74th OREGON LEGISLATIVE ASSEMBLY--2007 Regular Session
SA to SB 179
LC 627/SB 179-4
SENATE AMENDMENTS TO
SENATE BILL 179
By COMMITTEE ON FINANCE AND REVENUE
June 5
On page 1 of the printed bill, line 2, after 'ORS' insert '
317.122 and'.
In line 8, delete ', as described in subsection (2) of this'.
In line 9, delete 'section,'.
On page 2, delete lines 27 through 30.
In line 31, delete '(3)' and insert '(2)' and delete '
subsections (1) and (2)' and insert 'subsection (1)'.
Delete lines 44 and 45.
On page 3, delete lines 1 and 2 and insert:
' { + SECTION 2. + } ORS 317.122 is amended to read:
' 317.122. (1) A credit against taxes imposed by this chapter
shall be allowed insurers for the gross premium tax paid on fire
insurance premiums in accordance with ORS 731.820.
' (2) A credit against the taxes otherwise due under this
chapter shall be allowed to an insurer. The amount of the credit
shall be the lesser of:
' (a) The amount of any assessments paid by the insurer during
the tax year pursuant to ORS 656.612; or
' (b) The total profit attributable to the workers'
compensation line of business, net of reinsurance and including
all investment gain attributable to the workers' compensation
line of business, determined in the manner prescribed under ORS
731.574 by the Director of the Department of Consumer and
Business Services, with the modifications under ORS 317.655
attributable to the workers' compensation line of business, and
then apportioned in accordance with ORS 317.660 and multiplied by
the corporate tax rate set forth in ORS 317.061. In making the
apportionment under ORS 317.660 for purposes of this paragraph,
the { - factors - } { + insurance sales factor + } shall be
determined using only items attributable to the workers'
compensation line of business.
' { + SECTION 3. + } ORS 317.660, as amended by section 1 of
this 2007 Act, is amended to read:
' 317.660. (1) { + (a) + } If the income of an insurer is
derived from business done both within and without this state,
the determination of Oregon taxable income shall be arrived at by
{ - apportionment based upon an averaging of the following
three factors: - } { + multiplying the insurer's net income by
the insurance sales factor. + }
' { - (a) - } { + (b) + } { - An insurance sales
factor, - } { + The insurance sales factor shall consist of a
fraction, + }the numerator of which is the { + amount of + }
direct premiums (excluding reinsurance accepted and without
deduction of reinsurance ceded) received { + or earned + } by
the insurer during the tax year on policies and contracts that
are allocated to this state and to other jurisdictions in which
the insurer is not authorized to do business, and the denominator
of which is the total of such premiums received { + or
earned + } by the insurer during the tax year on policies and
contracts that had been sold within and without this state.
{ + ' (2) + } For purposes of this { - paragraph, - }
{ + section:
' (a) 'Net income' means net income properly recorded in the
statement of income reported in the annual statement filed by the
insurer with the Director of the Department of Consumer and
Business Services.
' (b) + } ' Premiums' means sums properly included in those
schedules of the annual statement filed by the insurer with the
Director of the Department of Consumer and Business Services that
appropriately allocate premiums by jurisdiction. { + If the
exclusion of reinsurance premiums results in an insurance sales
factor that does not fairly represent the extent of the
taxpayer's activity in this state, the taxpayer may petition for
and the Department of Revenue may permit, or the Department of
Revenue may require, the inclusion of reinsurance premiums in the
insurance sales factor. If the annual statement of the insurer
does not report received premiums then the insurance sales factor
shall be determined based on earned premiums.
' (3) If application of the apportionment formula described in
subsection (1) of this section results in an apportionment that
does not fairly and equitably represent the taxpayer's insurance
business activity in this state, the taxpayer may petition the
Department of Revenue for and the department may permit, or the
department may require, to achieve an apportionment that fairly
and equitably represents the taxpayer's insurance business
activity:
' (a)(A) The exclusion of the insurance sales factor; and
' (B) The inclusion of one or more additional factors that will
fairly and equitably represent the taxpayer's business activity
in this state;
' (b) The inclusion of the insurance sales factor and one or
more additional factors that will fairly and equitably represent
the taxpayer's business activity in this state; or
' (c) The employment of any other method to achieve a fair and
equitable apportionment of the taxpayer's income. + }
' { - (b) A wage and commission factor, the numerator of which
is the total of wages, salaries, commissions and other
compensation for personal services paid in this state during the
tax period to employees and insurance producers in connection
with the business of the insurer, and the denominator of which is
the total wages, salaries, commissions and other compensation for
personal services paid everywhere during the tax period to
employees and insurance producers in connection with the business
of the insurer. For purposes of this paragraph, the procedure set
forth in ORS 314.660 (2) shall be used to determine the place of
payment. - }
' { - (c) A real estate income and interest factor, the
numerator of which is the total net income received from real
property within this state plus gross interest received on loans
secured by real property within this state during the tax year,
and the denominator of which is the total net income received
from real property within and without this state plus gross
interest received on loans secured by real property within and
without this state during the tax year. For purposes of this
paragraph: - }
' { - (A) 'Total net income received from real property' means
gross rental income from real property reduced by all of the
following items attributable to the property, as reported by the
insurer in the annual statement filed with the Department of
Consumer and Business Services: - }
' { - (i) Rental real estate expenses; - }
' { - (ii) Rental real estate property taxes; and - }
' { - (iii) Rental real estate depreciation. - }
' { - (B) Any imputed rent from property owned and occupied by
the company shall be excluded from total net income received from
real property. - }
' { - (C) If the denominator of the factor is less than zero,
the factor shall be zero. - }
' { - (D) Unless subparagraph (C) of this paragraph applies,
if the numerator is greater than the denominator, the factor
shall be one. - }
' { - (2) If application of the apportionment formula
described in subsection (1) of this section, including but not
limited to the exclusion of reinsurance premiums from the
insurance sales factor under subsection (1)(a) of this section,
results in an apportionment that does not fairly and equitably
represent the taxpayer's insurance business activity in this
state, the taxpayer may petition the Department of Revenue for
and the department may permit, or the department may require, to
achieve an apportionment that fairly and equitably represents the
taxpayer's insurance business activity: - }
' { - (a) The exclusion of any one or more factors; - }
' { - (b) The inclusion of one or more additional factors that
will fairly and equitably represent the taxpayer's business
activity in this state; - }
' { - (c) The inclusion of reinsurance premiums in the
insurance sales factor; or - }
' { - (d) The employment of any other method to achieve a fair
and equitable apportionment of the taxpayer's income. - }
' { + SECTION 4. + } { + The amendments to ORS 317.660 by
section 1 of this 2007 Act apply to tax years beginning before
January 1, 2007. + }
' { + SECTION 5. + } { + The amendments to ORS 317.122 and
317.660 by sections 2 and 3 of this 2007 Act apply to tax years
beginning on or after January 1, 2007. + } ' .
In line 3, delete '3' and insert '6'.
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