73rd OREGON LEGISLATIVE ASSEMBLY--2005 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 2061
 
                         House Bill 3068
 
Sponsored by Representative ROSENBAUM; Representatives
  DINGFELDER, HANSEN, HOLVEY, MARCH, MERKLEY, SHIELDS
 
 
                             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.
 
  Increases minimum tax imposed on corporations, including S
corporations.
  Applies to tax years beginning on or after January 1, 2005.
  Takes effect on 91st day following adjournment sine die.
 
                        A BILL FOR AN ACT
Relating to the corporate minimum tax; creating new provisions;
  amending ORS 314.732 and 317.090; prescribing an effective
  date; and providing for revenue raising that requires approval
  by a three-fifths majority.
Be It Enacted by the People of the State of Oregon:
  SECTION 1. ORS 317.090 is amended to read:
  317.090.  { + (1) As used in this section, 'Oregon sales'
means:
  (a) If the corporation apportions business income under ORS
314.650 to 314.665 for Oregon tax purposes for the tax year, the
total sales of the taxpayer in this state for purposes of ORS
314.665;
  (b) If the corporation does not apportion business income for
Oregon tax purposes, the total sales in this state that the
taxpayer would have had, as determined for purposes of ORS
314.665, if the taxpayer was required to apportion business
income for Oregon tax purposes; or
  (c) If the corporation apportions business income using a
method that is different than that prescribed by ORS 314.650 to
314.665, Oregon sales as defined by the Department of Revenue by
rule.
  (2) + } Each taxpayer named in ORS 317.056 or 317.070 shall pay
annually to the state, for the privilege of carrying on or doing
business   { - by it - }  within this state, a minimum tax
 { - of $10. - }  { +  as follows:
  (a) If the corporation has Oregon sales for the tax year of
less than $20,000, $250.
  (b) If the corporation has Oregon sales for the tax year of
$20,000 or more but less than $100,000, $500.
  (c) If the corporation has Oregon sales for the tax year of
$100,000 or more but less than $2 million, $1,000.
  (d) If the corporation has Oregon sales for the tax year of $2
million or more but less than $5 million, $2,000.
 
  (e) If the corporation has Oregon sales for the tax year of $5
million or more but less than $15 million, $3,000.
  (f) If the corporation has Oregon sales for the tax year of $15
million or more but less than $25 million, $4,000.
  (g) If the corporation has Oregon sales for the tax year of $25
million or more, $5,000.
  (3)  + }The minimum tax   { - shall not be - }  { +  is not + }
apportionable   { - ( - }  { + , + } except in the case of a
change of accounting periods  { - ), but shall be - }  { + . The
minimum tax is + } payable in full for any part of the year
during which a corporation is subject to tax.
  SECTION 2.  { + The amendments to ORS 317.090 by section 1 of
this 2005 Act apply to tax years beginning on or after January 1,
2005. + }
  SECTION 3. ORS 314.732 is amended to read:
  314.732. (1) Except as otherwise provided in ORS 314.740
 { - , - }  { + and + } 314.742 and   { - 317.090 - }  { +
section 5 of this 2005 Act + }, an S corporation   { - shall not
be - }  { +  is not + } subject to the taxes imposed by ORS
chapter 316, 317 or 318.
  (2)(a) Subject to paragraphs (b) to (d) of this subsection, the
taxable income of an S corporation shall be computed pursuant to
section 1363(b) of the Internal Revenue Code, with the
modifications, additions and subtractions provided in this
chapter and ORS chapter 316.
  (b) Except as otherwise provided under this chapter and ORS
chapter 316, 317 or 318, and except as inconsistent with ORS
314.730 to 314.752, subchapter C, chapter 1, Internal Revenue
Code, shall apply to an S corporation and its shareholders for
Oregon tax purposes. For Oregon tax purposes, the provisions of
section 1371 of the Internal Revenue Code shall apply, subject to
the modifications, additions and subtractions under this chapter
or ORS chapter 316, 317 or 318 and any provisions to the contrary
in this chapter or ORS chapter 316, 317 or 318.
  (c) Notwithstanding ORS 317.476, 317.478 or 317.479, no
carryforward, arising for a taxable year for which a corporation
is a C corporation, may be carried to a taxable year for which
such corporation is an S corporation.
  (d) Notwithstanding ORS 317.476 or other law, no carryforward,
and no carryback, shall arise at the corporate level for a
taxable year for which a corporation is an S corporation.
  SECTION 4.  { + Section 5 of this 2005 Act is added to and made
a part of ORS chapter 314. + }
  SECTION 5.  { + (1) As used in this section, 'Oregon sales '
means:
  (a) If the S corporation apportions business income under ORS
314.650 to 314.665 for Oregon tax purposes for the tax year, the
total sales of the taxpayer in this state for purposes of ORS
314.665;
  (b) If the S corporation does not apportion business income for
Oregon tax purposes, the total sales in this state that the
taxpayer would have had, as determined for purposes of ORS
314.665, if the taxpayer was required to apportion business
income for Oregon tax purposes; or
  (c) If the S corporation apportions business income using a
method that is different than that prescribed by ORS 314.650 to
314.665, Oregon sales as defined by the Department of Revenue by
rule.
  (2) Every S corporation doing business in this state shall pay
annually to the state, for the privilege of carrying on or doing
business within this state, a minimum tax as follows:
  (a) If the S corporation has Oregon sales for the tax year of
less than $1 million, $250.
  (b) If the S corporation has Oregon sales for the tax year of
$1 million or more, $500.
 
  (3) The minimum tax is not apportionable, except in the case of
a change of accounting periods. The minimum tax is payable in
full for any part of a year during which an S corporation
conducts business in this state.
  (4) The minimum tax shall be due and payable on or before the
15th day of the month following the close of the tax year, and
shall be reported and paid in the manner prescribed by the
Department of Revenue by rule.
  (5) The minimum tax shall be considered a tax imposed on
taxable income for all purposes of collection and
enforcement. + }
  SECTION 6.  { + Section 5 of this 2005 Act and the amendments
to ORS 314.732 by section 3 of this 2005 Act apply to tax years
beginning on or after January 1, 2005. + }
  SECTION 7.  { + This 2005 Act takes effect on the 91st day
after the date on which the regular session of the Seventy-third
Legislative Assembly adjourns sine die. + }
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