74th OREGON LEGISLATIVE ASSEMBLY--2007 Regular Session
Enrolled
Senate Bill 178
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 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 Oregon:
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
Enrolled Senate Bill 178 (SB 178-A) Page 1
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 Oregon and with the
additions, subtractions, modifications and other adjustments
contained in this chapter.
(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. + }
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Passed by Senate May 3, 2007
...........................................................
Secretary of Senate
...........................................................
President of Senate
Passed by House May 21, 2007
...........................................................
Speaker of House
Enrolled Senate Bill 178 (SB 178-A) Page 2
Received by Governor:
......M.,............., 2007
Approved:
......M.,............., 2007
...........................................................
Governor
Filed in Office of Secretary of State:
......M.,............., 2007
...........................................................
Secretary of State
Enrolled Senate Bill 178 (SB 178-A) Page 3