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 562
House Bill 2827
Sponsored by Representative MORRISETTE
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 as
introduced.
Imposes gross receipts tax.
Requires that person who engages in business in state or who is
required to collect gross receipts tax must register with
Department of Revenue.
Appropriates moneys.
Becomes operative July 1, 2005, if proposed amendment to Oregon
Constitution establishing gross receipts tax to meet public
education funding requirements is approved by people at next
regular general election.
A BILL FOR AN ACT
Relating to finance; appropriating money; 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. { + Short title. + } { + Sections 1 to 131 of this
2001 Act may be cited as the Oregon Gross Receipts Tax Act. + }
{ +
DEFINITIONS + }
SECTION 2. { + Unless the context requires otherwise, the
definitions contained in sections 2 to 32 of this 2001 Act govern
the construction of sections 1 to 131 of this 2001 Act. + }
SECTION 3. { + Business. + } { + ' Business' includes all
activities engaged in with the object of gain, benefit or
advantage to the taxpayer or to another person or class, directly
or indirectly. + }
SECTION 4. { + By-product. + } { + ' By-product' means any
additional product, other than the principal or intended product,
that results from extracting or manufacturing activities and that
has a market value without regard to whether or not such
additional product was an expected or intended result of the
extracting or manufacturing activity. + }
SECTION 5. { + Cash discount. + } { + ' Cash discount' means
a deduction from the invoice price of goods or charge for
services that is allowed if the bill is paid on or before a
specified date. + }
SECTION 6. { + Casual or isolated sale. + } { + ' Casual or
isolated sale' means a sale made by a person who is not engaged
in the business of selling the type of property involved. + }
SECTION 7. { + Commercial or industrial use. + } { + '
Commercial or industrial use' means the following uses of
products, including by-products, by the extractor or manufacturer
thereof:
(1) Any use as a consumer.
(2) The manufacturing of articles, substances or
commodities. + }
SECTION 8. { + Competitive telephone service, network
telephone service, telephone business, telephone service. (1)
'Competitive telephone service' means the providing by any person
of telecommunications equipment or apparatus, or service related
to that equipment or apparatus, including, but not limited to,
repair or maintenance service, if the equipment or apparatus is
of a type that can be provided by persons not subject to
regulation as telephone companies and for which a separate charge
is made.
(2) 'Network telephone service' means the providing by any
person of access to a local telephone network, local telephone
network switching service, toll service or coin telephone
services, or the providing of telephonic, video, data or similar
communication or transmission for hire, via a local telephone
network, toll line or channel, cable, microwave or similar
communication or transmission system. 'Network telephone service'
includes interstate service, including toll service, originating
from or received on telecommunications equipment or apparatus in
this state if the charge for the service is billed to a person in
this state. 'Network telephone service' does not include the
providing of competitive telephone service nor cable television
service, nor the providing of broadcast services by radio or
television stations.
(3) 'Telephone business' means the business of providing
network telephone service, as defined in subsection (2) of this
section. It includes cooperative or farmer line telephone
companies or associations operating an exchange.
(4) 'Telephone service' means competitive telephone service or
network telephone service, or both, as defined in subsections (1)
and (2) of this section. + }
SECTION 9. { + Consumer. (1) 'Consumer' means:
(a) Any person who purchases, acquires, owns, holds or uses any
article of tangible personal property irrespective of the nature
of the business of the person.
(b) Any person who installs, repairs, cleans, alters, improves,
constructs or decorates real or personal property of or for
consumers, other than for one or more of the following purposes:
(A) Resale as tangible personal property in the regular course
of business.
(B) Incorporation of such property as an ingredient or
component of real or personal property when installing,
repairing, cleaning, altering, improving, constructing or
decorating such real or personal property of or for consumers.
(C) Consumption of such property in producing for sale a new
article of tangible personal property or a new substance, of
which such property becomes an ingredient or component or as a
chemical used in processing, when the primary purpose of such
chemical is to create a chemical reaction directly through
contact with an ingredient of a new article being produced for
sale.
(D) Purchases for the purpose of consuming the property
purchased in producing ferrosilicon that is subsequently used in
producing magnesium for sale, if the primary purpose of such
property is to create a chemical reaction directly through
contact with an ingredient of ferrosilicon.
(c) Any person engaged in any business activity taxable under
section 42 of this 2001 Act and any person who purchases,
acquires or uses any telephone service as defined in section 8 of
this 2001 Act other than for resale in the regular course of
business.
(d) Any person engaged in the business of contracting for the
building, repairing or improving of any street, place, road,
highway, easement, right of way, mass public transportation
terminal or parking facility, bridge, tunnel or trestle that is
owned by the State of Oregon, a municipal corporation or
political subdivision of the State of Oregon, or the United
States and that is used, or to be used, primarily for foot or
vehicular traffic including mass transportation vehicles of any
kind, as described in section 41 of this 2001 Act.
(e) Any person who, in respect to tangible personal property,
incorporates the property as an ingredient or component of a
publicly owned street, place, road, highway, easement, right of
way, mass public transportation terminal or parking facility,
bridge, tunnel or trestle by installing, placing or spreading the
property in or upon the right of way of the street, place, road,
highway, easement, bridge, tunnel or trestle, or in or upon the
site of the mass public transportation terminal or parking
facility.
(f) Any person who is an owner or lessee or has the right of
possession to, or an easement in, real property that is being
constructed, repaired, decorated, improved or otherwise altered
by a person engaged in business, except:
(A) The State of Oregon or municipal corporations or political
subdivisions of the state in respect to labor and services
rendered to the real property of the corporation or subdivision
that is used or held for public road purposes.
(B) The United States or instrumentalities thereof in respect
to labor and services rendered to their real property.
(g) Any person who is an owner or lessee or has the right of
possession to personal property that is being constructed,
repaired, improved, cleaned, imprinted or otherwise altered by a
person engaged in business.
(h) Any person engaged in the business of constructing,
repairing, decorating or improving new or existing buildings or
other structures under, upon or above real property of or for the
State of Oregon, a municipal corporation or political subdivision
of the State of Oregon, or the United States or any
instrumentality thereof, including the installing or attaching of
any article of tangible personal property therein or thereto,
whether or not such personal property becomes a part of the
realty by virtue of installation.
(i) Any person engaged in the business of clearing land and
moving earth of or for the State of Oregon, a municipal
corporation or political subdivision of the State of Oregon, the
United States or any instrumentality thereof.
(2) A person shall be a consumer within the meaning of
subsection (1)(h) and (i) of this section in respect to tangible
personal property incorporated into, installed in or attached to
buildings or other structures by the person. Nothing contained in
this section shall be construed to modify any other definition of
' consumer.' + }
SECTION 10. { + Cultured Christmas trees. + } { + ' Cultured
Christmas trees' has the meaning given that term in ORS
215.203. + }
SECTION 11. { + Department. + } { + ' Department' means the
Department of Revenue. + }
SECTION 12. { + Engaging in business. + } { + ' Engaging in
business ' means commencing, conducting or continuing in business
and also the exercise of corporate or franchise powers, as well
as liquidating a business when the liquidators thereof hold
themselves out to the public as conducting business. + }
SECTION 13. { + Extractor. + } { + (1) 'Extractor' means
every person who from the land of the person or from the land of
another person under a right or license granted by lease or
contract, either directly or by contracting with others for the
necessary labor or mechanical services, for sale or for
commercial or industrial use:
(a) Mines, quarries, takes or produces coal, oil, natural gas,
ore, stone, sand, gravel, clay, mineral or other natural resource
products.
(b) Fells, cuts or takes timber, cultured Christmas trees or
other natural products or agricultural products.
(c) Takes fish or takes, cultivates or raises shellfish or
other sea or inland water foods or products.
(2) 'Extractor' includes a person who extracts for hire.
(3) 'Extractor' does not include persons performing under
contract the necessary labor or mechanical services for
others. + }
SECTION 14. { + Gross income of the business. + } { + (1)
'Gross income of the business' means the value proceeding or
accruing by reason of the transaction of the business engaged in
and includes, but is not limited to, gross receipts from sales,
compensation for the rendition of services, gains realized from
trading in stocks, bonds or other evidences of indebtedness,
interest (other than interest that the state is prohibited from
taxing by federal Constitution or law), discount, rents,
royalties, fees, commissions, dividends and other emoluments
however designated, all without any deduction on account of the
cost of tangible property sold, the cost of materials used, labor
costs, interest, discount, delivery costs, taxes or any other
expense whatsoever paid or accrued and without any deduction on
account of losses.
(2) If gross income of the business is attributable to
activities both within and without this state, the gross income
of the business shall be apportioned to this state in the
proportion that the income that is derived from services rendered
or activities engaged in within this state bears to gross income
of the business from services rendered or activities engaged in
everywhere.
(3) If apportionment as described under subsection (2) of this
section cannot be accurately made by separate accounting methods,
the taxpayer shall apportion to this state that proportion of
total income that the cost of doing business within this state
bears to the total cost of doing business both within and without
this state.
(4) Notwithstanding subsections (2) and (3) of this section, if
gross income from the business is attributable to activities
engaged in both within and without this state, the Department of
Revenue may adopt rules permitting or requiring the apportionment
of the gross income to this state consistent with uniform rules
for apportionment or allocation described under ORS 305.655 or
314.605 to 314.675. Rules adopted under this subsection may be of
general applicability or may apply only to specific business
activities. + }
SECTION 15. { + Gross receipts from sales. + } { + ' Gross
receipts from sales' means the value proceeding or accruing from
the sale of tangible personal property or for services rendered,
without any deduction on account of the cost of property sold,
the cost of materials used, labor costs, interest, discount paid,
delivery costs, taxes or any other expense whatsoever paid or
accrued and without any deduction on account of losses. + }
SECTION 16. { + Gross receipts tax. + } { + ' Gross receipts
tax' means the tax imposed by sections 33 to 42 of this 2001
Act. + }
SECTION 17. { + Improvement. + } { + ' Improve' or
'improvement' in the case of real or personal property includes
but is not limited to construction, reconstruction, renovation,
rehabilitation, reconditioning, refurbishment, alteration,
installation, repair, maintenance, cleaning, alteration,
decoration, fabrication, printing or imprinting. + }
SECTION 18. { + In this state. + } { + ' In this state' or
'within this state' includes all federal areas lying within the
boundaries of this state. + }
SECTION 19. { + Local government unit. + } { + ' Local
government unit ' or 'unit of local government' has the meaning
given unit of local government under ORS 190.003. + }
SECTION 20. { + Manufacturer. (1) 'Manufacturer' means every
person who, either directly or by contracting with others for the
necessary labor or mechanical services, manufactures for sale or
for commercial or industrial use, from materials or ingredients,
any articles, substances or commodities.
(2) If the owner of equipment or facilities furnishes, or sells
to the customer prior to manufacture, all or a portion of the
materials that become a part or whole of the manufactured
article, the Department of Revenue shall prescribe equitable
rules for determining tax liability.
(3) A nonresident of this state who is the owner of materials
processed in this state by a processor for hire is not deemed to
be engaged in business in this state as a manufacturer because of
the performance of such processing work.
(4) As used in this section, 'manufacture':
(a) Embraces all activities of a commercial or industrial
nature wherein labor or skill is applied, by hand or machinery,
to materials so that as a result thereof a new, different or
useful substance or article of tangible personal property is
produced for sale or commercial or industrial use, and shall
include the production or fabrication of specially made or
custom-made articles.
(b) Includes processing for hire. + }
SECTION 21. { + Person. 'Person' means any individual,
receiver, administrator, executor, assignee, trustee in
bankruptcy, trust, estate, firm, copartnership, joint venture,
club, company, joint stock company, business trust, the State of
Oregon, a municipal corporation or political subdivision of the
State of Oregon, corporation, association, society or any group
of individuals acting as a unit, whether mutual, cooperative,
fraternal, nonprofit or otherwise and the United States or any
instrumentality thereof. + }
SECTION 22. { + Retail store, retail outlet. + } { + (1)
'Retail store ' or 'retail outlet' includes automats or business
establishments retailing diversified goods primarily through the
use of devices or apparatus through which sales are activated by
coin deposits.
(2) 'Retail store' or 'retail outlet' does not include a device
or apparatus through which sales are activated by coin
deposits. + }
SECTION 23. { + Sale. 'Sale' means any transfer of the
ownership of, title to or possession of property for a valuable
consideration. 'Sale' includes:
(1) Renting or leasing, conditional sale contracts, leases with
option to purchase and any contract under which possession of the
property is given to the purchaser but title is retained by the
vendor as security for the payment of the purchase price.
(2) The furnishing of food, drink or meals for compensation
whether consumed upon the premises or not. + }
SECTION 24. { + Sale at retail, retail sale. (1) 'Sale at
retail' or 'retail sale' means every sale of an article of
tangible personal property to any person without regard to the
nature of the business of the person or whether the person is
engaged in business and includes but is not limited to the
following:
(a) A sale to a person who improves real or personal property
of or for a consumer.
(b) A sale of an article produced, fabricated or imprinted.
(c) A sale of an article that is used or consumed or to be used
or consumed in the performance of any activity classified as a
sale at retail even though the article is resold or utilized
after the use.
(d) A sale to a person engaged in any business that is taxable
under section 42 of this 2001 Act (services and related
activities) with respect to that business.
(e) A sale to a person engaged in business that is taxable
under section 41 (1)(b) of this 2001 Act (United States and state
and local government highway contractor) with respect to that
business.
(f) A sale to a person engaged in business that is taxable
under section 41 (1)(c) of this 2001 Act (government building
contractor) with respect to that business.
(2) 'Sale at retail' or 'retail sale' includes the renting or
leasing of tangible personal property to consumers.
(3) 'Sale at retail' or 'retail sale' does not include:
(a) The sale of, or charge made for, labor and services
rendered in respect to the building, repairing or improving of
any street, place, road, highway, easement, right of way, mass
public transportation terminal or parking facility, bridge,
tunnel or trestle that is owned by the United States, its
instrumentality, this state or a unit of local government and
that is used or to be used primarily for foot or vehicular
traffic including mass transportation.
(b) The sale of or charge made for labor and services rendered
in respect to the constructing, repairing, decorating or
improving of new or existing buildings or other structures under,
upon or above real property of or for the United States, its
instrumentality, this state or a unit of local government, or to
the installing or attaching of any article of tangible personal
property therein or thereto, whether or not such personal
property becomes a part of the realty by virtue of installation.
(c) The sale of services or charges made for the clearing of
land and the moving of earth of or for the United States, its
instrumentality, this state or a unit of local government.
(4) 'Sale at retail' or 'retail sale' does not include a sale
to a person who:
(a) Purchases for the purpose of resale as tangible personal
property in the regular course of business without intervening
use by the person.
(b) Installs, repairs, cleans, alters, imprints, improves,
constructs or decorates real or personal property of or for
consumers, if the tangible personal property becomes an
ingredient or component of the real or personal property without
intervening use by the person.
(c) Purchases for the purpose of consuming the property
purchased in producing for sale a new article of tangible
personal property or substance, of which the property becomes an
ingredient or component or is a chemical used in processing, when
the primary purpose of such chemical is to create a chemical
reaction directly through contact with an ingredient of a new
article being produced for sale. + }
SECTION 25. { + Sale at wholesale, wholesale sale. (1) 'Sale
at wholesale' or 'wholesale sale' means any sale of tangible
personal property, or any sale of telephone service as defined in
section 8 of this 2001 Act, that is not a sale at retail.
(2) 'Sale at wholesale' means any charge made for labor and
services rendered for persons who are not consumers, in respect
to real or personal property, if such charge is expressly defined
as a retail sale in section 24 of this 2001 Act, when rendered to
or for consumers.
(3) As used in this section, 'real or personal property ' does
not include any natural products named in section 13 of this 2001
Act. + }
SECTION 26. { + Sale at wholesale, sale at retail. (1) '
Wholesale sale,' 'sale at wholesale,' 'retail sale' and ' sale at
retail' do not include the sale of precious metal bullion or
monetized bullion.
(2) In computing the tax imposed by sections 33 to 42 of this
2001 Act on the business of making sales of precious metal
bullion or monetized bullion, the tax shall be imposed on the
amounts received as commissions upon transactions for the
accounts of customers over and above the amount paid to other
dealers associated in such transactions.
(3) The amount of tax computed in the sale of precious metal
bullion or monetized bullion under this section does not include
a deduction or offset for salaries or commissions paid to
salespeople or other employees.
(4) As used in this section:
(a) 'Monetized bullion' means coins or other forms of money
manufactured from gold, silver or other metals used as a medium
of exchange under the laws of this state, the United States or
any foreign nation, but does not include coins or money sold to
be manufactured into jewelry or works of art.
(b) 'Precious metal bullion' means any precious metal that has
been put through a process of smelting or refining, including,
but not limited to, gold, silver, platinum, rhodium and palladium
and that is in such state or condition that its value depends
upon its contents and not upon its form. + }
SECTION 27. { + Successor. (1) 'Successor' means any person to
whom a taxpayer quitting, selling out, exchanging or disposing of
a business sells or otherwise conveys, directly or indirectly, in
bulk and not in the ordinary course of the business of the
taxpayer, a major part of the materials, supplies, merchandise,
inventory, fixtures or equipment of the taxpayer.
(2) 'Successor' includes any person obligated to fulfill the
terms of a contract to any contractor defaulting in the
performance of any contract as to which the person is a surety or
guarantor. + }
SECTION 28. { + Tax year. 'Tax year' or 'taxable year' means
either the calendar year or, when permission is obtained from the
Department of Revenue to use a fiscal year in lieu of the
calendar year, the fiscal year of the taxpayer. + }
SECTION 29. { + To manufacture. (1) 'To manufacture' embraces
all activities of a commercial or industrial nature where labor
or skill is applied, by hand or machinery, to materials so that
as a result thereof a new, different or useful substance or
article of tangible personal property is produced for sale or
commercial or industrial use, and shall include the production or
fabrication of specially made or custom-made articles.
(2) 'To manufacture' does not include conditioning of seed for
use in planting or activities that consist of cutting, grading or
ice-glazing seafood that has been cooked, frozen or canned
outside this state. + }
SECTION 30. { + Tuition fee. (1) 'Tuition fee' includes
library, laboratory, health service and other special fees and
amounts charged for room and board by an educational institution
when the property or service for which such charges are made is
furnished exclusively to the students or faculty of such
institution.
(2) As used in this section, 'educational institution':
(a) Means only those institutions created or generally
accredited as such by the state or defined as a degree granting
institution and accredited by an accrediting association
recognized by the United States Secretary of Education:
(A) That offer to students an educational program of a general
academic nature; or
(B) That are not operated for profit and that are privately
endowed under a deed of trust to offer instruction in trade,
industry or agriculture.
(b) Does not include specialty schools, business colleges,
other trade schools or similar institutions. + }
SECTION 31. { + Value of products. (1) The 'value of products,
' including by-products, extracted or manufactured, shall be
determined by the gross receipts derived from the sale thereof
whether such sale is at wholesale or at retail, to which shall be
added all subsidies and bonuses received from the purchaser or
from any other person with respect to the extraction, manufacture
or sale of the products or by-products by the seller, except:
(a) Where the products, including by-products, are extracted or
manufactured for commercial or industrial use; or
(b) Where the products, including by-products, are shipped,
transported or transferred out of the state, or to another
person, without prior sale or are sold under circumstances such
that the gross receipts from the sale are not indicative of the
true value of the subject matter of the sale.
(2) In cases described in subsection (1)(a) or (b) of this
section, the value shall correspond as nearly as possible to the
gross receipts from sales in this state of similar products of
like quality and character, and in similar quantities, by other
taxpayers plus the amount of subsidies or bonuses ordinarily
payable by the purchaser or by any third person with respect to
the extraction, manufacture or sale of the products. + }
SECTION 32. { + Value proceeding or accruing. 'Value
proceeding or accruing' means the consideration, whether money,
credits, rights or other property expressed in terms of money,
actually received or accrued. The term shall be applied, in each
case, on a cash receipts or accrual basis according to which
method of accounting is regularly employed in keeping the books
of the taxpayer. The Department of Revenue may provide by rule
that the value proceeding or accruing from sales on the
installment plan under conditional contracts of sale may be
reported as of the dates when the payments become due. + }
{ +
IMPOSITION OF TAX + }
SECTION 33. { + Imposition of tax generally. To implement
section 14 (2), Article IX of the Oregon Constitution, a tax is
imposed on every person for the privilege of engaging in business
in this state. The amount of the tax shall be determined by
applying the rate designated under section 34 of this 2001 Act to
gross receipts from sales or other business activity of each
person engaged in business in this state, in the manner provided
in sections 1 to 131 of this 2001 Act. + }
SECTION 34. { + Tax rate. The rate of the tax imposed under
section 33 of this 2001 Act shall be determined by the
Legislative Assembly in the manner provided in section 14 (6) and
(7), Article IX of the Oregon Constitution. + }
SECTION 35. { + Extractors. (1) The amount of the gross
receipts tax upon every person who engages in business within
this state as an extractor is equal to the value of the products,
including by-products, extracted for sale or for commercial or
industrial use multiplied by 1.00 times the rate designated under
section 34 of this 2001 Act.
(2) The measure of the tax is the value of the products,
including by-products, so extracted, regardless of the place of
sale or the fact that deliveries may be made to points outside
the state. + }
SECTION 36. { + Manufacturers. (1) The amount of the gross
receipts tax imposed upon every person who engages in business
within this state as a manufacturer is equal to the value of the
products manufactured, including by-products, multiplied by 1.00
times the rate designated under section 34 of this 2001 Act.
(2) The measure of the tax is the value of the products,
including by-products, so manufactured, regardless of the place
of sale or the fact that deliveries may be made to points outside
the state. + }
SECTION 37. { + Retailers. For every person who engages in the
business within this state of making sales at retail, the amount
of the gross receipts tax with respect to such business shall be
equal to the gross receipts from sales of the business multiplied
by 1.00 times the rate designated under section 34 of this 2001
Act. + }
SECTION 38. { + Real estate brokers. (1) For every person who
engages in business within this state as a real estate broker,
the amount of the gross receipts tax with respect to such
business shall be equal to the gross income of the business
multiplied by 1.00 times the rate designated under section 34 of
this 2001 Act.
(2) The measure of the tax on real estate commissions earned by
the real estate broker shall be the gross commission earned by
the particular real estate brokerage office including that
portion of the commission paid to salespersons or associate
brokers in the same office on a particular transaction.
(3) The tax imposed by subsection (1) of this section does not
apply when a real estate commission is divided between an
originating brokerage office and a cooperating brokerage office
on a particular transaction. If the commission is divided between
two separate brokerage offices, each brokerage office shall pay
the tax only upon its respective share of the commission.
(4) When the brokerage office has paid the tax as provided in
subsection (1) of this section, the salespersons or associate
brokers within the same brokerage office are not required to pay
a similar tax upon the same transaction. + }
SECTION 39. { + Tax on buyer and wholesaler of wheat, oats,
dry peas, dry beans, lentils, triticale, corn, rye or
barley--Flour, pearl barley and oil manufacturers--Seafood
products manufacturers--Fruit and vegetable processors--Research
and development organizations--Perishable meat products
processors and wholesalers--Travel agents--Certain international
activities--Stevedoring and associated activities--Low-level
waste disposers--Insurance agents, brokers and solicitors. For
every person engaging within this state:
(1) In the business of buying wheat, oats, dry peas, dry beans,
lentils, triticale, corn, rye or barley, or selling the same at
wholesale, the gross receipts tax imposed shall be equal to the
gross receipts derived from such sales multiplied by 1.00 times
the rate designated under section 34 of this 2001 Act.
(2) In the business of manufacturing wheat into flour, barley
into pearl barley, soybeans into soybean oil or sunflower seeds
into sunflower oil, the amount of the gross receipts tax with
respect to such business shall be equal to the value of the
flour, pearl barley or oil manufactured, multiplied by 1.00 times
the rate designated under section 34 of this 2001 Act.
(3) In the business of splitting or processing dried peas, the
amount of the gross receipts tax with respect to such business
shall be equal to the value of the peas split or processed,
multiplied by 1.00 times the rate designated under section 34 of
this 2001 Act.
(4) In the business of manufacturing seafood products that
remain in a raw, raw frozen or raw salted state at the completion
of the manufacturing by that person, the amount of the gross
receipts tax with respect to such business shall be equal to the
value of the products manufactured multiplied by 1.00 times the
rate designated under section 34 of this 2001 Act.
(5) In the business of manufacturing by canning, preserving,
freezing or dehydrating fresh fruits or vegetables, the amount of
the gross receipts tax with respect to such business shall be
equal to the value of the products canned, preserved, frozen or
dehydrated multiplied by 1.00 times the rate designated under
section 34 of this 2001 Act.
(6) In the business of conducting research and development, and
having the status of a nonprofit corporation or nonprofit
association, the amount of the gross receipts tax with respect to
such activities shall be equal to the gross income derived from
such activities multiplied by 1.00 times the rate designated
under section 34 of this 2001 Act.
(7) In the business of slaughtering, breaking or processing
perishable meat products or selling perishable meat products at
wholesale, the gross receipts tax imposed on such persons shall
be equal to the gross receipts derived from such sales multiplied
by 1.00 times the rate designated under section 34 of this 2001
Act.
(8) In the business of acting as a travel agent, the gross
receipts tax on such activities shall be equal to the gross
income derived from such activities multiplied by 1.00 times the
rate designated under section 34 of this 2001 Act.
(9) In business as an international steamship agent,
international customs house broker, international freight
forwarder, vessel or cargo charter broker in foreign commerce or
international air cargo agent, the amount of the gross receipts
tax with respect only to international activities shall be equal
to the gross income derived from such activities multiplied by
1.00 times the rate designated under section 34 of this 2001 Act.
(10) In the business of stevedoring or associated activities
pertinent to the movement of goods or commodities in waterborne
interstate or foreign commerce, the amount of the gross receipts
tax with respect to such business shall be equal to the gross
receipts derived from such activities multiplied by 1.00 times
the rate designated under section 34 of this 2001 Act. As used in
this subsection, 'stevedoring' and 'associated activities
pertinent to the movement of goods or commodities in waterborne
interstate or foreign commerce' mean all activities of a labor,
service or transportation nature where cargo may be loaded or
unloaded to or from vessels or barges, passing over, onto or
under a wharf, pier or similar structure. This includes but is
not limited to:
(a) Moving cargo to a warehouse or similar holding or storage
yard or area to await further movement in import or export.
(b) Moving cargo to a consolidation freight station to be
stuffed, unstuffed, containerized, separated or otherwise
segregated or aggregated for delivery or loaded on any mode of
transportation for delivery to its consignee.
(c) Wharfage, handling, loading, unloading or moving of cargo
to a convenient place of delivery to the consignee or a
convenient place for further movement to export mode.
(d) Documentation services in connection with the receipt,
delivery, checking, care, custody or control of cargo required in
the transfer of cargo.
(e) Imported automobile handling prior to delivery to
consignee.
(f) Terminal stevedoring and incidental vessel services,
including but not limited to plugging and unplugging refrigerator
service to containers, trailers and other refrigerated cargo
receptacles, and securing ship hatch covers.
(11) As an insurance agent, insurance broker or insurance
solicitor licensed under ORS chapter 746, the amount of the gross
receipts tax with respect to such licensed activities shall be
equal to the gross income of such business multiplied by 1.00
times the rate designated under section 34 of this 2001 Act. + }
SECTION 40. { + Wholesalers, distributors. (1) For every
person, except persons taxable under section 39 (1) or (7) of
this 2001 Act, engaging within this state in the business of
making sales at wholesale, the amount of the gross receipts tax
shall be equal to the gross receipts from sales of such business
multiplied by 1.00 times the rate designated under section 34 of
this 2001 Act.
(2) The tax imposed by this section is levied and shall be
collected from every person engaged in the business of
distributing in this state articles of tangible personal property
owned by them, from their own warehouse or other central location
in this state to two or more of their own retail stores or
outlets.
(3) Where no change of title or ownership occurs, the gross
receipts tax imposed is equal to the tax upon wholesalers for
persons performing functions essentially comparable to those of a
wholesaler but not actually making sales. In addition:
(a) The tax imposed by subsection (1) of this section may not
be assessed twice to the same person for the same article. The
amount of the tax as to such persons shall be computed by
multiplying 1.00 times the rate designated under section 34 of
this 2001 Act by the value of the article so distributed as of
the time of such distribution.
(b) The persons engaged in the activities described in this
subsection are not liable for the tax imposed if by proper
invoice it can be shown that the purchase of such property was
made from a wholesaler who has paid the gross receipts tax to the
state upon the same articles. Subsection (1) of this section does
not apply to purchases from manufacturers as defined in section
20 of this 2001 Act.
(4) The Department of Revenue shall prescribe uniform and
equitable rules for the purpose of ascertaining a value described
in subsection (3) of this section, which shall correspond as
nearly as possible to the gross receipts from sales at wholesale
in this state of similar articles of like quality and character
and in similar quantities by other taxpayers.
(5) For purposes of this section, delivery trucks or vans are
not considered to be retail stores or outlets. + }
SECTION 41. { + Printers, publishers, highway contractors,
extracting or processing for hire, cold storage warehouse or
storage warehouse operation, insurance general agents, radio and
television broadcasting--Cold storage warehouse defined--Storage
warehouse defined. (1) The amount of the gross receipts tax on a
business shall be equal to the gross income of the business
multiplied by 1.00 times the rate designated under section 34 of
this 2001 Act for every person engaging within this state in any
of the following business activities:
(a) Printing or publishing newspapers, periodicals or
magazines.
(b) Building, repairing or improving any street, place, road,
highway, easement, right of way, mass public transportation
terminal or parking facility, bridge, tunnel or trestle that is
owned by this state, a municipal corporation or political
subdivision of the state or by the United States and that is
used, or to be used, primarily for foot or vehicular traffic
including mass transportation vehicles of any kind and including
any readjustment, reconstruction or relocation of the facilities
of any public, private or cooperatively owned utility or railroad
in the course of such building, repairing or improving, if the
cost of the readjustment, reconstruction or relocation is the
responsibility of the public authority whose street, place, road,
highway, easement, right of way, mass public transportation
terminal or parking facility, bridge, tunnel or trestle is being
built, repaired or improved.
(c) Constructing, repairing, decorating or improving new or
existing buildings or other structures under, upon or above real
property of or for the United States, its instrumentality, this
state or a unit of local government, or the installing or
attaching of any article of tangible personal property therein or
thereto, whether or not such personal property becomes a part of
the realty by virtue of installation, including the clearing of
land and the moving of earth of or for the United States, its
instrumentality, this state or a unit of local government.
(d) Extracting for hire or processing for hire.
(e) Operating a cold storage warehouse or storage warehouse,
not including the rental of cold storage lockers.
(f) Representing and performing services for fire or casualty
insurance companies as an independent resident managing general
agent licensed under ORS chapter 744.
(g) Radio and television broadcasting, excluding network,
national and regional advertising computed as a standard
deduction based on the national average thereof as annually
reported by the Federal Communications Commission, or in lieu
thereof by itemization by the individual broadcasting station,
and excluding that portion of revenue represented by the
out-of-state audience computed as a ratio to the station's total
audience as measured by the 100 microvolt signal strength and
delivery by wire.
(h) Engaging in activities that bring a person within the
definition of consumer contained in section 9 of this 2001 Act,
as now or hereafter amended.
(2) As used in this section:
(a) 'Cold storage warehouse' means a storage warehouse used to
store fresh or frozen perishable fruits or vegetables, meat,
seafood, dairy products or fowl, or any combination, at a desired
temperature to maintain the quality of the product for orderly
marketing.
(b) 'Storage warehouse':
(A) Means a building or structure, or any part thereof, in
which goods, wares or merchandise are received for storage for
compensation.
(B) Does not mean field warehouses, fruit warehouses, fruit
packing plants, warehouses, public garages storing automobiles,
railroad freight sheds, docks and wharves, and self-storage or
mini-storage facilities whereby customers have direct access to
individual storage areas by separate entrance. + }
SECTION 42. { + Business or service activities. (1) Every
person engaging within this state in any business activity other
than, or in addition to, those enumerated in sections 35 to 41 of
this 2001 Act is included in the scope of the gross receipts tax.
The amount of tax on account of the business activity shall be
equal to the gross income of the business multiplied by 1.00
times the rate designated under section 34 of this 2001 Act.
(2) This section includes but is not limited to:
(a) Any activity whether or not title to materials used in the
performance of the business passes to another by accession,
merger or a means other than outright sale.
(b) Persons engaged in the business of rendering any type of
service that does not constitute a sale at retail or a sale at
wholesale.
(3) The value of advertising, demonstrative and promotional
supplies and materials furnished to an agent by a principal or
supplier to be used for informational, educational and
promotional purposes is not considered a part of the remuneration
or commission of the agent and is not subject to taxation under
sections 33 to 42 of this 2001 Act. + }
{ +
EXEMPTIONS AND DEDUCTIONS + }
SECTION 43. { + Exemptions--Public utilities. The tax imposed
by sections 33 to 42 of this 2001 Act does not apply to any
governmental unit, or to any public or private corporation,
company, individual, association of individuals, or its lessees,
trustees or receivers engaged in the ownership, operation,
management or control of all or part of any plant or equipment in
this state for the production, transmission, delivery or
furnishing of heat, light, water, sewer or power directly or
indirectly to or for the public. + }
SECTION 44. { + Exemptions--Transportation and public service
companies. The tax imposed by sections 33 to 42 of this 2001 Act
does not apply to the following:
(1) Express carrier businesses.
(2) Motor transportation businesses.
(3) Public service businesses.
(4) Railroad businesses.
(5) Railroad car businesses.
(6) Telegraph businesses.
(7) Tugboat businesses.
(8) Urban transportation businesses.
(9) Vessels under 65 feet in length. + }
SECTION 45. { + Definitions. As used in section 44 of this
2001 Act:
(1) 'Express carrier business' means the business of carrying
property for public hire on the line of any common carrier
operated in this state, when such common carrier is not owned or
leased by the person engaging in such business.
(2) 'Motor transportation business' means the business, except
urban transportation business, of operating any motor propelled
vehicle by which persons or property of others are conveyed for
hire. In addition:
(a) 'Motor transportation business' includes but is not limited
to:
(A) The operation of any motor propelled vehicle as an auto
transportation company, except urban transportation business; and
(B) A common carrier or contract carrier.
(b) 'Motor transportation business' does not mean nor include
the transportation of logs or other forest products exclusively
upon private roads or private highways.
(3) 'Public service business' means any business subject to
control by the state, or having the powers of eminent domain and
the duties incident thereto, or any business hereafter declared
by the Legislative Assembly to be of a public service nature,
except telephone business as defined in section 8 of this 2001
Act. ' Public service business' includes but is not limited to
airplane transportation, boom, dock, ferry, log patrol, pipeline,
toll bridge, toll logging road, utilities, water transportation
and wharf businesses.
(4) 'Railroad business' means the business of operating any
railroad, by whatever power operated, for public use in the
conveyance of persons or property for hire. 'Railroad business '
does not, however, include any business herein defined as an
urban transportation business.
(5) 'Railroad car business' means the business of renting,
leasing or operating stock cars, furniture cars, refrigerator
cars, fruit cars, poultry cars, tank cars, sleeping cars, parlor
cars, buffet cars, tourist cars or any other kinds of cars used
for transportation of property or persons upon the line of any
railroad operated in this state when such railroad is not owned
or leased by the person engaging in such business.
(6) 'Telegraph business' means the business of affording
telegraphic communication for hire.
(7) 'Tugboat business' means the business of operating
tugboats, towboats, wharf boats or similar vessels in the towing
or pushing of vessels, barges or rafts for hire.
(8)(a) 'Urban transportation business' means the business of
operating any vehicle for public use in the conveyance of persons
or property for hire, insofar as:
(A) Operating entirely within the corporate limits of any city
or town, or within five miles of the corporate limits thereof; or
(B) Operating entirely within and between cities and towns that
have corporate limits that are not more than five miles apart or
within five miles of the corporate limits of either.
(b) 'Urban transportation business' includes but is not limited
to the business of operating passenger vehicles of every type and
also the business of operating cartage, pickup or delivery
services, including in such services the collection and
distribution of property arriving from or destined to a point
within or without this state, whether or not such collection or
distribution is made by the person performing a local or
interstate line-haul of the property. + }
SECTION 46. { + Exemptions--International banking facilities.
(1) The tax imposed by sections 33 to 42 of this 2001 Act does
not apply to the gross receipts of an international banking
facility.
(2) As used in this section, an 'international banking
facility' means a facility represented by a set of asset and
liability accounts segregated on the books and records of a
commercial bank, the principal office of which is located in this
state, and that is incorporated and doing business under the laws
of the United States or of this state, a United States branch or
agency of a foreign bank, an Edge corporation organized under
section 25(a) of the Federal Reserve Act, 12 U.S.C. 611 to 631,
or a corporation having an agreement or undertaking with the
Board of Governors of the Federal Reserve System under section 25
of the Federal Reserve Act, 12 U.S.C. 601 to 604a, that includes
only international banking facility time deposits as defined in
subsection (a)(2) of section 204.8 of Regulation D (12 C.F.R.
204, as promulgated by the Board of Governors of the Federal
Reserve System), and international banking facility extensions of
credit as defined in subsection (a)(3) of section 204.8 of
Regulation D. + }
SECTION 47. { + Exemptions--Insurance business. (1) The tax
imposed by sections 33 to 42 of this 2001 Act does not apply to
any person with respect to insurance business upon which a tax
based on gross premiums is paid to the state pursuant to ORS
chapter 731.
(2) The provisions of this section do not exempt any person
engaging in the business of representing any insurance company,
whether as general or local agent or acting as broker for such
companies.
(3) The provisions of this section do not exempt any bonding
company from tax with respect to gross income derived from the
completion of any contract as to which it is a surety or as to
any liability as successor to the liability of the defaulting
contractor. + }
SECTION 48. { + Exemptions--Alcohol manufactured for
gasohol--Gasohol for motor vehicle fuel. (1) The tax imposed by
section 40 (1) of this 2001 Act does not apply to any person who
manufactures alcohol with respect to sales of alcohol to be used
in the production of gasohol for use as motor vehicle fuel nor
with respect to sales of gasohol for use as motor vehicle fuel.
(2) As used in this section:
(a) 'Gasohol' means motor vehicle fuel that contains at least
10 percent ethanol.
(b) 'Motor vehicle fuel' has the meaning given that term in ORS
319.010. + }
SECTION 49. { + Exemptions--Adult foster homes. The tax
imposed by sections 33 to 42 of this 2001 Act does not apply to
adult foster homes that are licensed under ORS chapter 443, or
that are specifically exempt from licensing under rules of the
Department of Human Services. + }
SECTION 50. { + Exemptions--Agriculture. (1) The tax imposed
by sections 33 to 42 of this 2001 Act does not apply to any
person with respect to the business of growing or producing for
sale upon land owned by the person or upon land in which the
person has a present right of possession, any agricultural or
horticultural produce or crop, or of raising upon land owned by
the person or upon land in which the person has a present right
of possession, any cultured Christmas tree or any animal, bird,
fish or insect, or the milk, eggs, wool, fur, meat, honey or
other substance obtained therefrom, or in respect to the sale of
such products at wholesale by such grower, producer or raiser
thereof.
(2) The exemption granted by this section does not apply to:
(a) Any person selling such products at retail or using such
products as ingredients in a manufacturing process.
(b) The sale of any animal or substance obtained therefrom by a
person in connection with the operating by the person of a
stockyard, slaughterhouse or packinghouse.
(c) Any person with respect to the business of taking,
cultivating or raising timber.
(d) Any association of persons, whether mutual, cooperative or
otherwise, engaging in any business activity with respect to
which tax liability is imposed under the provisions of sections
33 to 42 of this 2001 Act.
(3) The gross receipts tax does not apply to any persons who
participate in the federal Conservation Reserve Program or its
successor administered by the United States Department of
Agriculture with respect to land enrolled in that program.
(4) As used in this section, 'fish' means fish that are
cultivated or raised entirely within confined rearing areas on
land owned by the person or on land in which the person has a
present right of possession. + }
SECTION 51. { + Exemptions--Agricultural fairs. (1) The tax
imposed by sections 33 to 42 of this 2001 Act does not apply to
any business of any bona fide agricultural fair, if no part of
the net earnings therefrom inures to the benefit of any
stockholder or member of the association conducting the fair.
(2) Any amount paid for admission to any exhibit, grandstand,
entertainment or other feature conducted within the fairgrounds
by persons other than those eligible for the exemption under
subsection (1) of this section shall be taxable under the
provisions of sections 33 to 42 of this 2001 Act, except as
otherwise provided by law. + }
SECTION 52. { + Exemptions--Amounts received by hop growers or
dealers for processed hops shipped outside the state. (1) The tax
imposed by sections 33 to 42 of this 2001 Act does not apply to
amounts received by hop growers or dealers for hops that are
shipped outside the State of Oregon for first use, if the hops
have been processed into extract, pellets or powder in this
state.
(2) This section does not exempt a processor or warehouser from
taxation under sections 33 to 42 of this 2001 Act on amounts
charged for processing or warehousing. + }
SECTION 53. { + Exemptions--Athletic exhibitions. The tax
imposed by sections 33 to 42 of this 2001 Act does not apply to
any person with respect to the business of conducting boxing
contests and sparring or wrestling matches and exhibitions for
the conduct of which a license must be secured from the Oregon
State Boxing and Wrestling Commission. + }
SECTION 54. { + Exemptions--Racing. The tax imposed by
sections 33 to 42 of this 2001 Act does not apply to any person
with respect to the business of conducting race meets for the
conduct of which a license must be secured from the Oregon Racing
Commission. + }
SECTION 55. { + Exemptions--Ride sharing. The tax imposed by
sections 33 to 42 of this 2001 Act does not apply to any funds
received in the course of commuter ride sharing or ride sharing
for the elderly or the handicapped. + }
SECTION 56. { + Exemptions--Employees. The tax imposed by
sections 33 to 42 of this 2001 Act does not apply to any person
with respect to employment in the capacity of an employee or
servant as distinguished from that of an independent
contractor. + }
SECTION 57. { + Exemptions--Nonprofit organizations that issue
debt for student loans or that are guarantee agencies. The tax
imposed by sections 33 to 42 of this 2001 Act does not apply to
gross income received by nonprofit organizations exempt from
federal income tax under section 501(c)(3) of the Internal
Revenue Code of 1954, as amended, that are guarantee agencies
under the federal Guaranteed Student Loan Program or its
successor or that issue debt to provide or acquire student
loans. + }
SECTION 58. { + Exemptions--Certain fraternal and beneficiary
organizations. (1) The tax imposed by sections 33 to 42 of this
2001 Act does not apply to fraternal benefit societies or
fraternal fire insurance associations nor to beneficiary
corporations or societies, if such beneficiary corporations or
societies provide in their bylaws for the payment of death
benefits.
(2) The exemption granted by this section is limited to gross
income from premiums, fees, assessments, dues or other charges
directly attributable to the insurance or death benefits provided
by such societies, associations or corporations. + }
SECTION 59. { + Exemptions--Certain corporations furnishing
aid and relief. The tax imposed by sections 33 to 42 of this 2001
Act does not apply to the gross sales or the gross income
received by corporations that have been incorporated under any
act of the Congress of the United States of America for the
principal purposes of:
(1) Furnishing volunteer aid to members of the Armed Forces of
the United States.
(2) Carrying on a system of national or international relief.
(3) Providing relief in mitigating the sufferings caused by
pestilence, famine, fire, floods or other national calamities.
(4) Devising and carrying out measures for preventing
sufferings caused by pestilence, famine, fire, floods and other
national calamities. + }
SECTION 60. { + Exemptions--Operation of sheltered workshops.
(1) The tax imposed by sections 33 to 42 of this 2001 Act does
not apply to income received from the Department of Human
Services for the cost of care, maintenance, support and training
of persons with developmental disabilities at nonprofit group
training homes or to the business activities of nonprofit
organizations from the operation of sheltered workshops.
(2) As used in this section, 'operation of sheltered workshops'
means performance of business activities of any kind on or off
the premises of such nonprofit organizations that are performed
for the primary purpose of:
(a) Providing gainful employment or rehabilitation services to
individuals with disabilities as an interim step in the
rehabilitation process for those who cannot be readily absorbed
into the competitive labor market or during such time as
employment opportunities for them in the competitive labor market
do not exist; or
(b) Providing evaluation and work adjustment services for
individuals with disabilities. + }
SECTION 61. { + Exemptions--Amounts derived from sale of real
estate. (1) The tax imposed by sections 33 to 42 of this 2001 Act
does not apply to gross receipts derived from the sale of real
estate.
(2) This section does not allow a deduction of amounts received
as commissions from the sale of real estate, nor as fees,
handling charges, discounts, interest or similar financial
charges resulting from, or relating to, real estate
transactions. + }
SECTION 62. { + Exemptions--Certain materials printed in
school district, educational service district, library or library
district printing facilities. The tax imposed by sections 33 to
42 of this 2001 Act does not apply to school districts,
educational service districts, libraries or library districts
with respect to materials printed in the printing facilities of
the school district, educational service district, library or
library district, and used solely for school district,
educational service district, library or library district
purposes. + }
SECTION 63. { + Exemptions--Certain materials printed in
county, city or town printing facilities. The tax imposed by
sections 33 to 42 of this 2001 Act does not apply to any county,
city, town or municipal corporation with respect to materials
printed in the printing facilities of the county, city, town or
municipal corporation and used solely for county, city, town or
municipal corporation purposes. + }
SECTION 64. { + Exemptions--Credit unions. The tax imposed by
sections 33 to 42 of this 2001 Act does not apply to the gross
income of credit unions organized under the laws of this state or
the United States. + }
SECTION 65. { + Exemptions--Hatching eggs and poultry. The tax
imposed by sections 33 to 42 of this 2001 Act does not apply to
amounts derived by persons engaged in the production and sale of
hatching eggs or poultry for use in the production for sale of
poultry or poultry products. + }
SECTION 66. { + Exemptions--Sand, gravel and rock taken from
county or city pits or quarries--Processing and handling costs.
(1) The tax imposed by sections 33 to 42 of this 2001 Act does
not apply to:
(a) The cost of, or charges for, labor and services performed
in respect to the mining, sorting, crushing, screening, washing,
hauling or stockpiling of sand, gravel or rock, when such sand,
gravel or rock is taken from a pit or quarry that is owned by or
leased to a county or city and such sand, gravel or rock is
either stockpiled in a pit or quarry for placement, or is placed
on the street, road, place or highway of the county or city by
the county or city; or
(b) The cost of, or charges for, such labor and services if any
such sand, gravel or rock is sold by the county or city to a
county or city at actual cost for placement on a publicly owned
street, road, place or highway.
(2) The exemption granted in this section does not apply to the
cost of, or charges for, such labor and services if the sand,
gravel or rock is used for other than public road purposes or is
sold otherwise than as stated in this section. + }
SECTION 67. { + Exemptions--Amounts or value paid or
contributed to any county, city, town, political subdivision or
municipal corporation for capital facilities. (1) The tax imposed
by sections 33 to 42 of this 2001 Act does not apply to amounts
or value paid or contributed to any county, city, town, political
subdivision or municipal or quasi-municipal corporation of the
State of Oregon representing payments of special assessments or
installments thereof and interests and penalties thereon, charges
in lieu of assessments, or any other charges, payments or
contributions representing a share of the cost of capital
facilities constructed or to be constructed or for the retirement
of obligations and payment of interest thereon issued for capital
purposes.
(2) Service charges are not included in this exemption even
when used wholly or in part for capital purposes. + }
SECTION 68. { + Exemptions--Grants by United States Government
or state to municipal corporations or political subdivisions. The
tax imposed by sections 33 to 42 of this 2001 Act does not apply
to grants received from the state or the United States Government
by municipal corporations or political subdivisions of the State
of Oregon. + }
SECTION 69. { + Exemptions--County, city, town, school
district or fire district activity. (1) The tax imposed by
sections 33 to 42 of this 2001 Act does not apply to any county,
city, town, school district or fire district activity, regardless
of how financed.
(2) Nothing contained in this section limits the authority of
the Legislative Assembly to authorize the imposition of such tax
prospectively upon such activities as the Legislative Assembly
shall specifically designate. + }
SECTION 70. { + Exemptions--Sales by certain out-of-state
persons to or through direct seller's representatives. (1) The
tax imposed by sections 33 to 42 of this 2001 Act does not apply
to any person with respect to gross income derived from the
business of making sales at wholesale or retail if such person:
(a) Does not own or lease real property within this state;
(b) Does not regularly maintain a stock of tangible personal
property in this state for sale in the ordinary course of
business;
(c) Is not a corporation incorporated under the laws of this
state; and
(d) Makes sales in this state exclusively to or through a
direct sales representative.
(2) As used in this section, 'direct sales representative '
means a person who buys consumer products on a buy-sell basis or
a deposit-commission basis for resale by the buyer or any other
person in the home or otherwise than in a permanent retail
establishment, or who sells, or solicits the sale of, consumer
products in the home or otherwise than in a permanent retail
establishment. In addition, for a person to qualify as a 'direct
sales representative':
(a) Substantially all of the remuneration paid to the person,
whether or not paid in cash, for the performance of services
described in this subsection must be directly related to sales or
other output, including the performance of services, rather than
the number of hours worked; and
(b) The services performed by the person must be performed
pursuant to a written contract between the person and the party
for whom the services are performed and the contract must provide
that the person will not be treated as an employee with respect
to the services for federal tax purposes. + }
SECTION 71. { + Exemptions--Accommodation sales. (1) The tax
imposed by sections 33 to 42 of this 2001 Act does not apply to
sales for resale by persons regularly engaged in the business of
selling the type of property sold to other persons similarly
engaged in the business of selling the type of property sold
where:
(a) The amount paid by the buyer does not exceed the amount
paid by the seller in the acquisition of the article; and
(b) The sale is made as an accommodation to the buyer to enable
the buyer to fill a bona fide existing order of a customer or is
made within 14 days to reimburse in kind a previous accommodation
sale by the buyer to the seller.
(2) The exemption granted by this section applies to sales by a
wholly owned subsidiary of a person making sales at retail when
the parent corporation shall have paid the tax imposed under
sections 33 to 42 of this 2001 Act. + }
SECTION 72. { + Deductions--Membership fees and certain
service fees by nonprofit youth organization. (1) In computing
gross receipts under sections 1 to 131 of this 2001 Act, there
may be deducted all amounts received by a nonprofit youth
organization. This includes but is not limited to:
(a) Membership fees or dues, irrespective of the fact that the
payment of the membership fees or dues to the organization may
entitle its members, in addition to other rights or privileges,
to receive services from the organization or to use the
organization's facilities.
(b) Fees or dues from members of the organization for camping
and recreational services provided by the organization or for the
use of the organization's camping and recreational facilities.
(2) As used in this section, 'nonprofit youth organization '
means a nonprofit organization engaged in character building of
youth. + }
SECTION 73. { + Deductions--Investments--Dividends from
subsidiary corporations. (1) In computing gross receipts under
sections 1 to 131 of this 2001 Act, there may be deducted the
amounts derived from investments or the use of moneys as such.
The deduction allowed by this section does not apply to persons
engaging in banking, loan, security or other financial
businesses.
(2) In the computation of gross receipts under sections 1 to
131 of this 2001 Act, there may be deducted the amounts derived
as dividends by a parent from its subsidiary corporations. + }
SECTION 74. { + Deductions--Fees, dues, charges. (1) In
computing gross receipts under sections 1 to 131 of this 2001
Act, the following may be deducted:
(a) Amounts derived from bona fide initiation fees, dues,
contributions, donations and tuition fees.
(b) Charges made by a nonprofit trade or professional
organization for attending or occupying space at a trade show,
convention or educational seminar sponsored by the nonprofit
trade or professional organization, when the trade show,
convention or educational seminar is not open to the general
public.
(c) Charges made for operation of privately operated
kindergartens and endowment funds.
(2) This section does not exempt any person, association or
society from tax liability upon selling tangible personal
property or upon providing facilities or services for which a
special charge is made to members or others.
(3) If dues are in exchange for any significant amount of goods
or services rendered by the recipient thereof to members without
any additional charge to the member, or if the dues are graduated
upon the amount of goods or services rendered, the value of such
goods or services is not considered a deduction. + }
SECTION 75. { + Deductions--Cash discount taken by purchaser.
(1) In computing gross receipts under sections 1 to 131 of this
2001 Act, there may be deducted the amount of cash discount
actually taken by the purchaser.
(2) The deduction under this section is not allowed in arriving
at gross receipts under the extractive or manufacturing
classifications with respect to articles produced or
manufactured, the reported values of which, for the purposes of
this tax, have been computed according to section 104 of this
2001 Act. + }
SECTION 76. { + Deductions--Credit losses of accrual basis
taxpayers. In computing gross receipts under sections 1 to 131 of
this 2001 Act, there may be deducted the amount of credit losses
actually sustained by taxpayers whose regular books of account
are kept upon an accrual basis. + }
SECTION 77. { + Deductions--Motor vehicle fuel taxes. In
computing gross receipts under sections 1 to 131 of this 2001
Act, there may be deducted so much of the sale price of motor
vehicle fuel as constitutes the amount of tax imposed by the
state or the United States Government upon the sale thereof. + }
SECTION 78. { + Deductions--Nontaxable business. In computing
gross receipts under sections 1 to 131 of this 2001 Act, there
may be deducted amounts derived from business that the state is
prohibited from taxing under the Constitution of this state or
the Constitution or laws of the United States. + }
SECTION 79. { + Deductions--Compensation for receiving,
washing, sorting and packing of horticultural products for person
exempt under section 50 of this 2001 Act--Materials and supplies
used. In computing the amount of tax due under sections 33 to 42
of this 2001 Act, there may be deducted from the measure of tax
any amount derived by any person as compensation for the
receiving, washing, sorting and packing of fresh perishable
horticultural products and the material and supplies used therein
when performed for the person exempted in section 50 of this 2001
Act, either as agent or as independent contractor. + }
SECTION 80. { + Deductions--Compensation for services to
patients and attendant sales of prescription drugs by publicly
operated hospitals. In computing gross receipts under sections 1
to 131 of this 2001 Act, there may be deducted amounts derived as
compensation for services rendered or to be rendered to patients
or from sales of prescription drugs furnished as an integral part
of services rendered to patients by a hospital devoted to the
care of human beings with respect to the prevention or treatment
of disease, sickness or suffering, when such hospital is operated
by the United States or any of its instrumentalities, or by this
state or any of its political subdivisions. + }
SECTION 81. { + Deductions--Compensation for services to
patients and attendant sales of prescription drugs by nonprofit
hospitals, nonprofit kidney dialysis facilities, nursing homes
and homes for unwed mothers operated by religious or charitable
organizations. (1) In computing gross receipts under sections 1
to 131 of this 2001 Act, there may be deducted amounts derived as
compensation for services rendered to patients or from sales of
prescription drugs furnished as an integral part of services
rendered to patients by a hospital that is operated as a
nonprofit corporation, a kidney dialysis facility operated as a
nonprofit corporation, whether or not operated in connection with
hospitals, nursing homes and homes for unwed mothers operated as
religious or charitable organizations.
(2) The deduction from gross receipts granted by this section
is allowed only if:
(a) No part of the net earnings received by such an institution
inures directly or indirectly to any person other than the
institution entitled to deduction; and
(b) The hospital building is entitled to exemption from
taxation under the property tax laws of this state. + }
SECTION 82. { + Deductions--Compensation received by a
political subdivision from another political subdivision for
services taxable under section 42 of this 2001 Act. In computing
gross receipts under sections 1 to 131 of this 2001 Act, there
may be deducted amounts derived by a political subdivision of the
State of Oregon from another political subdivision of the State
of Oregon as compensation for services that are within section 42
of this 2001 Act. + }
SECTION 83. { + Deductions--Interest on investments or loans
secured by mortgages or deeds of trust. In computing gross
receipts under sections 1 to 131 of this 2001 Act, there may be
deducted by those engaged in banking, loan, security or other
financial businesses, amounts derived from interest received on
investments or loans primarily secured by first mortgages or
trust deeds on nontransient residential properties. + }
SECTION 84. { + Deductions--Interest on obligations of the
state and its political subdivisions and municipal corporations.
In computing gross receipts under sections 1 to 131 of this 2001
Act, there may be deducted by those engaged in banking, loan,
security or other financial businesses, amounts derived from
interest paid on all obligations of the State of Oregon and its
political subdivisions and municipal corporations organized
pursuant to the laws thereof. + }
SECTION 85. { + Deductions--Interest on loans to farmers and
ranchers, producers or harvesters of aquatic products, or their
cooperatives. In computing gross receipts under sections 1 to 131
of this 2001 Act, there may be deducted amounts derived as
interest on loans to bona fide farmers or ranchers, producers or
harvesters of aquatic products, or their cooperatives by a
lending institution that is owned exclusively by its borrowers or
members and that is engaged solely in the business of making
loans and providing finance-related services to bona fide farmers
and ranchers, producers or harvesters of aquatic products, their
cooperatives, rural residents for housing or persons engaged in
furnishing farm-related or aquatic-related services to these
individuals or entities. + }
SECTION 86. { + Deductions--Manufacturing activities completed
outside the United States. In computing gross receipts under
sections 1 to 131 of this 2001 Act, there may be deducted by
persons subject to payment of the tax on manufacturers pursuant
to section 36 of this 2001 Act the value of articles to the
extent of manufacturing activities completed outside the United
States, if:
(1) Any additional processing of such articles in this state
consists of minor final assembly;
(2) In the case of domestic manufacture of such articles, the
manufacturing can be and normally is done at the place of initial
manufacture;
(3) The total cost of the minor final assembly does not exceed
two percent of the value of the articles; and
(4) The articles are sold and shipped outside the state. + }
SECTION 87. { + Deductions--Reimbursement for accommodation
expenditures by funeral homes. In computing gross receipts under
sections 1 to 131 of this 2001 Act, there may be deducted that
portion of amounts received by any funeral home licensed to do
business in this state which is received as reimbursements for
expenditures, for goods supplied or services rendered by a person
not employed by or affiliated or associated with the funeral
home, and advanced by such funeral home as an accommodation to
the persons paying for a funeral, so long as such expenditures
and advances are billed to the persons paying for the funeral at
only the exact cost and are separately itemized in the billing
statement delivered to such persons. + }
SECTION 88. { + Deductions--Compensation from public entities
for health or social welfare services--Exception. (1) In
computing gross receipts under sections 1 to 131 of this 2001
Act, there may be deducted amounts received from the United
States or any instrumentality or from the State of Oregon or any
municipal corporation or political subdivision as compensation
for, or to support, health or social welfare services rendered by
a health or social welfare organization or by a municipal
corporation or political subdivision.
(2) The deductions granted under this section are not allowed
for amounts that are received under an employee benefit plan. + }
SECTION 89. { + ' Health or social welfare organization'
defined for section 88 of this 2001 Act. Conditions for
exemption--'Health or social welfare services' defined. (1) As
used in section 88 of this 2001 Act, 'health or social welfare
organization':
(a) Means an organization, including any community action
council:
(A) That renders health or social welfare services; and
(B) That is a not-for-profit corporation, and is managed by a
governing board of not less than eight individuals, none of whom
is a paid employee of the organization.
(b) Does not include a corporation providing professional
services.
(2) In addition, a corporation in order to be exempt under
section 88 of this 2001 Act shall satisfy the following
conditions:
(a) No part of its income may be paid directly or indirectly to
its members, stockholders, officers, directors or trustees except
in the form of services rendered by the corporation in accordance
with its purposes and bylaws.
(b) Salary or compensation paid to its officers and executives
must be only for actual services rendered, and at levels
comparable to the salary or compensation of like positions within
the public service of the state.
(c) Assets of the corporation must be irrevocably dedicated to
the activities for which the exemption is granted and, on the
liquidation, dissolution or abandonment by the corporation, may
not inure directly or indirectly to the benefit of any member or
individual except a nonprofit organization, association or
corporation that also would be entitled to the exemption.
(d) The corporation must be duly licensed or certified where
licensing or certification is required by law or regulation.
(e) The amounts received qualifying for exemption must be used
for the activities for which the exemption is granted.
(f) Services must be available regardless of race, color,
national origin or ancestry.
(g) The Director of the Department of Revenue shall have access
to the books of the corporation in order to determine whether the
corporation is exempt from taxes within the intent of section 88
of this 2001 Act and this section.
(3) As used in this section and section 88 of this 2001 Act, '
health or social welfare services' includes and is limited to the
following:
(a) Mental health, drug or alcoholism counseling or treatment.
(b) Family counseling.
(c) Health care services.
(d) Therapeutic, diagnostic, rehabilitative or restorative
services for the care of the sick, aged or physically,
developmentally or emotionally disabled individuals.
(e) Activities that are for the purpose of preventing or
ameliorating juvenile delinquency or child abuse, including
recreational activities for those purposes.
(f) Care of orphans or foster children.
(g) Day care of children.
(h) Employment development, training or placement.
(i) Legal services to the indigent.
(j) Weatherization assistance or minor home repair for
low-income homeowners or renters.
(k) Assistance to low-income homeowners or renters to offset
the cost of home heating energy through direct benefits to
eligible households or to fuel vendors on behalf of eligible
households.
(L) Community services to low-income individuals, families or
groups that are designed to have a measurable and potentially
major impact on causes of poverty in communities of the
state. + }
SECTION 90. { + Deductions--Repair, maintenance and
replacement of residential structures and commonly held
property--Eligible organizations. (1) In computing gross receipts
under sections 1 to 131 of this 2001 Act, there may be deducted
amounts used solely for repair, maintenance, replacement,
management or improvement of residential structures and commonly
held property, but excluding property where fees or charges are
made for use by the public who are not guests accompanied by a
member, that are derived by:
(a) A cooperative housing association, corporation or
partnership from a person who resides in a structure owned by the
cooperative housing association, corporation or partnership;
(b) An association of property owners from an owner of fee
simple property that shares with property held by other
association members either:
(A) Common structural components, including but not limited to
walls; or
(B) General common elements as defined in ORS 100.005; or
(c) An association of owners of residential property from a
person who is a member of the association.
(2) To qualify for the deductions under this section:
(a) The salary or compensation paid to officers, managers or
employees must be only for actual services rendered and at levels
comparable to the salary or compensation of like positions within
the county wherein the property is located;
(b) Dues, fees or assessments in excess of amounts needed for
the purposes for which the deduction is allowed must be rebated
to the members of the association; and
(c) Assets of the association or organization must be
distributable to all members and must not inure to the benefit of
any single member or group of members. + } { +
(3) As used in this section:
(a) 'Association of owners of residential property' means any
organization of all the owners of residential property in a
defined area who all hold the same property in common within the
area.
(b) 'Commonly held property':
(A) Includes but is not limited to areas required for common
access such as reception areas, halls, stairways, parking areas,
recreation rooms, swimming pools and small parks or recreation
areas.
(B) Is not intended to include more grounds than are normally
required for common access in a residential area, or to include
such extensive areas as are required for golf courses,
campgrounds, hiking and riding areas and boating areas. + }
SECTION 91. { + Deductions--Artistic or cultural
organization--Compensation from United States or state for
artistic or cultural exhibitions, performances or programs. In
computing gross receipts under sections 1 to 131 of this 2001
Act, there may be deducted amounts received from the United
States or any instrumentality thereof or from the State of Oregon
or any municipal corporation or subdivision as compensation for,
or to support, artistic or cultural exhibitions, performances or
programs provided by an artistic or cultural organization for
attendance or viewing by the general public. + }
SECTION 92. { + Deductions--Artistic or cultural
organization--Tax under section 36 of this 2001 Act. (1) In
computing gross receipts under sections 1 to 131 of this 2001
Act, there may be deducted amounts received for the value of
articles for use in displaying art objects or presenting artistic
or cultural exhibitions, performances or programs.
(2) In computing gross receipts under sections 1 to 131 of this
2001 Act, there may be deducted by persons subject to payment of
the tax on manufacturing under section 36 of this 2001 Act the
value of articles to the extent manufacturing activities are
undertaken by an artistic or cultural organization solely for the
purpose of manufacturing articles for use by the organization in
displaying art objects or presenting artistic or cultural
exhibitions, performances or programs for attendance or viewing
by the general public. + }
SECTION 93. { + Deductions--Artistic or cultural
organization--Tuition charges for attending artistic or cultural
education programs. In computing gross receipts under sections 1
to 131 of this 2001 Act, there may be deducted amounts received
by artistic or cultural organizations as tuition charges for the
privilege of attending artistic or cultural education
programs. + }
SECTION 94. { + Deductions--Artistic or cultural
organization--Income from business activities. In computing gross
receipts under sections 1 to 131 of this 2001 Act, there may be
deducted those amounts received by an artistic or cultural
organization that represent income derived from business
activities conducted by the organization. + }
SECTION 95. { + ' Artistic or cultural organization' defined.
(1) As used in sections 91 to 94 of this 2001 Act, 'artistic or
cultural organization' means an organization that is organized
and operated exclusively for the purpose of providing artistic or
cultural exhibitions, presentations or performances, or cultural
or art education programs for viewing or attendance by the
general public. To qualify, the organization must be:
(a) A not-for-profit corporation; and
(b) Managed by a governing board of not less than eight
individuals, none of whom is a paid employee of the organization.
(2) In addition, to qualify for deduction or exemption from
taxation under sections 91 to 94 of this 2001 Act, the
corporation shall satisfy the following conditions:
(a) No part of its income may be paid directly or indirectly to
its members, stockholders, officers, directors or trustees except
in the form of services rendered by the corporation in accordance
with its purposes and bylaws.
(b) Salary or compensation paid to its officers and executives
must be only for actual services rendered, and at levels
comparable to the salary or compensation of like positions within
this state.
(c) Assets of the corporation must be irrevocably dedicated to
the activities for which the exemption is granted and, on their
liquidation, dissolution or abandonment by the corporation, may
not inure directly or indirectly to the benefit of any member or
individual except a nonprofit organization, association or
corporation that also would be entitled to the exemption.
(d) The corporation must be duly licensed or certified when
licensing or certification is required by law or regulation.
(e) The amounts received that qualify for exemption must be
used for the activities for which the exemption is granted.
(f) Services must be available regardless of race, color,
national origin or ancestry.
(g) The Director of the Department of Revenue shall have access
to the books of the corporation in order to determine whether the
corporation is exempt from taxes.
(3) As used in this section, 'artistic or cultural exhibitions,
presentations or performances, or cultural or art education
programs' is limited to:
(a) Exhibitions or presentations of works of art or objects of
cultural or historical significance, such as those commonly
displayed in art or history museums;
(b) Musical or dramatic performances or series of performances;
or
(c) Educational seminars or programs, or series of such
programs, offered by the organization to the general public on an
artistic, cultural or historical subject. + }
SECTION 96. { + Deductions--Sales of fuel for consumption
outside United States waters by vessels in foreign
commerce--Construction. In computing gross receipts under
sections 1 to 131 of this 2001 Act, there may be deducted amounts
derived from sales of fuel for consumption outside the
territorial waters of the United States by vessels used primarily
in foreign commerce. + }
{ +
CREDITS + }
SECTION 97. { + Credits for certain manufacturers. (1) In
computing the amount of tax due under sections 33 to 42 of this
2001 Act, there may be credited against the amount of the tax the
following items:
(a) For persons engaging in manufacturing activities defined in
section 29 of this 2001 Act, an amount not to exceed the tax
actually paid by the persons or lessors of the person or contract
vendors of the person, on materials, labor and services used in
the construction of new buildings or the enlarging of existing
buildings directly used in such activities, but not in the
renovation or repair of existing buildings.
(b) Where a building is used partly for manufacturing and
partly for other purposes, the applicable tax credit to be
determined by apportionment of the costs of construction under
such rules as the Department of Revenue shall provide.
(2) As used in this section, 'buildings' means only those
structures used to house or shelter manufacturing activities,
including the usual lighting, heating, ventilating and sanitary
plumbing facilities. In addition, 'buildings':
(a) Includes plant offices and warehouses or other storage
facilities for the storage of raw materials or finished goods
when such facilities are essential to, and an integral part of, a
factory, mill or manufacturing plant.
(b) Includes potlines and furnaces used directly in the
manufacturing of metals.
(c) Does not include manufacturing or industrial fixtures or
equipment such as tanks, conveyor systems, cranes, industrial
machinery and related facilities irrespective of whether such
fixtures or equipment are affixed to the realty.
(3) The credit under subsection (1) of this section shall be
allowable only against tax payable by the manufacturer and
measured by the value of products or gross receipts from sales of
articles, substances or commodities manufactured in this state,
and shall be allowable only against any tax payable that is
attributable to manufacturing occurring in the particular
factory, mill or manufacturing plant in which such buildings are
located.
(4) A tax credit that is claimed under this section may not be
deducted on any return until such claim has been approved by the
department or until 90 days after such claim has been submitted
to the department for approval. + }
SECTION 98. { + Persons taxable on multiple
activities--Credits. (1) Every person engaged in activities that
are within the purview of the provisions of two or more of
sections 35 to 42 of this 2001 Act shall be taxable under each
section that is applicable to the activities in which the person
is engaged.
(2) Persons taxable under section 37 or 40 of this 2001 Act are
allowed a credit against that tax for any:
(a) Manufacturing taxes paid with respect to the manufacturing
of products sold in this state; and
(b) Extracting taxes paid with respect to the extracting of
products sold in this state or ingredients of products sold in
this state. Extracting taxes taken as credit under subsection (3)
of this section may also be taken under this subsection, if
otherwise allowable under this subsection. The amount of the
credit may not exceed the tax liability arising under sections 33
to 42 of this 2001 Act with respect to the sale of those
products.
(3) Persons taxable under section 36 or 39 (4) of this 2001 Act
shall be allowed a credit against those taxes for any extracting
taxes paid with respect to extracting the ingredients of the
products so manufactured in this state. The amount of the credit
may not exceed the tax liability arising under section 36 or 39
(4) of this 2001 Act with respect to the manufacturing of those
products.
(4) Persons taxable under section 35, 36 or 39 (2), (3), (4),
(5) or (7) of this 2001 Act with respect to extracting or
manufacturing products in this state shall be allowed a credit
against those taxes for the following:
(a) Gross receipts taxes paid to another state with respect to
the sales of the products extracted or manufactured in this
state.
(b) Manufacturing taxes paid with respect to the manufacturing
of products using ingredients extracted in this state.
(c) Manufacturing taxes paid with respect to manufacturing
activities completed in another state for products manufactured
in this state. The amount of the credit may not exceed the tax
liability arising under sections 35 and 36 of this 2001 Act with
respect to the extraction or manufacturing of those products.
(5) As used in this section:
(a) 'Business' has the meaning given that term in section 3 of
this 2001 Act, notwithstanding the use of that term in the
context of describing taxes imposed by other states.
(b) 'Extracting tax' means a gross receipts tax imposed on the
act or privilege of engaging in business as an extractor, and
includes the tax imposed in section 35 of this 2001 Act and
similar gross receipts taxes paid to other states.
(c) 'Extractor' has the meaning given that term in section 13
of this 2001 Act, notwithstanding the use of that term in the
context of describing taxes imposed by other states.
(d) 'Gross receipts tax' means a tax:
(A) That is imposed on or measured by the gross volume of
business, in terms of gross receipts or in other terms, and in
the determination of which the deductions allowed would not
constitute an income tax or value-added tax; and
(B) That is not, pursuant to law or custom, separately stated
from the sales price.
(e) 'Manufacturer' has the meaning given that term in section
20 of this 2001 Act, notwithstanding the use of that term in the
context of describing taxes imposed by other states.
(f) 'Manufacturing tax' means a gross receipts tax imposed on
the act or privilege of engaging in business as a manufacturer,
and includes:
(A) The taxes imposed in sections 36 and 39 (2), (3), (4), (5)
and (7) of this 2001 Act; and
(B) Similar gross receipts taxes paid to other states.
(g) 'State' means:
(A) The State of Oregon;
(B) A state of the United States other than Oregon, or any
political subdivision of such other state;
(C) The District of Columbia; or
(D) Any foreign country or political subdivision thereof. + }
SECTION 99. { + Credit for taxes paid on business
inventories--Verification of payment--Penalty. (1) Each taxpayer
requesting gross receipts tax credit shall verify, by completing
and signing a form prepared and made available by the Department
of Revenue, payment of business inventory taxes on which such
credit is based.
(2) Any person signing a false claim with the intent to defraud
or evade the payment of any tax due under sections 33 to 42 this
2001 Act shall be guilty of a misdemeanor and, upon conviction
thereof, be fined not more than $10,000 or imprisoned for not
more than one year, or both, together with costs of
prosecution. + }
SECTION 100. { + Credit for taxes paid on business
inventories--Falsification--Penalty and interest. If the
Department of Revenue finds that a taxpayer received a tax credit
under section 99 of this 2001 Act based on false or fraudulent
information supplied by the taxpayer, the amount of taxes avoided
thereby shall be collected together with statutory interest
thereon. In addition, a penalty equal to 25 percent of the tax
avoided shall be due thereon. + }
SECTION 101. { + Section 102 of this 2001 Act is added to and
made a part of ORS chapter 315. + }
SECTION 102. { + Income tax, credit for or against. (1) A
deduction may not be taken for gross receipts taxes paid pursuant
to sections 1 to 131 of this 2001 Act in determining taxable
income under ORS chapter 316, 317 or 318. Tax assessed pursuant
to sections 1 to 131 of this 2001 Act shall be added to federal
taxable income to the extent subtracted in calculating federal
taxable income.
(2) A deduction may not be taken for taxes paid pursuant to ORS
chapter 316, 317 or 318 in determining gross receipts tax
liability pursuant to sections 1 to 131 of this 2001 Act.
(3) There shall be allowed as a credit against state income or
excise tax liability for income derived from business activity
within this state the amount of tax imposed in sections 33 to 42
of this 2001 Act on business activity within this state not to
exceed the amount of state income or excise tax liability.
(4) 'Income derived from business activity within this state'
means income generating activity for which a deduction of
expenses could be made under section 162 of the Internal Revenue
Code, to the extent attributable to this state under the
apportionment guidelines set forth in sections 14 and 105 of this
2001 Act.
(5) A credit granted pursuant to subsection (3) of this section
must be used in the tax year earned and may not be carried
forward or backward for use in any other tax year. + }
SECTION 103. { + Tax in addition to other taxes. (1) The gross
receipts tax paid pursuant to sections 1 to 131 of this 2001 Act
is in addition to and not in lieu of any other taxes, fees or
other charges imposed by this state or any unit of local
government.
(2) Notwithstanding ORS 323.030, 323.640, 462.100, 471.725,
471.730, 471.745, 731.840, 748.414 or 803.585 or other law, the
gross receipts tax shall apply to extracting, manufacturing,
wholesaling services, retailing services or related activities as
if those provisions did not exist. + }
SECTION 104. { + Value of products, how determined. (1) The
value of products, including by-products, extracted or
manufactured shall be determined by the gross receipts derived
from the sale thereof whether such sale is at wholesale or at
retail, to which shall be added all subsidies and bonuses
received from the purchaser or from any other person with respect
to the extraction, manufacture or sale of such products or
by-products by the seller.
(2) The value of a product does not include the value of
products, including by-products, extracted or manufactured for
commercial or industrial use that are shipped, transported or
transferred out of the state, or to another person, without prior
sale, or that are sold under circumstances such that the gross
receipts from the sale are not indicative of the true value of
the subject matter of the sale.
(3) The value determined in subsections (1) and (2) of this
section shall correspond as nearly as possible to the gross
receipts from sales in this state of similar products of like
quality and character, and in similar quantities, by other
taxpayers, plus the amount of subsidies or bonuses ordinarily
payable by the purchaser or by any third person with respect to
the extraction, manufacture or sale of such products.
(4) The value of a product manufactured or produced as a
prototype for the development of a new or improved product shall
correspond:
(a) To the retail selling price of such new or improved product
when first offered for sale; or
(b) To the value of materials incorporated into the prototype
in cases in which the new or improved product is not offered for
sale. The Department of Revenue shall prescribe uniform and
equitable rules for the purpose of ascertaining such values. + }
SECTION 105. { + Business within and without state. (1) Any
person rendering services taxable under section 42 of this 2001
Act and maintaining places of business both within and without
this state that contribute to the rendition of such services
shall, for the purpose of computing gross receipts tax liability
under section 42 of this 2001 Act, apportion to this state that
portion of gross income that is derived from services rendered
within this state. Where such apportionment cannot be accurately
made by separate accounting methods, the taxpayer shall apportion
to this state that proportion of total income that the cost of
doing business within this state bears to the total cost of doing
business both within and without this state.
(2) Notwithstanding the provisions of subsection (1) of this
section, persons doing business both within and without this
state who receive gross income from service charges, relating to
amounts charged for granting the right or privilege to make
deferred or installment payments, or who receive gross income
from engaging in business as financial institutions, relating to
city taxes on financial institutions, shall apportion or allocate
gross income taxable under section 42 of this 2001 Act to this
state pursuant to rules promulgated by the Department of Revenue
consistent with uniform rules for apportionment or allocation
developed by the states.
(3) The department shall by rule provide a method or methods of
apportioning or allocating gross income derived from sales of
telephone services taxed under sections 33 to 42 of this 2001
Act, if the gross receipts from sales subject to tax under
sections 33 to 42 of this 2001 Act do not fairly represent the
extent of the taxpayer's income attributable to this state. The
rules shall be, to the extent feasible, consistent with the
methods of apportionment contained in this section and shall
require the consideration of those facts, circumstances and
apportionment factors as will result in an equitable and
constitutionally permissible division of the services. + }
SECTION 106. { + Resale certificate--Burden of proof. Unless a
seller has taken from the purchaser a resale certificate signed
by and bearing the name, address and registration number of the
purchaser to the effect that the property or service was
purchased for resale, or unless the nature of the transaction is
clearly shown as a sale at wholesale by the books and records of
the taxpayer in such other manner as the Department of Revenue
shall by rule provide, the burden of proving that a sale of
tangible personal property, or of telephone service as defined in
section 8 of this 2001 Act, was not a sale at retail shall be
upon the seller. + }
SECTION 107. { + Sales in own name--Sales as agent. (1) Every
consignee, bailee, factor or auctioneer having either actual or
constructive possession of tangible personal property, or having
possession of the documents of title thereto, with power to sell
such tangible personal property in the name of the consignee,
bailee, factor or auctioneer, and actually so selling, shall be
deemed the seller of such tangible personal property within the
meaning of sections 1 to 131 of this 2001 Act. Further, the
consignor, bailor, principal or owner shall be deemed a seller of
such property to the consignee, bailee, factor or auctioneer.
(2) The burden shall be upon the taxpayer in every case to
establish the fact that the taxpayer is not engaged in the
business of selling tangible personal property but is acting
merely as broker or agent in promoting sales for a principal.
(3) Such claim will be allowed only when the accounting records
of the taxpayer are kept in such manner as the Department of
Revenue shall adopt by rule. + }
SECTION 108. { + Tax part of operating overhead. It is not the
intention of the Oregon Gross Receipts Tax Act that the taxes
herein levied upon persons engaging in business be construed as
taxes upon the purchasers or customers, but that such taxes shall
be levied upon, and collectible from, the person engaging in the
business activities herein designated in sections 33 to 42 of
this 2001 Act and that such taxes shall constitute a part of the
operating overhead of such persons. + }
{ +
PROCEDURE + }
SECTION 109. { + Registration. (1) Any person who engages in
business in this state or who is required to collect the gross
receipts tax shall register with the Department of Revenue as
provided and subject to sections 109 to 115 of this 2001 Act. Any
other person may register with the department to collect the tax
if the person furnishes adequate security to ensure collection
and remission of the tax to the department.
(2) Each person described in subsection (1) of this section
shall apply for and obtain from the department a certificate of
registration for the principal or main place of business of the
person and a separate certificate of registration for any other
business location of the person in this state.
(3) The application shall contain the names of the persons who
have an interest in the business, their addresses, the address of
the principal or main place of business and of any other business
location, and other information as reasonably required by the
department.
(4) No fee need accompany the application. + }
SECTION 110. { + Certificate of registration. (1) The
Department of Revenue shall examine the application and, if the
information contained in the application is complete and
accurate, shall issue an original registration certificate for
the principal or main place of business and a branch registration
certificate for each additional business location.
(2)(a) Each registration certificate issued shall be numbered
and shall show the name, residence, place and character of
business of the person, the business location for which it is
issued and any other information required by the department. The
registration certificate issued for a business location shall be
displayed at the location in a conspicuous place.
(b) A registration certificate shall be personal and not
assignable or transferable.
(c) No fee shall be charged for issuance of a registration
certificate.
(3) If the principal or main place of business is outside this
state, the department shall issue the original registration
certificate for that location. The department shall issue a
branch registration certificate for each business location within
this state.
(4) The department may, but need not, consider as a separate
business location or place of business, any store, mercantile,
market, outlet, shop, emporium, mart, establishment, office,
studio, stand, booth, stall, site, vending machine or other
location. + }
SECTION 111. { + Duration, suspension, revocation. (1) A
registration shall be valid and in effect for the period during
which the person registered engages in business at the place
indicated by the registration certificate and pays the gross
receipts tax or until the registration is suspended, revoked or
canceled.
(2)(a) Except in a case of loss, theft, destruction, damage or
as otherwise provided by rule, if the person registered or a
business location changes, the registration certificate must be
returned to the Department of Revenue and, if applicable, an
application made for a new or replacement certificate.
(b) Except as provided in paragraph (c) of this subsection, a
change in the person registered occurs if the business is sold,
transferred or dissolved, a change in ownership occurs or the
department otherwise determines that the person registered has
changed.
(c) A change in the person registered does not occur:
(A) Upon transfer of assets to an assignee for the benefit of
creditors or upon the appointment of a receiver or trustee in
bankruptcy.
(B) Upon the death of a sole proprietor in those cases where
there is a continuous operation of the business by the personal
representative or trustee.
(C) Upon any other transfer described by rule adopted by the
department.
(3) The department may suspend or revoke the registration of
any person who fails to pay the gross receipts tax or who fails
to comply with any provision of sections 1 to 131 of this 2001
Act. The department shall not issue a new registration
certificate to the person unless the department is satisfied that
the person will comply with sections 1 to 131 of this 2001 Act
and any rules of the department adopted thereunder. If the
department suspends or revokes the registration of a person, the
person shall be entitled to a hearing. The hearing shall be
conducted as a contested case hearing pursuant to the applicable
provisions of ORS 183.413 to 183.470. Judicial review of an order
issued under this subsection shall be as provided in ORS 183.480
to 183.497. + }
SECTION 112. { + Temporary certificate. A temporary
registration certificate may be issued to any person who engages
in business in this state under rules adopted by the Department
of Revenue. + }
SECTION 113. { + Inactive. The Department of Revenue may
cancel a registration if the person has not incurred any
liability or obligation under the gross receipts tax for a period
of at least two years or for any other reason that has been
determined by the department by rule to be an appropriate reason.
Rules adopted by the department shall afford an opportunity to
the person to demonstrate that registration should continue or
resume. + }
SECTION 114. { + Resale certificates, validity. (1) On or
after the operative date of the Oregon Gross Receipts Tax Act, a
person may engage in business in this state only if the person
and the location of the business are registered with the
Department of Revenue.
(2) For purposes of proper administration of the gross receipts
tax and to prevent evasion, it is presumed that the entire gross
receipts from sales or sales price is the measure of the tax
until the contrary is established. The burden of proving that a
sale is not a sale at retail is upon the person who makes the
sale unless the person takes from the purchaser a resale
certificate to the effect that the property or service is
purchased for resale.
(3) The resale certificate of a person who is engaged in the
business of selling tangible personal property or services at
retail in this state is valid only if the person is registered
with the department and the registration has not been suspended,
revoked or canceled.
(4) The department shall prescribe by rule the contents and
proper format for a resale certificate. + }
SECTION 115. { + Records. Every person engaging in business in
this state shall keep those records, receipts, invoices and other
pertinent papers in a form required by the Department of
Revenue. + }
{ +
RETURNS AND PAYMENTS + }
SECTION 116. { + Returns, payment. (1) The gross receipts tax
is due and payable to the Department of Revenue as follows:
(a) If the tax may reasonably be expected to be $500 or less
for the entire calendar year, the tax is due and payable to the
department not later than the last day of the calendar month next
following the calendar year.
(b) If the tax may reasonably be expected to be more than $500,
but $5,000 or less for the entire calendar year, the tax is due
and payable to the department semiannually not later than the
last day of the calendar month next following June 30 and
December 31.
(c) If the tax may reasonably be expected to be more than
$5,000, but $12,500 or less for the entire calendar year, the tax
is due and payable to the department quarterly not later than the
last day of the calendar month next following the calendar
quarter.
(d) If the tax may reasonably be expected to be more than
$12,500 for the entire calendar year, the tax is due and payable
to the department monthly as set forth in section 117 of this
2001 Act.
(2) The gross receipts tax is due and payable as provided in
this section without regard to any extension of time for filing a
return. + }
SECTION 117. { + Returns, filing. (1) Not later than the last
day of the calendar month next following the applicable tax
period described in section 116 of this 2001 Act, a return for
the preceding tax period shall be filed with the Department of
Revenue in a form prescribed by the department.
(2) For purposes of the gross receipts tax, a return shall be
filed by every person engaged in business in this state.
(3) Returns must be signed by the person required to file the
return, or by a duly authorized agent, subject to penalties for
false swearing.
(4) The department for good cause may extend for a period not
to exceed one month the time for making any return. If the time
for filing a return is extended at the request of a taxpayer,
interest on any unpaid tax at the rate established under ORS
305.220, for each month or fraction of a month from the time the
return was originally required to be filed to the time of
payment, shall be added and paid. + }
SECTION 118. { + Accounting, installment payment. (1) Subject
to rules adopted by the Department of Revenue, the gross receipts
tax becomes payable in accordance with the system of accounting
regularly employed by the retailer.
(2) In the case of a lease, contract, sale or arrangement
described in section 4216(c) of the Internal Revenue Code, rules
similar to the rules of section 4217(e)(2) of the Internal
Revenue Code shall apply for purposes of the gross receipts tax.
(3) A person is entitled to a credit or refund for tax
previously paid on debts that are deductible as worthless for
federal income tax purposes. + }
SECTION 119. { + Persons outside state. Any person engaged in
business within or outside this state may be required or
permitted to file a return and pay the gross receipts tax under
rules that shall be adopted by the Department of Revenue. + }
{ +
COLLECTION + }
SECTION 120. { + (1) The gross receipts tax is a revenue or
tax law of this state and shall be administered by the Department
of Revenue.
(2) Every person engaged in business in this state shall keep
the books and records that are required by the department.
(3) For purposes of determining whether and to whom information
contained on a return of gross receipts tax may be made known,
ORS 314.835 and 314.840 shall apply. + }
SECTION 121. { + (1) Except where the context requires
otherwise, the provisions of ORS chapters 305 and 314 as to the
audit and examination of returns, determination of deficiencies,
assessments, claims for refund, refunds, conferences and appeals
to the Oregon Tax Court, and the procedures relating thereto,
shall apply to the determination of gross receipts tax, penalties
and interest.
(2) The gross receipts tax, interest and penalties are a
personal debt due and owing from the taxpayer to the State of
Oregon from the time that liability for the tax is incurred. The
lien and collection provisions of ORS chapters 305 and 314,
including but not limited to the warrant authority under ORS
314.430, the jeopardy provisions of ORS 314.440 and the
collection agency provisions of ORS 305.850, apply to the gross
receipts tax. + }
SECTION 122. { + Rules, administration. (1) The Department of
Revenue is authorized to and shall adopt rules requiring
uniformity in application, reporting and collection and otherwise
carrying out the purposes of sections 1 to 131 of this 2001 Act.
(2) The department shall provide by rule for the effective
administration of the gross receipts tax. + }
SECTION 123. { + Quitting business, successor. (1) For
purposes of the gross receipts tax, 'successor' means any person
to whom another person quitting, selling out, exchanging or
disposing of a business sells or otherwise conveys, directly or
indirectly, in bulk and not in the ordinary course of business, a
major part of the materials, supplies, merchandise, inventory,
fixtures or equipment of the person. Any person obligated to
fulfill the terms of a contract shall be considered a successor
to any contractor defaulting in the performance of any contract
as to which the person is a surety or guarantor.
(2) If any person quits business or sells out, exchanges or
otherwise disposes of a business or stock of goods, any gross
receipts tax shall become immediately due and payable. The person
shall, within 10 days after the sale, exchange or disposition,
make a return and pay the tax due.
(3) The successor is liable for the full amount of the tax and
may withhold from the purchase price a sum sufficient to pay any
tax due until a receipt or evidence from the Department of
Revenue showing payment in full of any tax due is presented to
the successor. If a receipt or other evidence is not presented to
the successor within 10 days, the successor may pay the tax and
the amount paid shall, to the extent paid, be considered a
payment of the purchase price. If the tax paid by the successor
is greater than the purchase price, the amount of the difference
is a debt due to the successor from the seller or transferor.
(4) A successor is not liable for any tax due from the person
from whom the successor has acquired a business or stock of goods
if the successor gives written notice to the department of the
acquisition and the department does not assess a deficiency
against the seller or transferor within six months of receipt of
the notice of acquisition and mail or deliver a copy of the
assessment to the successor. + }
{ +
DISPOSITION OF PROCEEDS + }
SECTION 124. { + Payments to department. For the purposes of
sections 1 to 131 of this 2001 Act, and except as otherwise
provided by law, all taxes, interest and penalties imposed and
all amounts of gross receipts tax collected or required to be
paid to the state shall be paid to the Department of Revenue and
upon receipt by the department shall be turned over to the State
Treasurer, to be disbursed as provided in section 125 of this
2001 Act. + }
SECTION 125. { + Suspense account, other disposition. (1)
Except as otherwise provided by law, all moneys received by the
Department of Revenue under sections 1 to 131 of this 2001 Act
shall be deposited in the State Treasury and credited to a
suspense account established under ORS 293.445 separate and apart
from the General Fund. Refunds, including refunds of erroneous
overpayments or refunds of other moneys received in which the
department has no legal interest, shall be paid out of the
suspense account. After payment of refunds, the balance shall be
deposited in the Gross Receipts Tax Education Replacement Fund,
which is hereby created.
(2) There is appropriated continuously to the department, out
of the General Fund, amounts necessary to pay the administrative
expenses of the department in administering, collecting and
enforcing the gross receipts tax.
(3) Any amount of gross receipts tax proceeds required to be
used as described under section 2 (1)(g), Article VIII, or
section 3a, Article IX of the Oregon Constitution, shall be
turned over promptly to the State Treasurer and shall be disposed
of as provided in ORS 324.340 or 802.110, whichever is
appropriate. + }
SECTION 126. { + Gross Receipts Tax Education Replacement
Fund. (1) The Gross Receipts Tax Education Replacement Fund
established under section 125 of this 2001 Act shall consist of:
(a) All moneys and revenues derived from the gross receipts tax
transferred from the suspense account described in section 125 of
this 2001 Act.
(b) All moneys or revenues received from all other sources that
by law are allocated, dedicated or appropriated to the Gross
Receipts Tax Education Replacement Fund.
(c) All interest earnings on any of the funds designated in
this subsection shall be placed to the credit of the Gross
Receipts Tax Education Replacement Fund.
(2) The Gross Receipts Tax Education Replacement Fund shall be
considered to be and held as a trust fund to be used for the
purposes of education and all moneys allocated or appropriated to
the fund are continuously appropriated for those purposes.
(3) The moneys in the Gross Receipts Tax Education Replacement
Fund, in amounts determined by the State Treasurer, shall be
invested as provided in ORS 293.701 to 293.820. + }
{ +
PENALTIES + }
SECTION 127. { + (1) Any person required to make, render,
furnish, sign or verify any gross receipts tax return who makes
any false or fraudulent or supplementary return, with intent to
defeat or evade the determination of an amount of tax due, is
subject to the penalty and shall be punished as provided under
ORS 314.991 (1).
(2) Any person who fails or refuses to file any gross receipts
tax return or supplementary return, or to furnish any information
required by the Department of Revenue, shall be punished, upon
conviction, as provided under ORS 305.990 (4).
(3) Violation of any provision contained in sections 1 to 131
of this 2001 Act, or any rule adopted thereunder, shall be
punished, upon conviction, as provided under ORS 305.990 (4). + }
SECTION 128. { + Unauthorized engaging in business. (1) Any
person who engages in business within this state without having
registered with the Department of Revenue is punishable, upon
conviction, as provided in ORS 305.990 (4).
(2) Any person who engages in business in this state after
having registered with the department and having had the
registration revoked is guilty of a Class C felony. + }
SECTION 129. { + Resale certificate, fraudulent. Any person
who willfully tenders a resale certificate that is false,
fraudulent or invalid to a seller or who, under false or
knowingly misleading circumstances, tenders a resale certificate
to a seller, is punishable, upon conviction, as provided under
ORS 305.990 (4). + }
SECTION 130. { + Corporations. For purposes of sections 127 to
131 of this 2001 Act, 'person' includes an officer or employee of
a corporation or a member or employee of a partnership. + }
SECTION 131. { + Penalties additional to all other penalties.
Any of the penalties provided in sections 127, 128 and 129 of
this 2001 Act are in addition to all other penalties applicable
to sections 1 to 131 of this 2001 Act. + }
{ +
OPERATIVE DATE + }
SECTION 132. { + (1) Sections 1 to 131 of this 2001 Act do not
become operative unless the amendment to the Oregon Constitution
proposed by House Joint Resolution 31 (2001), establishing a
gross receipts tax to meet public education funding requirements,
is approved by the people at the next regular general election
held throughout this state.
(2) If the amendment to the Oregon Constitution proposed by
House Joint Resolution 31 (2001), establishing a gross receipts
tax to meet public education funding requirements, is approved by
the people at the next regular general election held throughout
this state, then sections 1 to 131 of this 2001 Act become
operative on July 1, 2005. + }
{ +
CAPTIONS + }
SECTION 133. { + The unit and section captions used in this
2001 Act are provided only for convenience in locating provisions
of this 2001 Act and do not become part of the statutory law of
this state or express any legislative intent in the enactment of
this 2001 Act. + }
----------