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 1574
 
                           A-Engrossed
 
                         House Bill 2329
                  Ordered by the House April 17
            Including House Amendments dated April 17
 
Ordered printed by the Speaker pursuant to House Rule 12.00A (5).
  Presession filed (at the request of Representative Jeff Kropf)
 
 
                             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.
 
  Exempts earned income of minors  { + attending school or being
homeschooled + } from income tax. { +  Phases in exemption. + }
 
                        A BILL FOR AN ACT
Relating to taxation; creating new provisions; and amending ORS
  316.372.
Be It Enacted by the People of the State of Oregon:
  SECTION 1.  { + Section 2 of this 2001 Act is added to and made
a part of ORS chapter 316. + }
  SECTION 2.  { + (1) Income received by minors as earned income,
as defined in section 32(c)(2) of the Internal Revenue Code, is
exempt from the tax imposed by this chapter.
  (2) This section applies only to minors who attend a public or
private school or who receive instruction as a homeschooled
student. + }
  SECTION 3.  { + Notwithstanding section 2 (1) of this 2001 Act:
  (1) For tax years beginning on or after January 1, 2002, and
before January 1, 2003, 25 percent of earned income is exempt
from tax under section 2 of this 2001 Act.
  (2) For tax years beginning on or after January 1, 2003, and
before January 1, 2004, 50 percent of earned income is exempt
from tax under section 2 of this 2001 Act.
  (3) For tax years beginning on or after January 1, 2004, and
before January 1, 2005, 75 percent of earned income is exempt
from tax under section 2 of this 2001 Act. + }
  SECTION 4.  { + Section 2  + }  { +  of this 2001 Act applies
to tax years beginning on or after January 1, 2002. + }
  SECTION 5. ORS 316.372 is amended to read:
  316.372. (1) Except as provided in subsection (2) of this
section { +  and section 2 of this 2001 Act + }, a minor shall
file a return and include therein all items of income, including
income attributable to personal services, and such income shall
not be included on the return of the parent. All expenditures by
the parent or the minor attributable to such income are
considered to have been paid or incurred by the minor. However,
any tax assessed against the minor, to the extent, attributable
to income from personal services, if not paid by the minor, for
all purposes shall be considered as having also been properly
assessed against the parent. For the purposes of this
section { + , + } the term 'parent ' includes an individual who
is entitled to the services of a minor by reason of having
parental rights and duties in respect of such minor.
  (2) If a parent is eligible to elect and elects to include the
interest and dividend income of a child on the parent's federal
income tax return under section 1(g)(7)(B) of the Internal
Revenue Code, the parent shall be considered to have elected to
include the interest and dividend income of the child on the
return filed by the parent for the same taxable period for
purposes of this chapter. The child need not in such case file a
return for purposes of this chapter for the taxable period to
which the election applies.
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