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 3619
House Bill 3034
Sponsored by Representative DEVLIN; Representatives KNOPP, WITT
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.
Establishes investment tax credit for qualified investments in
small businesses.
Applies to tax years beginning on or after January 1, 2002.
A BILL FOR AN ACT
Relating to taxation; creating new provisions; and amending ORS
314.752 and 318.031.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + Section 2 of this 2001 Act is added to and made
a part of ORS chapter 315. + }
SECTION 2. { + (1) As used in this section:
(a) 'Qualified investment' means the acquisition, installation
and use of depreciable tangible personal property in the business
operations of a small business.
(b) 'Small business' means a business with no more than 20
full-time equivalent employees.
(2) A credit against the taxes otherwise due under ORS chapter
316 (or, if the taxpayer is a corporation, under ORS chapter 317
or 318), shall be allowed for a qualified investment made by a
small business during the tax year.
(3) The amount of the credit shall equal 10 percent of the
amount of the qualified investment, but may not exceed $5,000.
(4) The credit provided by this section shall be in addition to
and not in lieu of any depreciation or amortization deduction for
the qualified investment to which the taxpayer otherwise may be
entitled under this chapter. The credit does not affect the
computation of basis for the qualified investment under this
chapter.
(5) The credit allowed in any one taxable year may not exceed
the tax liability of the taxpayer.
(6) Any tax credit otherwise allowable under this section that
is not used by the taxpayer in a particular year may be carried
forward and offset against the taxpayer's tax liability for the
next succeeding tax year. Any credit remaining unused in the next
succeeding tax year may be carried forward and used in the second
succeeding tax year, and any credit not used in that second
succeeding tax year may be carried forward and used in the third
succeeding tax year, and any credit not used in that third
succeeding tax year may be carried forward and used in the fourth
succeeding tax year, and any credit not used in that fourth
succeeding tax year may be carried forward and used in the fifth
succeeding tax year but may not be carried forward for any tax
year thereafter.
(7) The Department of Revenue may require independent proof of
the actual cost of the qualified investment. If the Department of
Revenue determines that the actual cost of the qualified
investment is less than the cost certified by the Director of the
Economic and Community Development Department, the certified cost
upon which the tax credit is based shall be reduced to the amount
determined by the Department of Revenue to be the actual cost.
(8) If the small business is a partnership or an S corporation,
the amount of the credit allowed to each owner shall correspond
to the owner's proportionate share of the partnership or S
corporation. + }
SECTION 3. ORS 314.752 is amended to read:
314.752. (1) Except as provided in ORS 314.740 (5)(b), the tax
credits allowed or allowable to a C corporation for purposes of
ORS chapter 317 or 318 shall not be allowed to an S corporation.
The business tax credits allowed or allowable for purposes of ORS
chapter 316 shall be allowed or are allowable to the shareholders
of the S corporation.
(2) In determining the tax imposed under ORS chapter 316, as
provided under ORS 314.734, on income of the shareholder of an S
corporation, there shall be taken into account the shareholder's
pro rata share of business tax credit (or item thereof) that
would be allowed to the corporation (but for subsection (1) of
this section) or recapture or recovery thereof. The credit (or
item thereof), recapture or recovery shall be passed through to
shareholders in pro rata shares as determined in the manner
prescribed under section 1377(a) of the Internal Revenue Code.
(3) The character of any item included in a shareholder's pro
rata share under subsection (2) of this section shall be
determined as if such item were realized directly from the source
from which realized by the corporation, or incurred in the same
manner as incurred by the corporation.
(4) If the shareholder is a nonresident and there is a
requirement applicable for the business tax credit that in the
case of a nonresident that the credit be allowed in the
proportion provided in ORS 316.117, then that provision shall
apply to the nonresident shareholder.
(5) As used in this section, 'business tax credit' means a tax
credit granted to personal income taxpayers to encourage certain
investment, to create employment, economic opportunity or
incentive or for charitable, educational, scientific, literary or
public purposes that is listed under this subsection as a
business tax credit or is designated as a business tax credit by
law or by the Department of Revenue by rule and includes but is
not limited to the following credits: ORS 315.104 (forestation
and reforestation), ORS 315.134 (fish habitat improvement), ORS
315.138 (fish screening, by-pass devices, fishways), ORS 315.156
(crop gleaning), ORS 315.164 (farmworker housing), ORS 315.204
(dependent care assistance), ORS 315.208 (dependent care
facilities), ORS 315.234 (child development program
contributions), ORS 315.254 (youth apprenticeship sponsorship),
ORS 315.304 (pollution control facility), ORS 315.324 (plastics
recycling), ORS 315.354 and ORS 469.207 (energy conservation
facilities), ORS 315.504 (Oregon Capital Corporation), ORS
315.604 (bone marrow transplant expenses) { + and section 2 of
this 2001 Act (small business investments) + } and ORS 317.115
(fueling stations necessary to operate an alternative fuel
vehicle).
SECTION 4. ORS 318.031 is amended to read:
318.031. It being the intention of the Legislative Assembly
that this chapter and the Corporation Excise Tax Law of 1929
shall be administered as uniformly as possible (allowance being
made for the difference in imposition of the taxes and the
operative date of this chapter), the provisions of ORS 305.140
and 305.150 and ORS chapter 314 and of the following sections of
ORS chapter 315 or 317, as amended on or before August 3, 1955,
and as they may thereafter be amended, are incorporated into this
chapter by this reference and made a part hereof: ORS 315.104,
315.134, 315.156, 315.204, 315.208, 315.234, 315.254, 315.304,
315.504 and 315.604 { + and section 2 of this 2001 Act + } (all
only to the extent applicable for a corporation) and ORS 317.010,
317.013, 317.018 to 317.022, 317.030, 317.035, 317.038, 317.080,
317.152 to 317.154, 317.259 to 317.303, 317.310 to 317.386,
317.476 to 317.485, 317.510 to 317.635 and 317.705 to 317.725 and
section 40, chapter 835, Oregon Laws 1997, and section 4, chapter
358, Oregon Laws 1999.
SECTION 5. { + Section 2 of this 2001 Act and the amendments
to ORS 314.752 and 318.031 by sections 3 and 4 of this 2001 Act
apply to tax years beginning on or after January 1, 2002. + }
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