Chapter 323
AN ACT
SB 178
Relating to unitary business definitions for
tax purposes; creating new provisions; amending ORS 317.479 and 317.705; and
prescribing an effective date.
Be It Enacted by the People of
the State of
SECTION 1. ORS 317.705 is amended to read:
317.705. As used in [this section and ORS 317.710 and] ORS
317.705 to 317.715:
(1) “Affiliated group”
means an affiliated group of corporations as defined in section 1504 of the
Internal Revenue Code.
(2) “Unitary group”
means a corporation or group of corporations engaged in business activities
that constitute a [single trade or]
unitary business.
(3)(a) [“Single trade or business”] “Unitary
business” means a business enterprise in which there exists directly or
indirectly between the members or parts of the enterprise a sharing or exchange
of value as demonstrated by:
(A) Centralized
management or a common executive force;
(B) Centralized
administrative services or functions resulting in economies of scale; [and] or
(C) Flow of goods,
capital resources or services demonstrating functional integration.
(b) [“Single trade or business”] “Unitary business”
may include, but is not limited to, a business enterprise the activities of
which:
(A) Are in the same general
line of business (such as manufacturing, wholesaling or retailing); or
(B) Constitute steps in
a vertically integrated process (such as the steps involved in the production
of natural resources, which might include exploration, mining, refining and marketing).
(c) Whether two or more
corporations that are included in the same consolidated federal return are
engaged in a [single trade or]
unitary business may be determined by making reference to corporations that
are doing business in the United States and are subject to federal income
taxation, whether or not those corporations are includable in the consolidated
return. No other corporations may be taken into consideration in making such a
determination, except in a case in which the transactions or relationships
between such corporations are made in an attempt to evade or avoid taxation.
SECTION 2. ORS 317.479 is amended to read:
317.479. (1)
Preacquisition losses, as described under section 384 of the Internal Revenue
Code, to the extent allocated or apportioned to Oregon, with the additions,
subtractions, modifications and other adjustments required for purposes of this
chapter, shall not be considered in determining the taxable income or loss
under ORS 317.010.
(2) If any
preacquisition loss, as described in subsection (1) of this section, may not
offset a recognized built-in gain by reason of section 384 of the Internal
Revenue Code, such gain shall not be taken into
account in determining under ORS 317.476 the amount of such loss which may be
carried to other taxable years.
(3) In any case in which
a preacquisition loss, as described in subsection (1) of this section, for any
taxable year is subject to limitation under subsection (1) of this section and
a taxable loss from such taxable year is not subject to such limitation,
taxable income shall be treated as having been offset first by the loss subject
to such limitation.
(4) The definitions
contained in section 384(c) of the Internal Revenue Code shall apply for
purposes of this section, except that where appropriate, gain, loss and items
of income shall be determined as allocated or apportioned to
(5) Section 384(b) and
(c)(5) and (6) of the Internal Revenue Code shall be
applied for purposes of this section in a manner consistent with ORS 317.705 to
[317.725] 317.715, 317.720 and
317.725.
SECTION 3. The amendments to ORS 317.705 and 317.479 by
sections 1 and 2 of this 2007 Act apply to tax years beginning on or after
January 1, 2007.
SECTION 4. This 2007 Act takes effect on the 91st day
after the date on which the regular session of the Seventy-fourth Legislative
Assembly adjourns sine die.
Approved by the Governor June 11, 2007
Filed in the office of Secretary of State June 13, 2007
Effective date September 27, 2007
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