit only to specific properties' shall have
the same meaning as 'special and peculiar benefit' as that term
is used in ORS 223.389.
(10) 'Actual cost' means all direct or indirect costs incurred
by a government unit in order to deliver goods or services or to
undertake a capital construction project. The ' actual cost' of
providing goods or services to a property or property owner
includes the average cost or an allocated portion of the total
amount of the actual cost of making a good or service available
to the property or property owner, whether stated as a minimum,
fixed or variable amount. 'Actual cost' includes, but is not
limited to, the costs of labor, materials, supplies, equipment
rental, property acquisition, permits, engineering, financing,
reasonable program delinquencies, return on investment, required
fees, insurance, administration, accounting, depreciation,
amortization, operation, maintenance, repair or replacement and
debt service, including debt service payments or payments into
reserve accounts for debt service and payment of amounts
necessary to meet debt service coverage requirements.
(11) 'Bonded indebtedness' means any formally executed written
agreement representing a promise by a unit of government to pay
to another a specified sum of money, at a specified date or dates
at least one year in the future.
(12)(a) 'Exempt bonded indebtedness' means:
(A) Bonded indebtedness authorized by a specific provision of
the Oregon Constitution;
(B) Bonded indebtedness incurred or to be incurred for capital
construction or capital improvements that was issued as a general
obligation of the issuing governmental unit on or before November
6, 1990;
(C) Bonded indebtedness incurred or to be incurred for capital
construction or capital improvements that was issued as a general
obligation of the issuing governmental unit after November 6,
1990, with the approval of the electors of the issuing
governmental unit; or
(D) Bonded indebtedness incurred or to be incurred for capital
construction or capital improvements, if the issuance of the
bonds is approved by voters on or after December 5, 1996, in an
election that is in compliance with the voter participation
requirements of section 11 (8), Article XI of the Oregon
Constitution.
(b) 'Exempt bonded indebtedness' includes bonded indebtedness
issued to refund or refinance any bonded indebtedness described
in paragraph (a) of this subsection.
(13) 'Capital construction':
(a) For bonded indebtedness issued prior to December 5, 1996,
and for the proceeds of any bonded indebtedness approved by
electors prior to December 5, 1996, that were spent or
contractually obligated to be spent prior to June 20, 1997, means
the construction, modification, replacement, repair, remodeling
or renovation of a structure, or addition to a structure, that is
expected to have a useful life of more than one year, and
includes, but is not limited to:
(A) Acquisition of land, or a legal interest in land, in
conjunction with the capital construction of a structure.
(B) Acquisition, installation of machinery or equipment,
furnishings or materials that will become an integral part of a
structure.
(C) Activities related to the capital construction, such as
planning, design, acquisition of interim or permanent financing,
research, land use and environmental impact studies, acquisition
of permits or licenses or other services connected with the
construction.
(D) Acquisition of existing structures, or legal interests in
structures, in conjunction with the capital construction.
(b) For bonded indebtedness issued on or after December 5,
1996, except for the proceeds of any bonded indebtedness approved
by electors prior to December 5, 1996, that were spent or
contractually obligated to be spent before June 20, 1997, has the
meaning given that term in paragraph (a) of this subsection,
except that 'capital construction':
(A) Includes public safety and law enforcement vehicles with a
projected useful life of five years or more; and
(B) Does not include:
(i) Maintenance and repairs, the need for which could be
reasonably anticipated;
(ii) Supplies and equipment that are not intrinsic to the
structure; or
(iii) Furnishings, unless the furnishings are acquired in
connection with the acquisition, construction, remodeling or
renovation of a structure, or the repair of a structure that is
required because of damage or destruction of the structure.
(14) 'Structure' means any temporary or permanent building or
improvement to real property of any kind that is constructed on
or attached to real property, whether above, on or beneath the
surface.
(15) 'Capital improvements':
(a) For bonded indebtedness issued prior to December 5, 1996,
and for the proceeds of any bonded indebtedness approved by
electors before December 5, 1996, that were spent or
contractually obligated to be spent before June 20, 1997, means
land, structures, facilities, as that term is defined in ORS
288.805, machinery, equipment or furnishings having a useful life
longer than one year.
(b) For bonded indebtedness issued on or after December 5,
1996, except for the proceeds of any bonded indebtedness approved
by electors prior to December 5, 1996, that were spent or
contractually obligated to be spent before June 20, 1997, has the
meaning given that term in paragraph (a) of this subsection,
except that 'capital improvements':
(A) Includes public safety and law enforcement vehicles with a
projected useful life of five years or more; and
(B) Does not include:
(i) Maintenance and repairs, the need for which could be
reasonably anticipated;
(ii) Supplies and equipment that are not intrinsic to the
structure; or
(iii) Furnishings, unless the furnishings are acquired in
connection with the acquisition, construction, remodeling or
renovation of a structure, or the repair of a structure that is
required because of damage or destruction of the structure.
(16) 'Maintenance and repairs, the need for which could be
reasonably anticipated':
(a) Means activities, the type of which may be deducted as an
expense under the provisions of the federal Internal Revenue
Code, as amended and in effect on December 31, { - 1998 - }
{ + 2000 + }, and that keep the property in ordinarily
efficient operating condition, and that do not add materially to
the value of the property nor appreciably prolong the life of the
property;
(b) Does not include maintenance and repair of property that is
required by damage, destruction or defect in design, or that was
otherwise not reasonably expected at the time the property was
constructed or acquired, or the addition of material that is in
the nature of the replacement of property and that arrests the
deterioration or appreciably prolongs the useful life of the
property; and
(c) Does not include street and highway construction, overlay
and reconstruction.
(17) 'Supplies and equipment intrinsic to a structure ' means
the supplies and equipment that are necessary to permit a
structure to perform the functions for which the structure was
constructed, or that will, upon installation, constitute fixtures
considered to be part of the real property that is comprised, in
whole or part, of the structure and land supporting the
structure.
(18) 'Projected useful life' means the useful life, as
reasonably estimated by the unit of government undertaking the
capital construction or capital improvement project, beginning
with the date the property was acquired, constructed or
reconstructed and based on the property's condition at the time
the property was acquired, constructed or reconstructed.
SECTION 29. ORS 310.630 is amended to read:
310.630. As used in ORS 310.630 to 310.706:
(1) 'Department' means the Department of Revenue.
(2) 'Fuel and utility payments' include payments for heat,
lights, water, sewer and garbage made solely to secure those
commodities or services for the homestead of the taxpayer. '
Payments for heat' mean those payments made to secure the
commodities or services to be used as the principal source of
heat for the homestead of the taxpayer and includes payments for
natural gas, oil, firewood, coal, sawdust, electricity, steam or
other materials that are capable of use as a primary source of
heat for the homestead. 'Fuel and utility payments' do not
include telephone service.
(3) 'Gross rent' means contract rent paid plus the fuel and
utility payments made for the homestead in addition to the
contract rent, during the calendar year for which the claim is
filed.
(4) 'Homestead' means the taxable principal dwelling located in
Oregon, either real or personal property, rented by the taxpayer,
and the taxable land area of the tax lot upon which it is built.
(5) 'Household' means the taxpayer, the spouse of the taxpayer
and all other persons residing in the homestead during any part
of the calendar year for which a claim is filed.
(6) 'Household income' means the aggregate income of the
taxpayer and the spouse of the taxpayer who reside in the
household, that was received during the calendar year for which
the claim is filed. 'Household income' includes payments received
by the taxpayer or the spouse of the taxpayer under the federal
Social Security Act for the benefit of a minor child or minor
children who are members of the household.
(7) 'Income' means 'adjusted gross income' as defined in the
federal Internal Revenue Code, as amended and in effect on
December 31, { - 1998 - } { + 2000 + }, even { - where - }
{ + when + } the amendments take effect or become operative
after that date, relating to the measurement of taxable income of
individuals, estates and trusts, with the following
modifications:
(a) There shall be added to adjusted gross income the following
items of otherwise exempt income:
(A) The gross amount of any otherwise exempt pension less
return of investment, if any.
(B) Child support received by the taxpayer.
(C) Inheritances.
(D) Gifts and grants, the sum of which are in excess of $500
per year.
(E) Amounts received by a taxpayer or spouse of a taxpayer for
support from a parent who is not a member of the taxpayer's
household.
(F) Life insurance proceeds.
(G) Accident and health insurance proceeds, except
reimbursement of incurred medical expenses.
(H) Personal injury damages.
(I) Sick pay which is not included in federal adjusted gross
income.
(J) Strike benefits excluded from federal gross income.
(K) Worker's compensation, except for reimbursement of medical
expense.
(L) Military pay and benefits.
(M) Veteran's benefits.
(N) Payments received under the federal Social Security Act
which are excluded from federal gross income.
(O) Welfare payments, except as follows:
(i) Payments for medical care, drugs and medical supplies, if
the payments are not made directly to the welfare recipient;
(ii) In-home services authorized and approved by the Department
of Human Services, or by any of its divisions; and
(iii) Direct or indirect reimbursement of expenses paid or
incurred for participation in work or training programs.
(P) Nontaxable dividends.
(Q) Nontaxable interest not included in federal adjusted gross
income.
(R) Rental allowance paid to a minister that is excluded from
federal gross income.
(S) Income from sources without the United States that is
excluded from federal gross income.
(b) Adjusted gross income shall be increased due to the
disallowance of the following deductions:
(A) The amount of the net loss, in excess of $1,000, from all
dispositions of tangible or intangible properties.
(B) The amount of the net loss, in excess of $1,000, from the
operation of a farm or farms.
(C) The amount of the net loss, in excess of $1,000, from all
operations of a trade or business, profession or other activity
entered into for the production or collection of income.
(D) The amount of the net loss, in excess of $1,000, from
tangible or intangible property held for the production of rents,
royalties or other income.
(E) The amount of any net operating loss carryovers or
carrybacks included in federal adjusted gross income.
(F) The amount, in excess of $5,000, of the combined deductions
or other allowances for depreciation, amortization or depletion.
(G) The amount added or subtracted, as required within the
context of this section, for adjustments made under ORS 316.680
(2)(d) and 316.707 to 316.737.
(c) 'Income' does not include any of the following:
(A) Any governmental grant which must be used by the taxpayer
for rehabilitation of the homestead of the taxpayer.
(B) The amount of any payments made pursuant to ORS 310.630 to
310.706.
(C) Any refund of Oregon personal income taxes that were
imposed under ORS chapter 316.
(8) 'Contract rent' means rental paid to the landlord for the
right to occupy a homestead, including the right to use the
personal property located therein. 'Contract rent' does not
include rental paid for the right to occupy a homestead that is
exempt from taxation, unless payments in lieu of taxes of 10
percent or more of the rental exclusive of fuel and utilities are
made on behalf of the homestead. 'Contract rent' does not include
advanced rental payments for another period and rental deposits,
whether or not expressly set out in the rental agreement, or
payments made to a nonprofit home for the elderly described in
ORS 307.375. If a landlord and tenant have not dealt with each
other at arm's length, and the department is satisfied that the
contract rent charged was excessive, it may adjust the contract
rent to a reasonable amount for purposes of ORS 310.630 to
310.706.
(9) 'Statement of gross rent' means a declaration by the
applicant, under penalties of false swearing, that the amount of
contract rent and fuel and utility payments designated is the
actual amount both incurred and paid during the year for which
elderly rental assistance is claimed.
(10) 'Taxpayer' means an individual who is a resident of this
state on December 31 of the year for which elderly rental
assistance is claimed and whose homestead, as of the same
December 31 and during all or a portion of the year ending on the
same December 31, is rented and while rented is the subject,
directly or indirectly, of property tax levied by this state or a
political subdivision or of payments made in lieu of taxes.
SECTION 30. ORS 310.800 is amended to read:
310.800. (1) As used in this section:
(a) 'Authorized representative' means a senior citizen who is
authorized by a tax-exempt entity to perform charitable or public
service on behalf of a senior citizen who has entered into a
contract under subsection (2) of this section.
(b) 'Homestead' means an owner-occupied principal residence.
(c) 'Senior citizen' means a person who is 60 years of age or
older.
(d) 'Tax-exempt entity' means an entity that is exempt from
federal income taxes under section 501 (c) of the Internal
Revenue Code, as amended and in effect on December 31,
{ - 1998 - } { + 2000 + }.
(e) 'Taxing unit' means any county, city or common or union
high school district, community college service district or
community college district within this state with authority to
impose ad valorem property taxes.
(2) A tax-exempt entity may establish a property tax work-off
program pursuant to which a senior citizen may contract to
perform charitable or public service in consideration of payment
of property taxes extended against the homestead of the senior
citizen and billed to the senior citizen. For purposes of ORS
chapters 316 and 656, and notwithstanding ORS 670.600 or other
law, a senior citizen who enters into a contract under this
subsection shall be considered an independent contractor and not
a worker or employee with respect to the services performed
pursuant to the contract. Nothing in this section precludes a
taxing unit from being considered an employer, for purposes of
unemployment compensation under ORS chapter 657, of a senior
citizen who enters into a contract under this section.
(3) A taxing unit may enter into an agreement with a tax-exempt
entity that has established a property tax work-off program.
Pursuant to the agreement the taxing unit may accept, as
volunteer and public service, the services of a senior citizen
who has entered into a contract described in subsection (2) of
this section or an authorized representative.
(4) A taxing unit may provide funds or make grants to any
tax-exempt entity that has established a property tax work-off
program for use to carry out the program.
SECTION 31. ORS 311.689, as amended by section 7, chapter 1097,
Oregon Laws 1999, is amended to read:
311.689. (1) Notwithstanding ORS 311.668 or any other provision
of ORS 311.666 to 311.701, if the individual or, in the case of
two or more individuals electing to defer property taxes jointly,
all of the individuals together, or the spouse who has filed a
claim under ORS 311.688, has federal adjusted gross income that
exceeds $32,000 for the tax year that began in the previous
calendar year, then for the tax year next beginning, the amount
of taxes for which deferral is allowed shall be reduced by $0.50
for each dollar of federal adjusted gross income in excess of
$32,000.
(2) Prior to June 1 of each year, and notwithstanding ORS
314.835, the Department of Revenue shall review returns filed
under ORS chapter 314 and 316 to determine if subsection (1) of
this section is applicable for a homestead for the tax year next
beginning. If subsection (1) of this section is applicable, the
department shall notify by mail the taxpayer or spouse electing
deferral, and the taxes otherwise to be deferred for the tax year
next beginning shall be reduced as provided in subsection (1) of
this section or, if federal adjusted gross income in excess of
$32,000 exceeds the amount of property taxes by a factor of two,
the property taxes shall not be deferred.
(3) If the taxpayer or spouse does not file a return for
purposes of ORS chapters 314 and 316 and the department has
reason to believe that the federal adjusted gross income of the
taxpayer or spouse exceeds $32,000 for the tax year that began in
the previous calendar year, the department shall notify by mail
the taxpayer or spouse electing deferral. If, within 30 days
after the notice is mailed, the taxpayer or spouse does not file
a return under ORS chapter 314 or 316 or otherwise satisfy the
department that federal adjusted gross income does not exceed
$32,000, the department shall again notify the taxpayer or
spouse, and the taxes otherwise to be deferred for the tax year
next beginning shall not be deferred.
(4) For tax years beginning on or after July 1, 2002, the
federal adjusted gross income limit set forth in subsections (1)
to (3) of this section shall be recomputed by multiplying $32,000
by the indexing factor described in ORS 311.668 (7)(a)(A), and
rounding the amount so computed to the nearest multiple of $500.
(5) Nothing in this section shall affect the continued deferral
of taxes that have been deferred for tax years beginning prior to
the tax year next beginning or the right to deferral of taxes for
a tax year beginning after the tax year next beginning if
subsection (1) is not applicable for that tax year for the
homestead.
(6) As used in this section, 'federal adjusted gross income'
means federal adjusted gross income of the individual or, in the
case of two or more individuals electing to defer property tax
jointly, the combined federal adjusted gross income of the
individuals, or the federal adjusted gross income of the spouse
who has filed a claim under ORS 311.688, all as determined for
the tax year beginning in the calendar year prior to which a
determination is required under subsection (2) of this section.
' Federal adjusted gross income' shall be determined under the
Internal Revenue Code, as amended and in effect on December 31,
{ - 1998 - } { + 2000 + }, without any of the additions,
subtractions or other modifications or adjustments required under
ORS chapter 314 or 316.
(7)(a) If, after an initial determination under this section
has been made by the department, upon audit or examination or
otherwise, it is discovered that the taxpayer or spouse had
federal adjusted gross income in excess of the limitation
provided under subsection (1) of this section, the department
shall determine the amount of taxes deferred that should not have
been deferred and give notice to the taxpayer or spouse of the
amount of taxes that should not have been deferred. The
provisions of ORS chapters 305 and 314 shall apply to a
determination of the department under this section in the same
manner as those provisions are applicable to an income tax
deficiency. The amount of deferred taxes that should not have
been deferred shall bear interest from the date paid by the
department until paid at the rate established under ORS 305.220
for deficiencies. A deficiency shall not be assessed under this
section if notice required under this section is not given to the
taxpayer or spouse within three years after the date that the
department has paid the deferred taxes to the county. Upon
payment of the amount assessed as deficiency, and interest, the
department shall execute a release in the amount of the payment
and the release shall be conclusive evidence of the removal and
extinguishment of the lien under ORS 311.666 to 311.701 to the
extent of the payment.
(b) If, after an initial determination under this section has
been made by the department, upon claim for refund, audit or
examination or otherwise, it is discovered that the taxpayer or
spouse had federal adjusted gross income in the amount of or less
than the limitation provided under subsection (1) of this
section, the department shall determine the amount of taxes
deferred that should have been deferred and give notice to the
taxpayer or spouse of the amount of taxes that should have been
deferred. The provisions of ORS chapters 305 and 314 shall apply
to a determination of the department under this section in the
same manner as those provisions are applicable to an income tax
refund. The amount of the taxes that should have been deferred
shall bear interest from the date paid by the taxpayer to the
county at the rate established under ORS 305.220 for refunds
until paid. Claim for refund under this paragraph must be filed
within three years after the earliest date that the taxpayer or
spouse is notified by the department that the taxes are not
deferred.
(8) This section applies to all tax-deferred property,
notwithstanding that election to defer taxes is made under ORS
311.666 to 311.701 before or after October 3, 1989.
SECTION 32. ORS 314.011 is amended to read:
314.011. (1) As used in this chapter, unless the context
requires otherwise, 'department' means the Department of Revenue.
(2)(a) As used in this chapter, any term has the same meaning
as when used in a comparable context in the laws of the United
States relating to federal income taxes, unless a different
meaning is clearly required or the term is specifically defined
in this chapter.
(b) A reference to the laws of the United States or to the
Internal Revenue Code that relates to the definition of the
income on, in respect to or by which taxes imposed by ORS chapter
316, 317 or 318 are imposed or measured, refers to the laws of
the United States or the Internal Revenue Code as they are in
effect and applicable for the tax year of the taxpayer, except
where the Legislative Assembly has specifically provided
otherwise.
(c) With respect to ORS 314.105, 314.256 (relating to proxy tax
on lobbying expenditures), 314.260 (1)(b), 314.265 (1)(b),
314.302, 314.306, 314.330, 314.360, 314.362, 314.385, 314.402,
314.410, 314.412, 314.525, 314.742 (7), 314.750 and 314.752 and
other provisions of this chapter, except those described in
paragraph (b) of this subsection, any reference in this chapter
to the laws of the United States or to the Internal Revenue Code
means the laws of the United States relating to income taxes or
the Internal Revenue Code as they are amended on or before
December 31, { - 1998 - } { + 2000 + }, even { - where - }
{ + when + } the amendments take effect or become operative
after that date, except where the Legislative Assembly has
specifically provided otherwise.
(3) Insofar as is practicable in the administration of this
chapter, the department 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.
(4) When portions of the Internal Revenue Code incorporated by
reference as provided in subsection (2) of this section refer to
rules or regulations prescribed by the Secretary of the Treasury,
then such rules or regulations shall be regarded as rules adopted
by the department under and in accordance with the provisions of
this chapter, whenever they are prescribed or amended.
(5)(a) When portions of the Internal Revenue Code incorporated
by reference as provided in subsection (2) of this section are
later corrected by an Act or a Title within an Act of the United
States Congress designated as an Act or Title making technical
corrections, then notwithstanding the date that the Act or Title
becomes law, those portions of the Internal Revenue Code, as so
corrected, shall be the portions of the Internal Revenue Code
incorporated by reference as provided in subsection (2) of this
section and shall take effect, unless otherwise indicated by the
Act or Title (in which case the provisions shall take effect as
indicated in the Act or Title), as if originally included in the
provisions of the Act being technically corrected. If, on account
of this subsection, any adjustment is required to an Oregon
return that would otherwise be prevented by operation of law or
rule, the adjustment shall be made, notwithstanding any law or
rule to the contrary, in the manner provided under ORS 314.135.
(b) As used in this subsection, 'Act or Title' includes any
subtitle, division or other part of an Act or Title.
SECTION 33. ORS 314.525 is amended to read:
314.525. (1) An underpayment of estimated tax under ORS 314.505
to 314.525 will be considered to have occurred if the estimated
tax is not paid as required.
(2) Notwithstanding subsection (1) of this section, there shall
be no underpayment of estimated tax if the estimated tax paid
equals or exceeds the amount described in any one of the
following paragraphs:
(a) The amount which would be required to be paid if the
estimated tax liability were equal to 100 percent of the tax
shown on the return for the taxable year or, if no return was
filed, 100 percent of the tax for such taxable year.
(b) The amount which would be required to be paid if the
estimated tax liability were equal to 100 percent of the tax
shown on the return for the preceding taxable year, and the
preceding taxable year was a taxable year of 12 months.
(c)(A) An amount equal to 100 percent of the tax for the
taxable year computed by placing on an annualized basis the
taxable income:
(i) For the first three months of the taxable year, in the case
of the installment required to be paid in the fourth month;
(ii) For the first three months or for the first five months of
the taxable year, in the case of the installment required to be
paid in the sixth month;
(iii) For the first six months or for the first eight months of
the taxable year in the case of the installment required to be
paid in the ninth month; and
(iv) For the first nine months or for the first 11 months of
the taxable year, in the case of the installment required to be
paid in the 12th month of the taxable year.
(B) For purposes of this paragraph the taxable income shall be
placed on an annualized basis by:
(i) Multiplying by 12 the taxable income referred to in
subparagraph (A) of this paragraph; and
(ii) Dividing the resulting amount by the number of months in
the taxable year (3, 5, 6, 8, 9 or 11, as the case may be)
referred to in subparagraph (A) of this paragraph.
(d) An amount equal to 100 percent of the amount obtained by
applying section 6655(e) (3)(C) of the Internal Revenue Code to
Oregon taxable income.
(e) An election made under section 6655(e) (2)(C) of the
Internal Revenue Code (relating to annualization periods) for
federal tax purposes shall also apply for purposes of estimated
tax under ORS 314.505 to 314.525.
(3) Interest shall accrue on the underpayment of estimated tax
under ORS 314.505 to 314.525 at the rate established under ORS
305.220, for each month or fraction thereof during which period
the estimated tax or any installment thereof remains unpaid. The
penalty provisions contained in this chapter and ORS chapters 317
and 318 for underpayment of tax shall not apply to underpayments
of estimated tax under ORS 314.505 to 314.525.
(4) For purposes of subsection (3) of this section, the
underpayment of estimated tax shall be the excess of:
(a) The amount of the installment which would be required to be
paid if the estimated tax were equal to { - 100 percent of the
tax shown on the return for the taxable year or, if no return was
filed, 100 percent of the tax for such year - } { + the lowest
of the payments required under subsection (2) of this section
(and allowed to be made by the taxpayer under subsection (5) of
this section) + }, over
(b) The amount, if any, of the installment paid on or before
the last date prescribed for payment.
(5) In the case of a large corporation, subsection (2)(b) of
this section shall apply only to determine the amount of the
first required installment for any taxable year. Any reduction in
the first installment by reason of this subsection shall be added
to the amount of the next required installment determined without
regard to subsection (2)(b) of this section. For purposes of this
subsection, a 'large corporation' is any corporation that had
federal taxable income, determined without regard to any amount
carried to any of the three taxable years under section 172 or
1212(a) of the Internal Revenue Code, of $1 million or more in
any of the three taxable years immediately preceding the taxable
year involved.
(6) The application of this section to taxable years of less
than 12 months shall be in accordance with rules adopted by the
Department of Revenue.
SECTION 34. ORS 315.004 is amended to read:
315.004. (1) Except when the context requires otherwise, the
definitions contained in ORS chapters 314, 316, 317 and 318 are
applicable in the construction, interpretation and application of
the personal and corporate income and excise tax credits
contained in this chapter.
(2)(a) For purposes of the tax credits contained in this
chapter, any term has the same meaning as when used in a
comparable context in the laws of the United States relating to
federal income taxes, unless a different meaning is clearly
required or the term is specifically defined for purposes of
construing, interpreting and applying the credit.
(b) With respect to the tax credits contained in this chapter,
any reference to the laws of the United States or to the Internal
Revenue Code means the laws of the United States relating to
income taxes or the Internal Revenue Code as they are amended on
or before December 31, { - 1998 - } { + 2000 + }, even
{ - where - } { + when + } the amendments take effect or
become operative after that date.
(3) 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.
(4) When portions of the Internal Revenue Code incorporated by
reference as provided in subsection (2) of this section refer to
rules or regulations prescribed by the Secretary of the Treasury,
then such rules or regulations shall be regarded as rules adopted
by the department under and in accordance with the provisions of
this chapter, whenever they are prescribed or amended.
(5)(a) When portions of the Internal Revenue Code incorporated
by reference as provided in subsection (2) of this section are
later corrected by an Act or a Title within an Act of the United
States Congress designated as an Act or Title making technical
corrections, then notwithstanding the date that the Act or Title
becomes law, those portions of the Internal Revenue Code, as so
corrected, shall be the portions of the Internal Revenue Code
incorporated by reference as provided in subsection (2) of this
section and shall take effect, unless otherwise indicated by the
Act or Title (in which case the provisions shall take effect as
indicated in the Act or Title), as if originally included in the
provisions of the Act being technically corrected. If, on account
of this subsection, any adjustment is required to an Oregon
return that would otherwise be prevented by operation of law or
rule, the adjustment shall be made, notwithstanding any law or
rule to the contrary, in the manner provided under ORS 314.135.
(b) As used in this subsection, 'Act or Title' includes any
subtitle, division or other part of an Act or Title.
SECTION 35. ORS 316.012 is amended to read:
316.012. Any term used in this chapter has the same meaning as
when used in a comparable context in the laws of the United
States relating to federal income taxes, unless a different
meaning is clearly required or the term is specifically defined
in this chapter. Any reference in this chapter to the laws of the
United States or to the Internal Revenue Code means:
(1) In the case of a reference relating to the definition of
the income on, in respect to or by which the tax imposed by this
chapter is imposed or measured, the laws of the United States
relating to income taxes or the Internal Revenue Code as they are
in effect and applicable for the tax year of the taxpayer, except
where the Legislative Assembly has specifically provided
otherwise; or
(2) In the case of a reference for any other purpose, as these
laws are amended and in effect on December 31, { - 1998 - }
{ + 2000 + }, except where the Legislative Assembly has
specifically provided otherwise.
SECTION 36. ORS 316.078 is amended to read:
316.078. (1) A resident individual shall be allowed a credit
against the tax otherwise due under this chapter in an amount
equal to a percentage of employment-related expenses allowable
pursuant to section 21 of the Internal Revenue Code { - as of
December 31, 1998 - } , notwithstanding the limitation imposed by
section 26 of the Internal Revenue Code { - as of December 31,
1998 - } . The percentage shall be determined on the basis of
federal taxable income, as defined in section 63 of the Internal
Revenue Code { - as of December 31, 1998, - } and as reflected
on the federal return, whether or not a joint return, of the
taxpayer for the taxable year, in accordance with the following
table:
_________________________________________________________________
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
If federal taxable
income is: The percentage is:
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
Not over $5,000......30%
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
Over $5,000 but not
over $10,000........15%
Over $10,000 but not
over $15,000........ 8%
Over $15,000 but not
over $25,000........ 6%
Over $25,000 but not
over $35,000........ 5%
Over $35,000 but not
over $45,000........ 4%
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
Over $45,000......... 0%
_________________________________________________________________
____________________________________________________________
END OF POSSIBLE IRREGULAR TABULAR TEXT
____________________________________________________________
(2) A nonresident individual shall be allowed the credit
computed in the same manner and subject to the same limitations
as the credit allowed a resident by subsection (1) of this
section. However, the credit shall be prorated using the
proportion provided in ORS 316.117.
(3) If a change in the taxable year of a taxpayer occurs as
described in ORS 314.085, or if the Department of Revenue
terminates the taxpayer's taxable year under ORS 314.440, the
credit allowed by this section shall be prorated or computed in a
manner consistent with ORS 314.085.
(4) If a change in the status of a taxpayer from resident to
nonresident or from nonresident to resident occurs, the credit
allowed by this section shall be determined in a manner
consistent with ORS 316.117.
(5) Any tax credit otherwise allowable under this section which
is not used by the taxpayer in a particular year may be carried
forward and offset against the taxpayer's tax liability for the
next succeeding tax year. Any credit remaining unused in such
next succeeding tax year may be carried forward and used in the
second succeeding tax year, and likewise any credit not used in
that second succeeding tax year may be carried forward and used
in the third succeeding tax year, and any credit not used in that
third succeeding tax year may be carried forward and used in the
fourth succeeding tax year, and any credit not used in that
fourth succeeding tax year may be carried forward and used in the
fifth succeeding tax year, but may not be carried forward for any
tax year thereafter.
SECTION 37. ORS 316.087 is amended to read:
316.087. (1) A resident individual shall be allowed a credit
against the tax otherwise due under this chapter in an amount
equal to 40 percent of the credit for the elderly or the
permanently and totally disabled allowable pursuant to section 22
of the Internal Revenue Code { - as of December 31, 1998 - } ,
notwithstanding the limitation imposed by section 26 of the
Internal Revenue Code { - as of December 31, 1998 - } .
(2) A nonresident individual shall be allowed the credit
computed in the same manner and subject to the same limitations
as the credit allowed a resident by subsection (1) of this
section. However, the credit shall be prorated using the
proportion provided in ORS 316.117.
(3) If a change in the taxable year of a taxpayer occurs as
described in ORS 314.085, or if the Department of Revenue
terminates the taxpayer's taxable year under ORS 314.440, the
credit allowed by this section shall be prorated or computed in a
manner consistent with ORS 314.085.
(4) If a change in the status of a taxpayer from resident to
nonresident or from nonresident to resident occurs, the credit
allowed by this section shall be determined in a manner
consistent with ORS 316.117.
(5) No credit shall be allowed under this section for the
taxable year if the taxpayer claims the credit allowed under ORS
316.157.
SECTION 38. ORS 316.153 is amended to read:
316.153. (1) As used in this section:
(a) 'Involuntary move' means a move forced on an owner due to
the termination of the owner's rental agreement for a facility
space resulting from the closure of the facility, or portion of
the facility, as defined in ORS 90.100.
(b) 'Mobile home' has the meaning given 'manufactured dwelling'
in ORS 446.003, and includes only a mobile home with a fair
market value of $50,000 or less on the date that the mobile home
is involuntarily moved.
(c) 'Qualified individual' means an individual who:
(A) Owns and occupies as a principal residence, on the date of
the involuntary move, a mobile home involuntarily moved; and
(B) Has a federal adjusted gross income, as described under ORS
316.013, of $30,000 or less for the tax year in which the mobile
home is involuntarily moved.
(2) A qualified individual is allowed a credit against the
taxes otherwise due under this chapter. The amount of the credit
is the lesser of:
(a) $1,500; or
(b) The actual cost of moving and setting up the mobile home
after subtracting any payments or reimbursements received by the
qualified individual under ORS 90.630 (6) and (7).
(3)(a) One-third of the total amount of credit allowed under
this section must be claimed by the qualified individual for the
tax year in which the mobile home is involuntarily moved and
one-third of the credit in each of the two tax years immediately
following.
(b) Any credit which is not used by the taxpayer in a
particular year may be carried forward and offset against the
taxpayer's tax liability for the next succeeding tax year. Any
credit remaining unused in the next succeeding tax year may be
carried forward and used in the second succeeding tax year, and
likewise any credit not used in that second succeeding tax year
may be carried forward and used in the third succeeding tax year,
and any credit not used in that third succeeding tax year may be
carried forward and used in the fourth succeeding tax year, and
any credit not used in that fourth succeeding tax year may be
carried forward and used in the fifth succeeding tax year, but
may not be carried forward for any tax year thereafter.
(c) The credit allowed to a qualified individual is available
for only one involuntary move of a mobile home.
(d) If the taxpayer is married at the close of the tax year,
the credit shall be allowed to only one taxpayer if the spouses
file separate returns for the tax year. Marital status shall be
determined as provided under section 21 (e)(3) and (4) of the
Internal Revenue Code { - , as amended and in effect on December
31, 1998 - } .
SECTION 39. ORS 316.157 is amended to read:
316.157. (1) In the case of an eligible individual, there shall
be allowed as a credit against the taxes otherwise due under this
chapter for the taxable year an amount equal to the lesser of the
tax liability of the taxpayer or nine percent of net pension
income.
(2) For purposes of this section:
(a) 'Eligible individual' means any individual who is receiving
pension income and who has attained the following age before the
close of the taxable year:
(A) For taxable years beginning on or after January 1, 1991,
and before January 1, 1993, the individual must attain 58 years
of age before the close of the taxable year.
(B) For taxable years beginning on or after January 1, 1993,
and before January 1, 1995, the individual must attain 59 years
of age before the close of the taxable year.
(C) For taxable years beginning on or after January 1, 1995,
and before January 1, 1997, the individual must attain 60 years
of age before the close of the taxable year.
(D) For taxable years beginning on or after January 1, 1997,
and before January 1, 1999, the individual must attain 61 years
of age before the close of the taxable year.
(E) For taxable years beginning on or after January 1, 1999,
the individual must attain 62 years of age before the close of
the taxable year.
(b) 'Household income' has that meaning given in ORS 310.630
except that 'household income' shall not include Social Security
benefits received by the taxpayer or the spouse of the taxpayer.
{ - (c) 'Internal Revenue Code' means the federal Internal
Revenue Code, as amended and in effect on December 31, 1998. - }
{ - (d) - } { + (c) + } 'Net pension income' means:
(A) For eligible individuals filing a joint return, the lesser
of the pension income of the eligible individuals received during
the taxable year or the excess, if any, of $15,000 over the sum
of the following amounts:
(i) Any Social Security benefits received by the eligible
individual, or by the spouse of the individual, during the
taxable year; and
(ii) The excess, if any, of household income over $30,000.
(B) For an eligible individual filing a return other than a
joint return, the lesser of the pension income of the eligible
individual received during the taxable year or the excess, if
any, of $7,500 over the sum of the following amounts:
(i) Any Social Security benefits received by the eligible
individual during the taxable year; and
(ii) The excess, if any, of household income over $15,000.
{ - (e) - } { + (d) + } 'Pension income' means income
included in Oregon taxable income from:
(A) Distributions from or pursuant to an employee pension
benefit plan, as defined in section 3(2) of the Employee
Retirement Income Security Act of 1974, which satisfies the
requirements of section 401 of the Internal Revenue Code;
(B) Distributions from or pursuant to a public retirement
system of this state or a political subdivision of this state, or
a public retirement system created by an Act of this state or a
political subdivision of this state, or the public retirement
system of any other state or local government;
(C) Distributions from or pursuant to a federal retirement
system created by the federal government for any officer or
employee of the United States, including any person retired from
service in the United States Civil Service, the Armed Forces of
the United States or any agency or subdivision thereof;
(D) Distributions or withdrawals from or pursuant to an
eligible deferred compensation plan which satisfies the
requirements of section 457 of the Internal Revenue Code;
(E) Distributions or withdrawals from or pursuant to an
individual retirement account, annuity or trust or simplified
employee pension which satisfies the requirements of section 408
of the Internal Revenue Code; and
(F) Distributions or withdrawals from or pursuant to an
employee annuity, including custodial accounts treated as
annuities, subject to section 403 (a) or (b) of the Internal
Revenue Code.
{ - (f) - } { + (e) + } 'Social Security benefits' means
Social Security benefits, as defined in section 86 of the
Internal Revenue Code (Title II Social Security or tier 1
railroad retirement benefits).
(3) If a change in the taxable year of the eligible individual
occurs as described in ORS 314.085, or if the Department of
Revenue terminates the tax year of the eligible individual under
ORS 314.440, the credit allowed by this section shall be prorated
or computed in a manner consistent with ORS 316.085.
(4) If a change in the status of the eligible individual from
resident to nonresident or from nonresident to resident occurs,
the credit allowed by this section shall be determined in a
manner consistent with subsection (1) of this section.
SECTION 40. ORS 316.162 is amended to read:
316.162. As used in ORS 316.162 to 316.212:
{ - (1) 'Internal Revenue Code' means the federal Internal
Revenue Code, as amended and in effect on December 31, 1998. - }
{ - (2) - } { + (1) + } 'Number of withholding exemptions
claimed' means the number of withholding exemptions claimed in a
withholding exemption certificate in effect under ORS 316.182,
except that if no such certificate is in effect, the number of
withholding exemptions claimed is considered to be zero.
{ - (3) - } { + (2) + } 'Wages' means remuneration for
services performed by an employee for an employer, including the
cash value of all remuneration paid in any medium other than
cash, except that ' wages' does not include remuneration paid:
(a) For active service in the Armed Forces of the United States
as to which no withholding is required by the Internal Revenue
Code.
(b) To an employee of a common carrier to the extent that 49
U.S.C. 14503 and 40116 prohibit the remuneration from withholding
for state income taxes.
(c) For domestic service in a private home, a local college
club or a local chapter of a college fraternity or sorority.
(d) For casual labor not in the course of the employer's trade
or business.
(e) To an employee whose services to the employer consist
solely of labor in connection with the planting, cultivating or
harvesting of seasonal agricultural crops if the total amount
paid to such employee is less than $300 annually.
(f) To seamen who are exempt from garnishment, attachment or
execution under title 46 of the United States Code.
(g) To persons temporarily employed as emergency forest fire
fighters.
(h) To employees' trusts exempt from tax under provisions of
the federal Internal Revenue Code.
(i) For services performed by a duly ordained, commissioned or
licensed minister of a church in the exercise of the minister's
ministry or by a member of a religious order in the exercise of
religious duties required by such order, which duties are not
commercial in nature.
(j) For services performed by an independent contractor, as
that term is defined in ORS 670.600.
(k) When the remuneration is exempt from taxation under this
chapter.
{ - (4) - } { + (3) + } 'Employer' means:
(a) A person who is in such relation to another person that the
person may control the work of that other person and direct the
manner in which it is to be done; or
(b) An officer or employee of a corporation, or a member or
employee of a partnership, who as such officer, employee or
member is under a duty to perform the acts required of employers
by ORS 316.167, 316.182, 316.197, 316.202 and 316.207.
SECTION 41. ORS 316.182 is amended to read:
316.182. (1) Subject to subsection (2) or (3) of this section
and if the employee does not claim a different number of
withholding exemptions for purposes of this chapter, an employer
shall use the exemption certificate filed by the employee with
the employer under the income tax withholding provisions of the
Internal Revenue Code for determining the number of withholding
exemptions to be used in computing the tax to be withheld under
ORS 316.167 and 316.172. If a new exemption certificate is not
filed as provided under section 1581 of the Tax Reform Act of
1986 (P.L. 99-514) for federal purposes, the employer shall use
the same number of withholding exemptions as used for purposes of
the Internal Revenue Code for determining the amount of tax to be
withheld under ORS 316.167 and 316.172.
(2) The Department of Revenue may require an exemption
certificate to be filed on a form prescribed by the department in
any circumstance where the department finds that an exemption
certificate filed for purposes of the Internal Revenue Code does
not properly reflect the number of withholding exemptions
allowable under this chapter.
(3) No exemption certificate need be procured from an employee
whose wages consist of wages as defined in ORS 316.162
{ - (3)(e) - } { + (2)(e) + }.
SECTION 42. ORS 316.207 is amended to read:
316.207. (1) Every employer who deducts and retains any amount
under ORS 316.162 to 316.212 shall hold the same in trust for the
State of Oregon and for the payment thereof to the Department of
Revenue in the manner and at the time provided in ORS 316.162 to
316.212.
(2) At any time the employer fails to remit any amount
withheld, the department may enforce collection by the issuance
of a distraint warrant for the collection of the delinquent
amount and all penalties, interest and collection charges accrued
thereon. Such warrant shall be issued, recorded and proceeded
upon in the same manner and shall have the same force and effect
as is prescribed with respect to warrants for the collection of
delinquent income taxes.
(3)(a) In the case of an employer that is assessed pursuant to
the provisions of ORS 305.265 (12) and 314.407 (1), the
department may issue a notice of liability to any officer,
employee or member described in ORS 316.162 { - (4)(b) - }
{ + (3)(b) + } of such employer within three years from the time
of assessment. Within 30 days from the date the notice of
liability is mailed to the officer, employee or member, such
officer, employee or member shall pay the assessment, plus
penalties and interest, or advise the department in writing of
objections to the liability and, if desired, request a
conference. Any conference shall be governed by the provisions of
ORS 305.265 pertaining to a conference requested from a notice of
deficiency.
(b) After a conference or, if no conference is requested, a
determination of the issues considering the written objections,
the department shall mail the officer, employee or member a
conference letter affirming, canceling or adjusting the notice of
liability. Within 90 days from the date the conference letter is
mailed to the officer, employee or member, such officer, employee
or member shall pay the assessment, plus penalties and interest,
or appeal to the tax court in the manner provided for an appeal
from a notice of assessment.
(c) If neither payment nor written objection to the notice of
liability is received by the department within 30 days after the
notice of liability has been mailed, the notice of liability
becomes final. In such event, the officer, employee or member may
appeal the notice of liability to the tax court within 90 days
after it became final in the manner provided for an appeal from a
notice of assessment.
(4)(a) In the case of a failure to file a withholding tax
report on the due date, governed by the provisions of ORS 305.265
(10) and 314.400, the department, in addition to the provisions
of ORS 305.265 (10) and 314.400, may send notices of
determination and assessment to any officer, employee or member
described in ORS 316.162 { - (4)(b) - } { + (3)(b) + } any
time within three years after the assessment of an employer
described in ORS 316.162 { - (4)(a) - } { + (3)(a) + }. The
time of assessment against such officer, employee or member shall
be 30 days after the date the notice of determination and
assessment is mailed. Within 30 days from the date the notice of
determination and assessment is mailed to the officer, employee
or member, such officer, employee or member shall pay the
assessment, plus penalties and interest, or advise the department
in writing of objections to the assessment, and if desired,
request a conference. Any conference shall be governed by the
provisions of ORS 305.265 pertaining to a conference requested
from a notice of deficiency.
(b) After a conference or, if no conference is requested, a
determination of the issues considering the written objections,
the department shall mail the officer, employee or member a
conference letter affirming, canceling or adjusting the notice of
determination and assessment. Within 90 days from the date the
conference letter is mailed to the officer, employee or member,
such officer, employee or member shall pay the assessment, plus
penalties and interest, or appeal in the manner provided for an
appeal from a notice of assessment.
(c) If neither payment nor written objection to the notice of
determination and assessment is received by the department within
30 days after the notice of determination and assessment has been
mailed, the notice of determination and assessment becomes final.
In such event, the officer, employee or member may appeal the
notice of determination and assessment to the tax court within 90
days after it became final in the manner provided for an appeal
from a notice of assessment.
(5)(a) More than one officer or employee of a corporation may
be held jointly and severally liable for payment of withheld
taxes.
(b) Notwithstanding the provisions of ORS 314.835, 314.840 or
314.991, if more than one officer or employee of a corporation
may be held jointly and severally liable for payment of withheld
taxes, the department may require any or all of the officers,
members or employees who may be held liable to appear before the
department for a joint determination of liability. The department
shall notify each officer, member or employee of the time and
place set for the determination of liability.
(c) Each person notified of a joint determination under this
subsection shall appear and present such information as is
necessary to establish that person's liability or nonliability
for payment of withheld taxes to the department. If any person
notified fails to appear, the department shall make its
determination on the basis of all the information and evidence
presented. The department's determination shall be binding on all
persons notified and required to appear under this subsection.
(d) If an appeal is taken to the Oregon Tax Court pursuant to
ORS 305.404 to 305.560 by any person determined to be liable for
unpaid withholding taxes under this subsection, each person
required to appear before the department under this subsection
shall be impleaded by the plaintiff and made a party to the
action before the tax court and shall make available to the tax
court such information as was presented before the department, as
well as such other information as may be presented to the court.
If any person required to appear before the court under this
subsection fails or refuses to appear or bring such information
in part or in whole, or is outside the jurisdiction of the tax
court, the court shall make its determination on the basis of all
the evidence introduced. All such evidence shall constitute a
public record and shall be available to the parties and the court
notwithstanding ORS 314.835, 314.840 or 314.991. The
determination of the tax court shall be binding on all persons
made parties to the action under this subsection.
(e) Nothing in this section shall be construed to preclude a
determination by the department or the Oregon Tax Court that more
than one officer, employee or member are jointly and severally
liable for unpaid withholding taxes.
SECTION 43. ORS 316.298 is amended to read:
316.298. (1) A resident beneficiary of a trust whose adjusted
gross income includes all or part of an accumulation distribution
by such trust, as defined in section 665 of the Internal Revenue
Code, shall be allowed a credit against the tax otherwise due
under this chapter for all or a proportionate part of any tax,
paid by the trust under this chapter for any preceding taxable
year, that would not have been payable if the trust had in fact
made distribution to its beneficiaries at the times and in the
amounts specified in section 666 of the Internal Revenue Code.
(2) The credit under this section shall not reduce the tax
otherwise due from the beneficiary under this chapter to an
amount less than would have been due if the accumulation
distribution or part thereof were excluded from the adjusted
gross income of the beneficiary.
{ - (3) As used in this section and ORS 316.317, 'Internal
Revenue Code' means the federal Internal Revenue Code as amended
and in effect on December 31, 1998. - }
SECTION 44. ORS 316.557 is amended to read:
316.557. As used in ORS 316.557 to 316.589 { + , + } { - : - }
{ - (1) - } 'estimated tax' means the amount of income tax
imposed under this chapter for the taxable year, as estimated by
the individual, minus the sum of any credits as estimated by the
individual against tax provided by this chapter.
{ - (2) 'Internal Revenue Code' means the federal Internal
Revenue Code, as amended and in effect on December 31, 1998. - }
SECTION 45. ORS 316.563 is amended to read:
316.563. (1) Except as provided in subsection (2) of this
section, every individual shall declare an estimated tax for the
taxable year if:
(a) The gross income for the taxable year can be reasonably
expected to include more than $1,000 from sources other than
wages as defined in ORS 316.162 { - (3) - } { + (2) + }; or
(b) The gross income for the taxable year can be reasonably
expected to exceed:
(A) $20,000 in the case of:
(i) A single individual, including a head of household as
defined in section 2 (b) of the Internal Revenue Code, or a
surviving spouse as defined in section 2 (a) of the Internal
Revenue Code; or
(ii) A married individual entitled under ORS 316.567 to file a
joint declaration with a spouse, but only if the spouse has not
received wages, as defined in ORS 316.162 { - (3) - }
{ + (2) + } for the taxable year; or
(B) $10,000 in the case of a married individual entitled under
ORS 316.567 to file a joint declaration with a spouse, but only
if each spouse has received wages as defined in ORS 316.162
{ - (3) - } { + (2) + } for the taxable year; or
(C) $5,000 in the case of a married individual not entitled
under ORS 316.567 to file a joint declaration with a spouse.
(2) No declaration is required if the estimated tax as defined
in ORS 316.557 is less than the amount established by rule of the
Department of Revenue. The department shall consider the
provisions of section 6654 of the Internal Revenue Code in
determining the amount.
(3) An individual with a taxable year of less than 12 months
shall make a declaration in accordance with rules adopted by the
Department of Revenue.
(4) An individual may amend the declaration filed during the
taxable year under rules prescribed by the department.
(5) The declaration shall contain information required by the
department by rule.
SECTION 46. ORS 317.010 is amended to read:
317.010. As used in this chapter, unless the context requires
otherwise:
(1) 'Centrally assessed corporation' means every corporation
the property of which is assessed by the Department of Revenue
under ORS 308.505 to 308.665.
(2) 'Department' means the Department of Revenue.
(3)(a) 'Consolidated federal return' means the return permitted
or required to be filed by a group of affiliated corporations
under section 1501 of the Internal Revenue Code.
(b) 'Consolidated state return' means the return required to be
filed under ORS 317.710 (5).
(4) 'Doing business' means any transaction or transactions in
the course of its activities conducted within the state by a
national banking association, or any other corporation; provided,
however, that a foreign corporation whose activities in this
state are confined to purchases of personal property, and the
storage thereof incident to shipment outside the state, shall not
be deemed to be doing business unless such foreign corporation is
an affiliate of another foreign or domestic corporation which is
doing business in Oregon. Whether or not corporations are
affiliated shall be determined as provided in section 1504 of the
Internal Revenue Code.
(5) 'Excise tax' means a tax measured by or according to net
income imposed upon national banking associations, all other
banks, and financial, centrally assessed, mercantile,
manufacturing and business corporations for the privilege of
carrying on or doing business in this state.
(6) 'Financial institution' or 'financial corporation ' means a
bank or trust company organized under ORS chapter 707, national
banking association or production credit association organized
under federal statute, building and loan association, savings and
loan association, mutual savings bank, and any other corporation
whose principal business is in direct competition with national
and state banks.
(7) 'Internal Revenue Code' means:
(a) In the case of a reference relating to the definition of
the income on, in respect to or by which the tax imposed by this
chapter is imposed or measured, the laws of the United States
relating to income taxes as they are in effect and applicable for
the tax year of the taxpayer; or
(b) In the case of a reference for any other purpose, the laws
of the United States relating to income taxes as they are amended
and in effect on December 31, { - 1998 - } { + 2000 + },
except where the Legislative Assembly has specifically provided
otherwise.
(8) 'Oregon taxable income' means taxable income, less the
deduction allowed under ORS 317.476, except as otherwise provided
with respect to insurers in subsection (11) of this section and
ORS 317.650 to 317.665.
(9) 'Oregon net loss' means taxable loss, except as otherwise
provided with respect to insurers in subsection (11) of this
section and ORS 317.650 to 317.665.
(10) 'Taxable income or loss' means the taxable income or loss
determined, or in the case of a corporation for which no federal
taxable income or loss is determined, as would be determined,
under chapter 1, Subtitle A of the Internal Revenue Code and any
other laws of the United States relating to the determination of
taxable income or loss of corporate taxpayers, with the
additions, subtractions, adjustments and other modifications as
are specifically prescribed by this chapter except that in
determining taxable income or loss for any year, no deduction
under ORS 317.476 or 317.478 and section 45b, chapter 293, Oregon
Laws 1987, shall be allowed. If the corporation is a corporation
to which ORS 314.280 or 314.605 to 314.675 (requiring or
permitting apportionment of income from transactions or
activities carried on both within and without the state) applies,
to derive taxable income or loss, the following shall occur:
(a) From the amount otherwise determined under this subsection,
subtract nonbusiness income, or add nonbusiness loss, whichever
is applicable.
(b) Multiply the amount determined under paragraph (a) of this
subsection by the Oregon apportionment percentage defined under
ORS 314.280, 314.650 or 314.670, whichever is applicable. The
resulting product shall be Oregon apportioned income or loss.
(c) To the amount determined as Oregon apportioned income or
loss under paragraph (b) of this subsection, add nonbusiness
income allocable entirely to Oregon under ORS 314.280 or 314.625
to 314.645, or subtract nonbusiness loss allocable entirely to
Oregon under ORS 314.280 or 314.625 to 314.645. The resulting
figure is 'taxable income or loss' for those corporations
carrying on taxable transactions or activities both within and
without Oregon.
(11) As used in ORS 317.122 and 317.650 to 317.665, ' insurer'
means any domestic, foreign or alien insurer as defined in ORS
731.082 and any interinsurance and reciprocal exchange and its
attorney in fact with respect to its attorney in fact net income
as a corporate attorney in fact acting as attorney in compliance
with ORS 731.458, 731.462, 731.466 and 731.470 for the reciprocal
or interinsurance exchange. However, 'insurer' does not include
title insurers or health care service contractors operating
pursuant to ORS 750.005 to 750.095.
SECTION 47. ORS 317.097 is amended to read:
317.097. (1) A credit against taxes otherwise due under this
chapter for the taxable year shall be allowed to a lending
institution in an amount equal to the difference between:
(a) The amount of finance charge charged by the lending
institution during the taxable year at an annual rate less than
the market rate for a loan that is made before January 1, 2010,
that complies with the requirements of this section; and
(b) The amount of finance charge that would have been charged
during the taxable year by the lending institution for the loan
for housing construction, development or rehabilitation measured
at the annual rate charged by the lending institution for
nonsubsidized loans made under like terms and conditions at the
time the loan for housing construction, development or
rehabilitation is made.
(2) The maximum difference between the amounts described in
subsection (1)(a) and (b) of this section shall not exceed four
percent of the average unpaid balance of the loan during the tax
year for which the credit is claimed.
(3) Any tax credit otherwise allowable under this section that
is not used by the taxpayer in a particular year may be carried
forward and offset against the taxpayer's tax liability for the
next succeeding tax year. Any credit remaining unused in such
next succeeding tax year may be carried forward and used in the
second succeeding tax year, and likewise, any credit not used in
that second succeeding tax year may be carried forward and used
in the third succeeding tax year, and any credit not used in that
third succeeding tax year may be carried forward and used in the
fourth succeeding tax year, and any credit not used in that
fourth succeeding tax year may be carried forward and used in the
fifth succeeding tax year, but may not be carried forward for any
tax year thereafter.
(4) In order to be eligible for the tax credit allowed under
subsection (1) of this section, the loan shall be:
(a) Made to an individual or individuals who own the dwelling,
participate in an owner-occupied community rehabilitation program
and are certified by the local government or its designated agent
as having an income level at the time the loan is made of less
than 80 percent of the area median income; or
(b)(A) Made to a qualified borrower;
(B) Used to finance construction, rehabilitation or development
of housing; and
(C) Accompanied by a written certification by the Housing and
Community Services Department that the:
(i) Housing created by the loan is or will be occupied by
households earning less than 80 percent of the area median
income; and
(ii) Full amount of savings from the reduced interest rate
provided by the lending institution is or will be passed on to
the tenants in the form of reduced housing payments, regardless
of other subsidies provided to the housing project.
(5) A loan made to refinance a loan that meets the criteria
stated in subsection (4) of this section shall be treated the
same as a loan that meets the criteria stated in subsection (4)
of this section.
(6) In order to be eligible for the tax credit allowed under
subsection (1) of this section, the loan also shall be
accompanied by a written certification by the Housing and
Community Services Department that:
(a) Specifies the period, as determined by the Housing and
Community Services Department, during which the loan is eligible
for the tax credit under subsection (1) of this section; and
(b) States that the loan is within the limitation imposed by
subsection (7) of this section.
(7)(a) The Housing and Community Services Department may
certify loans that are eligible under subsection (4) of this
section if the total credits attributable to all loans eligible
for credits under subsection (1) of this section and then
outstanding do not exceed $5 million for any year. In making loan
certifications, the Housing and Community Services Department
shall attempt to distribute the tax credits statewide, but shall
concentrate the tax credits in those areas of the state that are
determined by the State Housing Council to have the greatest need
for affordable housing.
(b) The certification under subsection (6) of this section
shall state the period for which the credit will be allowed,
which shall not exceed 20 years.
(8) The credit allowed in this section shall not be affected by
the applicant's receipt of a credit under section 42 of the
Internal Revenue Code (low-income housing tax credit program).
(9) A loan meeting the requirements of subsections (4) and (6)
of this section may be sold to a qualified assignee with or
without the lending institution's retaining servicing of the loan
so long as a designated lending institution maintains records
annually verified by a loan servicer that establish the amount of
tax credit earned by the taxpayer throughout each year of
eligibility.
(10) As used in this section:
(a) 'Annual rate' means the yearly interest rate specified on
the note, and not the annual percentage rate, if any, disclosed
to the applicant to comply with the federal Truth in Lending Act.
(b) 'Finance charge' means the total of all interests, loan
fees and other charges related to the cost of obtaining credit
and includes any interest on any loan fees financed by the
lending institution.
{ - (c) 'Internal Revenue Code' means the federal Internal
Revenue Code, as amended and in effect on December 31, 1998. - }
{ - (d) - } { + (c) + } 'Lending institution' means any
insured institution, as that term is defined in ORS 706.008, or
any mortgage banking company that maintains an office in this
state. ' Lending institution' also includes any community
development corporation that is organized under the Oregon
Nonprofit Corporation Law.
{ - (e) - } { + (d) + } 'Qualified assignee' means any
investor participating in the secondary market for real estate
loans.
{ - (f) - } { + (e) + } 'Qualified borrower' means any
borrower that is a sponsoring entity that has a controlling
interest in the real property that is financed by the loan
described in subsection (4) of this section. Such a controlling
interest includes, but is not limited to, a controlling interest
in the general partner of a limited partnership that owns the
real property.
{ - (g) - } { + (f) + } 'Sponsoring entity' means a
nonprofit corporation, state governmental entity, local unit of
government as defined in ORS 466.706, housing authority or any
person as defined in ORS 174.100, including, but not limited to,
an employer making housing available to low-income employees and
other low-income persons, provided that the person has agreed to
restrictive covenants imposed by a nonprofit corporation, state
governmental entity, local unit of government or housing
authority.
(11) Notwithstanding any other provision of law, a lending
institution that is a community development corporation organized
under the Oregon Nonprofit Corporation Law may transfer any part
or all of any tax credit arising under subsection (1) of this
section to one or more other lending institutions that are
stockholders or members of the community development corporation
or that otherwise participate through the community development
corporation in the making of one or more loans that generate the
tax credit under subsection (1) of this section.
(12) The lending institution shall file an annual statement
with the Housing and Community Services Department, specifying
that it has conformed with all requirements imposed by law to
qualify for this tax credit.
(13) The Housing and Community Services Department and the
Department of Revenue may adopt rules to carry out the provisions
of this section.
SECTION 48. ORS 317.097, as amended by section 4, chapter 857,
Oregon Laws 1999, is amended to read:
317.097. (1) A credit against taxes otherwise due under this
chapter for the taxable year shall be allowed to a lending
institution in an amount equal to the difference between:
(a) The amount of finance charge charged by the lending
institution during the taxable year at an annual rate less than
the market rate for a loan that is made before January 1, 2010,
that complies with the requirements of this section; and
(b) The amount of finance charge that would have been charged
during the taxable year by the lending institution for the loan
for housing construction, development or rehabilitation measured
at the annual rate charged by the lending institution for
nonsubsidized loans made under like terms and conditions at the
time the loan for housing construction, development or
rehabilitation is made.
(2) The maximum difference between the amounts described in
subsection (1)(a) and (b) of this section shall not exceed four
percent of the average unpaid balance of the loan during the tax
year for which the credit is claimed.
(3) Any tax credit otherwise allowable under this section that
is not used by the taxpayer in a particular year may be carried
forward and offset against the taxpayer's tax liability for the
next succeeding tax year. Any credit remaining unused in such
next succeeding tax year may be carried forward and used in the
second succeeding tax year, and likewise, any credit not used in
that second succeeding tax year may be carried forward and used
in the third succeeding tax year, and any credit not used in that
third succeeding tax year may be carried forward and used in the
fourth succeeding tax year, and any credit not used in that
fourth succeeding tax year may be carried forward and used in the
fifth succeeding tax year, but may not be carried forward for any
tax year thereafter.
(4) In order to be eligible for the tax credit allowed under
subsection (1) of this section, the loan shall be:
(a) Made to an individual or individuals who own the dwelling,
participate in an owner-occupied community rehabilitation program
and are certified by the local government or its designated agent
as having an income level at the time the loan is made of less
than 80 percent of the area median income; or
(b)(A) Made to a qualified borrower;
(B) Used to finance construction, rehabilitation or development
of housing; and
(C) Accompanied by a written certification by the Housing and
Community Services Department that the:
(i) Housing created by the loan is or will be occupied by
households earning less than 80 percent of the area median
income; and
(ii) Full amount of savings from the reduced interest rate
provided by the lending institution is or will be passed on to
the tenants in the form of reduced housing payments, regardless
of other subsidies provided to the housing project.
(5) A loan made to refinance a loan that meets the criteria
stated in subsection (4) of this section shall be treated the
same as a loan that meets the criteria stated in subsection (4)
of this section.
(6) In order to be eligible for the tax credit allowed under
subsection (1) of this section, the loan also shall be
accompanied by a written certification by the Housing and
Community Services Department that:
(a) Specifies the period, as determined by the Housing and
Community Services Department, during which the loan is eligible
for the tax credit under subsection (1) of this section; and
(b) States that the loan is within the limitation imposed by
subsection (7) of this section.
(7)(a) The Housing and Community Services Department may
certify loans that are eligible under subsection (4) of this
section if the total credits attributable to all loans eligible
for credits under subsection (1) of this section and then
outstanding do not exceed $6 million for any year. In making loan
certifications, the Housing and Community Services Department
shall attempt to distribute the tax credits statewide, but shall
concentrate the tax credits in those areas of the state that are
determined by the State Housing Council to have the greatest need
for affordable housing.
(b) The certification under subsection (6) of this section
shall state the period for which the credit will be allowed,
which shall not exceed 20 years.
(8) The credit allowed in this section shall not be affected by
the applicant's receipt of a credit under section 42 of the
Internal Revenue Code (low-income housing tax credit program).
(9) A loan meeting the requirements of subsections (4) and (6)
of this section may be sold to a qualified assignee with or
without the lending institution's retaining servicing of the loan
so long as a designated lending institution maintains records
annually verified by a loan servicer that establish the amount of
tax credit earned by the taxpayer throughout each year of
eligibility.
(10) As used in this section:
(a) 'Annual rate' means the yearly interest rate specified on
the note, and not the annual percentage rate, if any, disclosed
to the applicant to comply with the federal Truth in Lending Act.
(b) 'Finance charge' means the total of all interests, loan
fees and other charges related to the cost of obtaining credit
and includes any interest on any loan fees financed by the
lending institution.
{ - (c) 'Internal Revenue Code' means the federal Internal
Revenue Code, as amended and in effect on December 31, 1998. - }
{ - (d) - } { + (c) + } 'Lending institution' means any
insured institution, as that term is defined in ORS 706.008, or
any mortgage banking company that maintains an office in this
state. ' Lending institution' also includes any community
development corporation that is organized under the Oregon
Nonprofit Corporation Law.
{ - (e) - } { + (d) + } 'Qualified assignee' means any
investor participating in the secondary market for real estate
loans.
{ - (f) - } { + (e) + } 'Qualified borrower' means any
borrower that is a sponsoring entity that has a controlling
interest in the real property that is financed by the loan
described in subsection (4) of this section. Such a controlling
interest includes, but is not limited to, a controlling interest
in the general partner of a limited partnership that owns the
real property.
{ - (g) - } { + (f) + } 'Sponsoring entity' means a
nonprofit corporation, state governmental entity, local unit of
government as defined in ORS 466.706, housing authority or any
person as defined in ORS 174.100, including, but not limited to,
an employer making housing available to low-income employees and
other low-income persons, provided that the person has agreed to
restrictive covenants imposed by a nonprofit corporation, state
governmental entity, local unit of government or housing
authority.
(11) Notwithstanding any other provision of law, a lending
institution that is a community development corporation organized
under the Oregon Nonprofit Corporation Law may transfer any part
or all of any tax credit arising under subsection (1) of this
section to one or more other lending institutions that are
stockholders or members of the community development corporation
or that otherwise participate through the community development
corporation in the making of one or more loans that generate the
tax credit under subsection (1) of this section.
(12) The lending institution shall file an annual statement
with the Housing and Community Services Department, specifying
that it has conformed with all requirements imposed by law to
qualify for this tax credit.
(13) The Housing and Community Services Department and the
Department of Revenue may adopt rules to carry out the provisions
of this section.
SECTION 49. ORS 317.151 is amended to read:
317.151. (1) A credit is allowed against the taxes otherwise
due under this chapter. The amount of the credit shall equal 10
percent of the fair market value of certain qualified charitable
contributions, as described in this section.
(2) To qualify for the credit allowed under subsection (1) of
this section, the charitable contribution must:
(a) Be a charitable contribution of tangible personal property
described in section { - 1221(1) - } { + 1221(a)(1) + } of
the Internal Revenue Code that has as its original use, use by
the donee for education of students in this state, and that is a
computer or other scientific equipment or apparatus; and
(b) Be a charitable contribution made during the tax year for
which the credit is claimed to an educational organization that
is located in this state and that is:
(A) An institution of higher education described in section 170
(b)(1)(A)(ii) of the Internal Revenue Code; or
(B) A public educational institution offering instruction in
prekindergarten through grade 12 or any portion of that
instruction.
(3) Notwithstanding subsection (2) of this section, a
charitable contribution shall qualify for the credit allowed
under subsection (1) of this section, if:
(a) The charitable contribution would otherwise qualify for the
credit under subsection (2) of this section except that the
charitable contribution is of a contract or agreement for the
maintenance of the computer or other scientific equipment or
apparatus; or
(b) The charitable contribution is a contribution of moneys
made under a contract or agreement during the tax year for
scientific or engineering research to an educational organization
that is located in this state and that is:
(A) An institution of higher education described in section 170
(b)(1)(A)(ii) of the Internal Revenue Code; or
(B) A public educational institution offering instruction in
prekindergarten through grade 12 or any portion of that
instruction.
(4) The credit allowed under this section is in lieu of any
deduction otherwise allowable under this chapter. No deduction
shall be allowed under this chapter for any amount upon which the
credit allowed under this section is based. However, nothing in
this section shall affect the basis of the property in the hands
of the donee or any other taxpayer. The basis of the property in
the hands of the donee or other person shall be determined as if
this section did not exist.
(5)(a) Except as provided in paragraph (b) of this subsection,
the credit allowed under this section shall not exceed the tax
liability of the taxpayer and shall not be allowed against the
tax imposed under ORS 317.090. To qualify for a credit under this
section, the charitable contribution must be made without
consideration and be accepted by the donee institution or school.
(b) Any tax credit otherwise allowable under this section that
is not used by the taxpayer in a particular year may be carried
forward and offset against the taxpayer's tax liability for the
next succeeding tax year. Any credit remaining unused in that
next succeeding tax year may be carried forward and used in the
second succeeding tax year, and likewise any credit not used in
that second succeeding tax year may be carried forward and used
in the third succeeding tax year, and any credit not used in that
third succeeding tax year may be carried forward and used in the
fourth succeeding tax year, and any credit not used in that
fourth succeeding tax year may be carried forward and used in the
fifth succeeding tax year, but may not be carried forward for any
tax year thereafter.
(6) For purposes of this section, 'fair market value' shall be
determined at the time the property or services are contributed
and shall be substantiated by whatever information the Department
of Revenue requires. A requirement for substantiation may be
waived partially, conditionally or absolutely, as provided under
ORS 315.063.
{ - (7) As used in this section, 'Internal Revenue Code'
means the federal Internal Revenue Code, as amended and in effect
on December 31, 1998. - }
SECTION 50. ORS 317.152 is amended to read:
317.152. (1) A credit against taxes otherwise due under this
chapter shall be allowed to eligible taxpayers for increases in
qualified research expenses and basic research payments. The
credit shall be determined in accordance with section 41 of the
Internal Revenue Code, except as follows:
(a) The applicable percentage specified in section 41(a) of the
Internal Revenue Code shall be five percent.
(b) 'Qualified research' and 'basic research' shall consist of
research in the fields of advanced computing, advanced materials,
biotechnology, electronic device technology, environmental
technology or straw utilization, but only to the extent that such
research is conducted in Oregon.
(c) The following shall not apply to the credit allowable under
this section:
(A) Section 41(c)(4) of the Internal Revenue Code (relating to
the alternative incremental credit).
(B) Section 41(h) of the Internal Revenue Code (relating to
termination of the federal credit).
(2) As used in this section:
(a) 'Advanced computing' means leading edge technologies used
in the design and development of computing hardware and software.
This includes innovations in design of the full spectrum of
hardware from hand-held calculators to super computers, including
all peripheral equipment. It also includes innovations in design
and development software executing on all computing hardware for
any purpose.
(b) 'Advanced materials' means high value metals, new and
improved wood-based materials, composites and plastics.
(c) 'Biotechnology' means biochemistry, molecular biology,
genetics and engineering dealing with the transformation of
biological systems into useful processes and products.
(d) 'Electronic device technology' means the design and
development of electronic materials and devices such as advances
in integrated circuits and superconductivity.
(e) 'Environmental technology' means environmental assessment,
cleanup and alternative energy sources.
(f) 'Straw utilization' means innovations in the use of straw
and straw-based materials.
(3) For purposes of this section { + , + } { - : - }
{ - (a) - } 'eligible taxpayer' means a corporation, other
than corporations excluded under Internal Revenue Code section
41(e)(7)(E), that is engaged in research in the fields of
advanced computing, advanced materials, biotechnology, electronic
device technology or environmental technology.
{ - (b) 'Internal Revenue Code' means the Internal Revenue
Code as amended and in effect on December 31, 1998. - }
(4) The Income Tax Regulations as prescribed by the Secretary
of the Treasury under authority of section 41 of the Internal
Revenue Code shall also apply for purposes of this section,
except as modified by this section or as provided in rules
adopted by the Department of Revenue.
(5) The maximum credit under this section shall not exceed
$500,000.
(6) Any tax credit that is otherwise allowable under this
section and that is not used by the taxpayer in that year may be
carried forward and offset against the taxpayer's tax liability
for the next succeeding tax year. Any credit remaining unused in
such next succeeding tax year may be carried forward and used in
the second succeeding tax year, and likewise any credit not used
in that second succeeding tax year may be carried forward and
used in the third succeeding tax year, and any credit not used in
that third succeeding tax year may be carried forward and used in
the fourth succeeding tax year, and any credit not used in that
fourth succeeding tax year may be carried forward and used in the
fifth succeeding tax year, but may not be carried forward for any
tax year thereafter.
SECTION 51. ORS 317.154 is amended to read:
317.154. (1) A credit against taxes otherwise due under this
chapter shall be allowed for qualified research expenses that
exceed 10 percent of Oregon sales.
(2) For purposes of this section:
{ - (a) 'Internal Revenue Code' means the Internal Revenue
Code as defined in ORS 317.152. - }
{ - (b) - } { + (a) + } 'Oregon sales' shall be computed
using the laws and administrative rules for calculating the
numerator of the Oregon sales factor under ORS 314.665.
{ - (c) - } { + (b) + } 'Qualified research' has the
meaning given the term under section 41(d) of the Internal
Revenue Code and shall consist only of research in the fields of
advanced computing, advanced materials, biotechnology, electronic
device technology, environmental technology or straw utilization,
all as defined under ORS 317.152, but only to the extent that
such research is conducted in Oregon.
(3) The credit under this section is equal to five percent of
the amount by which the qualified research expenses exceed 10
percent of Oregon sales.
(4) The credit under this section shall not exceed $10,000
times the number of percentage points by which the qualifying
research expenses exceed 10 percent of Oregon sales.
(5) The maximum credit under this section shall not exceed
$500,000.
(6) Any tax credit that is otherwise allowable under this
section and that is not used by the taxpayer in that year may be
carried forward and offset against the taxpayer's tax liability
for the next succeeding tax year. Any credit remaining unused in
such next succeeding tax year may be carried forward and used in
the second succeeding tax year, and likewise any credit not used
in that second succeeding tax year may be carried forward and
used in the third succeeding tax year, and any credit not used in
that third succeeding tax year may be carried forward and used in
the fourth succeeding tax year, and any credit not used in that
fourth succeeding tax year may be carried forward and used in the
fifth succeeding tax year, but may not be carried forward for any
tax year thereafter.
SECTION 52. ORS 317.329 is amended to read:
317.329. A corporation shall have the same basis for state
excise or income tax purposes as for federal income tax purposes
for assets:
(1) If the corporation engages in a qualified stock purchase on
or after August 31, 1982, and elects (or is treated as having
elected) section 338 of the Internal Revenue Code { - (as
amended on and after September 3, 1982) - } ; or
(2) If the corporation, before August 31, 1982, engaged in the
purchase of stock which was treated as a purchase of assets (a
purchase and liquidation or similar transaction) resulting in the
recognition of gain or loss for Oregon tax purposes. This
subsection applies for purposes of determining gain or loss upon
disposition only.
SECTION 53. { + (1) The amendments to statutes by sections 23
to 52 of this 2001 Act apply to transactions or activities
occurring on or after January 1, 2001, in tax years beginning on
or after January 1, 2001.
(2) The effective and applicable dates, and the exceptions,
special rules and coordination with the Internal Revenue Code, as
amended, relative to those dates, contained in the Tax Relief
Extension Act of 1999 (P.L. 106-170) and the FSC Repeal and
Extraterritorial Income Exclusion Act of 2000 (P.L. 106-___),
apply for Oregon personal income and corporate excise and income
tax purposes, to the extent they can be made applicable, in the
same manner as they are applied under the Internal Revenue Code
and related federal law.
(3)(a) If a deficiency is assessed against any taxpayer for a
tax year beginning before January 1, 2001, and the deficiency, or
any portion thereof, is attributable to any retroactive treatment
under the amendments to statutes by sections 23 to 52 of this
2001 Act, then any interest or penalty assessed under ORS chapter
305, 314, 315, 316, 317 or 318 with respect to the deficiency or
portion thereof shall be canceled.
(b) If a refund is due any taxpayer for a tax year beginning
before January 1, 2001, and the refund or any portion thereof is
due the taxpayer on account of any retroactive treatment under
the amendments to statutes by sections 23 to 52 of this 2001 Act,
then notwithstanding ORS 305.270 or 314.415 or other law, the
refund or portion thereof shall be paid without interest.
(c) Any changes required on account of the amendments to
statutes by sections 23 to 52 of this 2001 Act, for a tax year
beginning before January 1, 2001, shall be made by filing an
amended return within the time prescribed by law.
(d) If a taxpayer fails to file an amended return under
paragraph (c) of this subsection, the Department of Revenue shall
make any changes under paragraph (c) of this subsection on the
return to which the changes relate within the period specified
for issuing a notice of deficiency or claiming a refund as
otherwise provided by law with respect to that return, or within
one year after a return for a tax year beginning on or after
January 1, 2001, and before January 1, 2002, is filed, whichever
period expires later. + }
SECTION 54. ORS 671.540 is amended to read:
671.540. ORS 671.510 to 671.710 and 671.990 (2) do not apply
to:
(1) Any federal or state agency or any political subdivision
performing landscaping on public property.
(2) Any landscape architect registered pursuant to ORS 671.310
to 671.459 and practicing as provided therein.
(3) Any landscaping work for which the price of all contracts
for labor, materials and other items for a given job site in a
calendar year is less than $500 and the work is of a casual,
minor or inconsequential nature. This subsection does not apply
to a person who advertises or represents through any manner
including a sign, card or other device which might indicate to
the public that the person is a landscape contractor or a
landscaping business or is qualified to so act.
(4) Any landscaping work that is a casual, minor or
inconsequential incident of maintenance of grounds.
(5) Installation of fences, decks, arbors, driveways, walkways
or retaining walls when performed by a person or business
licensed with the Construction Contractors Board.
(6) Grading of plots and areas of land performed in conjunction
with new or remodeling construction when performed by a person or
business licensed with the Construction Contractors Board.
(7) Any owner of property who contracts for landscaping work to
be performed by a landscape contractor. This subsection does not
apply to a person who, in pursuit of an independent business,
performs or contracts for the performance of landscaping work
with the intent of offering for sale before, upon or after
completion of the landscaping work, the property upon which the
landscaping work is performed.
(8) Any landscaping work performed by a person on property that
the person owns or in which the person has a legal interest.
This subsection does not apply to a person who, in pursuit of an
independent business, performs or contracts for the performance
of landscaping work with the intent of offering for sale before,
upon or after completion of the landscaping work, the property on
which the landscaping work is performed.
(9) A general contractor licensed under ORS chapter 701 who
performs landscaping work if the total value of the landscaping
is less than $2,500 per residential dwelling and the landscaping
work is performed on residential property for which the
contractor is under contract for the construction of a new
dwelling. The State Landscape Contractors Board shall revise the
amount specified in this subsection every five years, beginning
in 2003, based on changes in the Portland Consumer Price Index
{ - as defined in ORS 316.085 - } . This subsection does not
apply to a general contractor performing irrigation work unless
the work is performed pursuant to a permit issued by the local
building official.
(10) A general contractor licensed under ORS chapter 701 who
performs landscaping work on residential property that is
directly related to local building code requirements or occupancy
ordinances including, but not limited to, the placement of street
trees. This subsection does not apply to a general contractor
performing irrigation work unless the work is performed pursuant
to a permit issued by the local building official.
{ + (11) As used in this section, 'Portland Consumer Price
Index' means the Consumer Price Index for All Urban Consumers
(Portland -- all items) as published by the Bureau of Labor
Statistics of the United States Department of Labor. For purposes
of this subsection, the revision of the Consumer Price Index that
is the most consistent with the Portland Consumer Price Index for
1986 shall be used. + }
SECTION 55. { + ORS 316.743 is repealed. + }
SECTION 56. ORS 315.266 is amended to read:
315.266. (1) In addition to any other credit available for
purposes of ORS chapter 316, an eligible resident individual
shall be allowed a credit against the tax otherwise due under ORS
chapter 316 for the tax year in an amount equal to five percent
of the earned income credit allowable to the individual for the
same tax year under section 32 of the Internal Revenue Code.
(2) An eligible nonresident individual shall be allowed the
credit computed in the same manner and subject to the same
limitations as the credit allowed a resident by subsection (1) of
this section. However, the credit shall be prorated using the
proportion provided in ORS 316.117.
(3) If a change in the taxable year of a taxpayer occurs as
described in ORS 314.085, or if the Department of Revenue
terminates the taxpayer's taxable year under ORS 314.440, the
credit allowed by this section shall be prorated or computed in a
manner consistent with ORS 314.085.
(4) If a change in the status of a taxpayer from resident to
nonresident or from nonresident to resident occurs, the credit
allowed by this section shall be determined in a manner
consistent with ORS 316.117.
(5) The credit allowed under this section shall not exceed the
tax liability of the taxpayer and may not be carried forward to a
succeeding tax year.
(6) The Department of Revenue may adopt rules for purposes of
this section, including but not limited to rules relating to
proof of eligibility and the furnishing of information regarding
the federal earned income credit claimed by the taxpayer for the
tax year.
(7) Refunds attributable to the earned income credit allowed
under this section shall not bear interest.
{ + (8) Notwithstanding ORS 315.004, as used in this section,
' Internal Revenue Code' means the federal Internal Revenue Code
as amended and in effect on June 8, 2001. + }
SECTION 57. ORS 315.274 is amended to read:
315.274. (1) For purposes of this section, 'qualified adoption
expenses' has the meaning given that term in section 23 of the
Internal Revenue Code.
(2) A taxpayer shall be allowed a credit against the taxes
otherwise due under ORS chapter 316 in an amount determined under
subsection (3) of this section for qualified adoption expenses
paid or incurred by the taxpayer during the tax year.
(3) The amount of the credit allowed under this section shall
be equal to the lesser of:
(a) The qualified adoption expenses paid or incurred by the
taxpayer during the tax year less the credit allowed to the
taxpayer under section 23 of the Internal Revenue Code;
(b) $1,500; or
(c) The credit allowed to the taxpayer for qualified adoption
expenses under section 23 of the Internal Revenue Code.
(4) In the case of a credit allowed under this section:
(a) A nonresident shall be allowed the credit under this
section in the proportion provided in ORS 316.117.
(b) If a change in the status of a taxpayer from resident to
nonresident or from nonresident to resident occurs, the credit
allowed by this section shall be determined in a manner
consistent with ORS 316.117.
(c) If a change in the taxable year of a taxpayer occurs as
described in ORS 314.085, or if the Department of Revenue
terminates the taxpayer's taxable year under ORS 314.440, the
credit allowed under this section shall be prorated or computed
in a manner consistent with ORS 314.085.
(5) Any tax credit otherwise allowable under this section that
is not used by the taxpayer in a particular tax year may be
carried forward and offset against the taxpayer's tax liability
for the next succeeding tax year. Any credit remaining unused in
such next succeeding tax year may be carried forward and used in
the second succeeding tax year, and likewise any credit not used
in that second succeeding tax year may be carried forward and
used in the third succeeding tax year, and any credit not used in
that third succeeding tax year may be carried forward and used in
the fourth succeeding tax year, but may not be carried forward
for any tax year thereafter.
{ + (6) Notwithstanding ORS 315.004, as used in this section,
' Internal Revenue Code' means the federal Internal Revenue Code
as amended and in effect on June 8, 2001. + }
SECTION 58. { + This 2001 Act takes effect on the 91st day
after the date on which the regular session of the Seventy-first
Legislative Assembly adjourns sine die. + }
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