Chapter 864
AN ACT
HB 2592
Relating to tax compliance; and prescribing
an effective date.
NOTE:
Sections 1 and 2 were deleted by amendment. Subsequent sections were not
renumbered.
Be It Enacted by the People of
the State of
SECTION 3. Section 4 of this 2007 Act is added to and
made a part of ORS chapter 314.
SECTION 4. (1) As used in this section:
(a) “Authorized agent”
means an agent who is responsible for closing and settlement services in a
conveyance of a real property interest.
(b) “Closing and
settlement services” means services that are provided for the benefit of a
transferor or a transferee in connection with a conveyance of a real property
interest, and the receipt or disbursement of moneys in connection with a sale,
lease, encumbrance, mortgage or deed of trust in or related to real property.
(c) “Conveyance” means a
sale, lease, encumbrance, mortgage or creation of a secured interest in real
property.
(d) “Real property
interest” means a United States real property interest, as defined in section
897(c) of the Internal Revenue Code, that is located in the State of Oregon.
(2)(a) If there is a
conveyance of a real property interest, the authorized agent providing closing
and settlement services is required to withhold an amount equal to the least
of:
(A) Four percent of the
consideration for the real property interest being conveyed;
(B) Four percent of the
net proceeds resulting from the conveyance; or
(C) Ten percent of the
gain includable in taxable income.
(b) For purposes of this
subsection, a transferor is:
(A) An individual who is
not a resident of this state at the time of both the closing date of the
conveyance and the date on which proceeds of the conveyance are disbursed; or
(B) A C corporation that,
immediately after the conveyance of the real property interest, is not doing
business in this state.
(3)(a) Notwithstanding
subsection (2) of this section, an authorized agent is not required to withhold
amounts under this section if the authorized agent obtains a written
affirmation executed by the transferor on a form prescribed by the Department
of Revenue certifying under penalty of perjury that:
(A) The consideration
for the conveyance does not exceed $100,000;
(B) The transferee is
acquiring the real property interest through foreclosure; or
(C) The transferor:
(i) If an individual, is
a resident of this state;
(ii) If a corporation,
has a permanent place of business in this state; or
(iii) Has professionally
competent knowledge or advice that the transferor will not owe tax under ORS
chapter 316, 317 or 318 for the tax year because the conveyance is an exchange
that qualifies for deferral under section 1031 or 1033 of the Internal Revenue
Code or is a nontaxable transaction under Oregon tax law.
(b) If withholding is
not retained and remitted to the department pursuant to this section, the
authorized agent shall retain the written affirmation described in this
subsection for six years from the date of the closing of the conveyance
transaction and shall present the written affirmation to the department
immediately upon request in writing from the department.
(4) For purposes of this
section, a corporation is not doing business in this state if:
(a) The corporation has
not been issued a certificate of existence or a certificate of authorization by
the Secretary of State as described in ORS 60.027; and
(b) The corporation does
not maintain a permanent office with a staff of at least one employee in this
state or does not own or lease property in this state other than the property
that is the subject of the conveyance.
(5)(a) Amounts withheld
pursuant to this section are held in trust for the State of
(b) If an authorized
agent fails to remit an amount withheld or required to be withheld by the agent
under this section by the time remittance is required, the department may
enforce collection in the same manner as the department enforces the collection
of amounts withheld by employers under ORS 316.162 to 316.221.
(c) Notwithstanding
paragraph (b) of this subsection, the department may not proceed with
collection actions against the authorized agent if the authorized agent:
(A) Presents the
department with the written affirmation described in subsection (3) of this
section; and
(B) Demonstrates to the
department that the authorized agent obtained the written affirmation prior to
disbursal of funds due the transferor resulting from the conveyance.
SECTION 5. Section 4 of this 2007 Act applies to
conveyances of real property interests occurring on or after January 1, 2008.
SECTION 6. If a political subdivision of this state
imposes a tax on or measured by income as determined under ORS chapter 316, 317
or 318, the Department of Revenue shall provide to the political subdivision,
at the request of the political subdivision, collection, enforcement,
administration and distribution services for the tax in the manner provided in
ORS 305.620.
SECTION 7. 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 July 31, 2007
Filed in the office of Secretary of State July 31, 2007
Effective date September 27, 2007
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