74th OREGON LEGISLATIVE ASSEMBLY--2007 Regular Session
Enrolled
Senate Bill 175
Printed pursuant to Senate Interim Rule 213.28 by order of the
President of the Senate in conformance with presession filing
rules, indicating neither advocacy nor opposition on the part
of the President (at the request of Governor Theodore R.
Kulongoski for Department of Revenue)
CHAPTER ................
AN ACT
Relating to tax penalties; creating new provisions; and amending
ORS 314.400 and 314.750.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 314.400 is amended to read:
314.400. (1) If a taxpayer fails to file a report or return or
fails to pay a tax by the date on which the filing or payment is
due, the Department of Revenue shall add to the amount required
to be shown as tax on the report or return a delinquency penalty
of five percent of the amount of the unpaid tax.
(2) { + In the case of a report or return that is required to
be filed annually or for a one-year period, + } if the failure to
file
{ - a - } { + the + } report or return continues for a period
in excess of three months after the due date:
(a) { - (A) - } There shall be added to the amount of tax
required to be shown on the report or return a failure to file
penalty of 20 percent of the amount of the tax; and
{ - (B) - } { + (b) + } Thereafter the department may send
a notice and demand to the person to file a report or return
within 30 days of the mailing of the notice. If after the notice
and demand no report or return is filed within the 30 days, the
department may determine the tax according to the best of its
information and belief, assess the tax with appropriate penalty
and interest plus an additional penalty of 25 percent of the tax
deficiency determined by the department and give written notice
of the determination and assessment to the person required to
make the filing.
{ + (3) In the case of a report or return that is required to
be filed more frequently than annually and the failure to file
the report or return continues for a period in excess of one
month after the due date:
(a) There shall be added to the amount of tax required to be
shown on the report or return a failure to file penalty of 20
percent of the amount of the tax; and
(b) Thereafter the department may send a notice and demand to
the person to file a report or return within 30 days of the
mailing of the notice. If after the notice and demand no report
or return is filed within the 30 days, the department may
Enrolled Senate Bill 175 (SB 175-INTRO) Page 1
determine the tax according to the best of its information and
belief, assess the tax with appropriate penalty and interest plus
an additional penalty of 25 percent of the tax deficiency
determined by the department and give written notice of the
determination and assessment to the person required to make the
filing.
(4) Notwithstanding subsections (2) and (3) of this section, if
a taxpayer is required to file a federal income tax return for a
period of less than 12 months under section 443 of the Internal
Revenue Code, the Oregon personal income or corporate excise or
income tax return required to be filed for that period shall be
subject to subsection (2) of this section. + }
{ - (b) - } { + (5) + } { - But the - } { + If a + }
report or return { + that is subject to a failure to file
penalty described in subsection (2) or (3) of this section + } is
filed before a notice of determination and assessment is issued
by the department, the failure to file penalty referred to in
{ - paragraph (a)(A) of this subsection - } { + subsection
(2)(a) or (3)(a) of this section + } shall be added to the amount
of tax shown on the report or return.
{ - (3) - } { + (6) + } A penalty equal to 100 percent of
any deficiency determined by the department shall be assessed and
collected if:
(a) There is a failure to file a report or return with intent
to evade the tax;
(b) A report or return was falsely prepared and filed with
intent to evade the tax; or
(c) A false claim was intentionally filed under ORS 310.635,
310.657 and 310.706.
{ - (4) - } { + (7) + } Interest shall be collected on the
unpaid tax at the rate established under ORS 305.220 for each
month or fraction of a month, computed from the time the tax
became due, during which the tax remains unpaid.
{ - (5) - } { + (8) + } Each penalty imposed under this
section is in addition to any other penalty imposed under this
section. However, the total amount of penalty imposed under this
section and ORS 305.265 (13) with respect to any deficiency shall
not exceed 100 percent of the deficiency.
{ - (6) - } { + (9) + } For purposes of subsections (1)
{ - and (2) - } { + to (3) + } of this section, the amount of
tax required to be shown or that is shown on the report or return
shall be reduced by the amount that is paid on or before the date
prescribed for payment of the tax and by the amount of any credit
against the tax that is claimed on the report or return. If the
amount required to be shown as tax on the report or return is
less than the amount that is actually shown as tax on the report
or return, this subsection shall be applied by substituting the
lower amount.
{ - (7) - } { + (10) + } Notwithstanding subsection (1) of
this section, the five percent penalty for failure to file a
report or return or pay a tax at the time the tax becomes due may
not be imposed if:
(a) The taxpayer pays the full amount of the tax plus accrued
interest within 30 days of the date shown on the department's
notice sent to the taxpayer; and
(b)(A) The taxpayer had filed an amended individual tax return
or an amended corporate return of income or excise tax
accompanied by less than full payment of the tax shown on the
return plus accrued interest; or
Enrolled Senate Bill 175 (SB 175-INTRO) Page 2
(B) The department issues a notice of tax deficiency to the
taxpayer under ORS 305.265.
SECTION 2. ORS 314.750 is amended to read:
314.750. (1) Any increase in tax by reason of { + a recapture
of LIFO benefits under + } section 1363(d) of the Internal
Revenue Code
{ - (recapture of LIFO benefits) - } shall be payable in four
equal installments.
(2) { + (a) + } The first installment shall be paid on or
before the due date { - (determined without regard to
extensions) - } for the return of the tax for the last taxable
year for which the corporation was a C corporation and the three
succeeding installments shall be paid on or before the due date
{ - (as so determined) - } for the corporation's return for the
three succeeding taxable years.
{ + (b) For purposes of this subsection, the due date for
returns shall be determined without regard to extensions. + }
(3) Notwithstanding ORS 314.400 { - (4) - } { + (7) + },
for purposes of ORS 314.400 { - (4) - } { + (7) + }, interest
on each installment that is not paid on or before the date
prescribed under subsection (2) of this section for payment of
that installment shall accrue only from the due date for that
installment.
(4) This section applies in the case of S corporation elections
made after December 17, 1987. No refund or interest shall accrue
to any taxpayer on account of the retroactive application under
this subsection.
SECTION 3. { + (1) The amendments to ORS 314.400 by section 1
of this 2007 Act apply to reports or returns required to be filed
on or after January 1, 2008.
(2) The amendments to ORS 314.750 by section 2 of this 2007 Act
apply to tax years beginning on or after January 1, 2008. + }
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Passed by Senate February 26, 2007
...........................................................
Secretary of Senate
...........................................................
President of Senate
Passed by House May 25, 2007
...........................................................
Speaker of House
Enrolled Senate Bill 175 (SB 175-INTRO) Page 3
Received by Governor:
......M.,............., 2007
Approved:
......M.,............., 2007
...........................................................
Governor
Filed in Office of Secretary of State:
......M.,............., 2007
...........................................................
Secretary of State
Enrolled Senate Bill 175 (SB 175-INTRO) Page 4