Chapter 65 Oregon Laws 2003

AN ACT

HB 2622

Relating to business development tax incentives; creating new provisions; amending ORS 315.507; and prescribing an effective date.

Be It Enacted by the People of the State of Oregon:

SECTION 1. ORS 315.507 is amended to read:

315.507. (1) A credit against the taxes that are otherwise due under ORS chapter 316 or, if the taxpayer is a corporation, under ORS chapter 317 or 318, shall be allowed to a taxpayer that is:

(a) A [qualified] business firm engaged or preparing to engage in electronic commerce in an enterprise zone that has been approved for electronic commerce designation under ORS 285B.672; or

(b) A business firm engaged in electronic commerce in a city that has been designated for electronic commerce under ORS 285B.673.

(2) The credit shall equal 25 percent of the investments made by the business firm in capital assets:

(a) Located in the area designated for electronic commerce;

(b) [during the tax year] Used or constructed, installed or otherwise prepared for use in electronic commerce operations within the area designated for electronic commerce that are related to electronic commerce sales, customer service, order fulfillment, [or] broadband infrastructure or other electronic commerce operations; and

(c)(A) During the period that commences when the firm becomes a precertified business firm under ORS 285B.719 and ends on the last day of the income or corporate excise tax year in which begins the first property tax year in which qualified property of the firm used in eligible electronic commerce activities is exempt from property taxation under ORS 285B.698; or

(B) During any income or corporate excise tax year in which begins a property tax year in which qualified property of the firm used in eligible electronic commerce operations is exempt from property taxation under ORS 285B.698.

[(3) A credit under this section may not be allowed for an income tax year beginning in a property tax year in which qualified property of the business firm is subject to property tax.]

(3) Except as provided in subsection (5) of this section, the credit must be claimed for the income or corporate excise tax year that is:

(a) The year in which the investment for which a credit is being claimed is made; and

(b) A year, all or part of which is described in subsection (2)(c) of this section.

(4) A credit allowed under this section for any one tax year may not exceed the lesser of $2 million or the tax liability of the taxpayer.

(5) Any tax credit otherwise allowable under this section that is not used by the taxpayer in a particular year may be carried forward and offset against the taxpayer’s tax liability for the next succeeding tax year. Any credit remaining unused in the next succeeding tax year may be carried forward and used in the second succeeding tax year, and likewise any credit not used in that second succeeding tax year may be carried forward and used in the third succeeding tax year, and any credit not used in that third succeeding tax year may be carried forward and used in the fourth succeeding tax year, and any credit not used in that fourth succeeding tax year may be carried forward and used in the fifth succeeding tax year, but may not be carried forward for any tax year thereafter.

(6) The credit allowed under this section is not in lieu of any depreciation or amortization deduction to which the taxpayer otherwise may be entitled under ORS chapter 316, 317 or 318 for the tax year.

(7) The taxpayer’s adjusted basis for determining gain or loss may not be further decreased by any amount of credit allowed under this section.

(8)(a) A nonresident shall be allowed the credit under this section in the proportion provided in ORS 316.117.

(b) If a change in the status of a taxpayer from resident to nonresident or from nonresident to resident occurs, the credit allowed under this section shall be determined in a manner consistent with ORS 316.117.

(c) If a change in the taxable year of a taxpayer occurs as described in ORS 314.085, or if the Department of Revenue terminates the taxpayer’s taxable year under ORS 314.440, the credit allowed under this section shall be prorated or computed in a manner consistent with ORS 314.085.

[(6)] (9) As used in this section, “business firm,” “electronic commerce,” [“qualified business firm”] “precertified business firm” and “qualified property” have the meanings given those terms in ORS 285B.650.

SECTION 2. (1) A taxpayer who has claimed a credit under ORS 315.507 shall maintain records sufficient to show:

(a) That within three years following the year in which a credit was claimed under ORS 315.507, property owned or operated by the taxpayer and used in electronic commerce operations was exempt from property taxation under ORS 285B.698; and

(b) That at no time was property described in paragraph (a) of this subsection disqualified from exemption pursuant to ORS 285B.728.

(2) The taxpayer shall provide these records to the Department of Revenue if requested by the department.

(3) The taxpayer shall maintain the records described in this section for at least five years following the last tax year for which the taxpayer claims any credit under ORS 315.507.

(4) If property owned or operated by the taxpayer is not both used in electronic commerce operations in an area designated for electronic commerce and exempt from property taxation under ORS 285B.698 within three years following the year in which a credit is first claimed under ORS 315.507, the department shall disallow the credit for the current or any prior tax year and collect any taxes that were not paid as a result of application of the credit.

(5) If property owned or operated by the taxpayer, used in electronic commerce operations in an area designated for electronic commerce and exempt from property taxation under ORS 285B.698 is disqualified from exemption under ORS 285B.728, the department shall disallow the credit for the current or any prior tax year and collect any taxes that were not paid as a result of application of the credit.

(6) For purposes of collecting taxes due under subsection (4) or (5) of this section, the department shall have the benefit of all laws of this state pertaining to the collection of income and corporate excise taxes. No assessment of these taxes shall be necessary and no statute of limitations shall preclude the collection of these taxes.

SECTION 3. Section 2 of this 2003 Act is added to and made a part of ORS chapter 315.

SECTION 4. Section 2 of this 2003 Act and the amendments to ORS 315.507 by section 1 of this 2003 Act apply to tax years beginning on or after January 1, 2002.

SECTION 5. This 2003 Act takes effect on the 91st day after the date on which the regular session of the Seventy-second Legislative Assembly adjourns sine die.

Approved by the Governor April 29, 2003

Filed in the office of Secretary of State April 29, 2003

Effective date November 26, 2003

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