75th OREGON LEGISLATIVE ASSEMBLY--2009 Regular Session
 
NOTE:  Matter within  { +  braces and plus signs + } in an
amended section is new. Matter within  { -  braces and minus
signs - } is existing law to be omitted. New sections are within
 { +  braces and plus signs + } .
 
LC 2202
 
                           A-Engrossed
 
                         House Bill 2715
                  Ordered by the House April 29
            Including House Amendments dated April 29
 
Sponsored by Representatives BRUUN, D EDWARDS; Representatives
  BERGER, CANNON, CLEM, OLSON, READ, SHIELDS, G SMITH, THOMPSON
 
 
                             SUMMARY
 
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure.
 
  Permits corporations operating emerging businesses to defer
corporate excise and income taxes. Establishes maximum amount and
duration of deferred taxes.
   { +  Directs Economic and Community Development Department to
publicize and promote availability of tax deferral. + }
  Applies to tax years beginning on or after January 1, 2010.
 
                        A BILL FOR AN ACT
Relating to tax deferrals for emerging businesses.
Be It Enacted by the People of the State of Oregon:
  SECTION 1.  { + Section 2 of this 2009 Act is added to and made
a part of ORS chapter 317. + }
  SECTION 2.  { + (1) A corporation, other than an S corporation
as defined in ORS 314.730, is eligible to defer income or excise
taxes otherwise due if:
  (a) The corporation has total annual revenue of less than $3.5
million;
  (b) The corporation has at least two employees; and
  (c) The business operations of the corporation have existed for
less than five years.
  (2) A corporation meeting the requirements of subsection (1) of
this section and seeking deferral shall file an application for
the deferral with the Department of Revenue at the time the
corporation files the corporation's tax return for the tax year
for which deferral is sought.
  (3) The department may require the taxpayer to provide proof of
eligibility for the tax deferral granted by this section.
  (4) Deferral may be granted under this section only if:
  (a) The corporation has timely filed the corporation's tax
return for the tax year;
  (b) The corporation has paid the amount of tax that is not
eligible for deferral under subsection (5) of this section for
the tax year; and
  (c) The corporation and its majority owner are not delinquent
in the payment of any tax imposed under this chapter or ORS
chapter 316, 318 or 323.
 
  (5) The amount of tax that may be deferred under this section
shall equal the lesser of:
  (a) Eighty percent of the tax liability of the taxpayer; or
  (b) $200,000.
  (6) If the corporation meets the requirements for deferral
under this section, the department shall grant the deferral. Upon
granting the deferral, the department shall have a lien against
all real and personal property of the corporation in the amount
of the deferred tax. The deferred tax liens shall have the same
priority as other income tax liens. The department shall obtain,
from the majority owner of the corporation, a personal guarantee
of payment of the tax deferred under this section.
  (7)(a) Deferred taxes shall accrue interest at the prime rate.
  (b) As used in this subsection, 'prime rate' means the primary
credit rate of the discount window program of the United States
Federal Reserve System, as of January 1 of the year for which the
interest is being accrued.
  (8)(a) Taxes imposed under this chapter may be deferred only
for a maximum period of two years. Following the end of the
deferral period, the deferred taxes, together with accrued
interest, are immediately due and payable. The taxpayer may elect
to pay the deferred taxes and accrued interest in equal quarterly
payments over the four-year period immediately following the end
of the deferral period.
  (b) Payments made in any quarter may exceed the minimum payment
amount described in paragraph (a) of this subsection.
  (c) The department may enforce the lien for deferred income
taxes and collect any delinquent deferred taxes, plus accrued
interest, in the same manner as it collects other delinquent
income taxes.
  (9) The department may adopt rules and prescribe any forms
necessary to administer the tax deferral program.
  (10) The Economic and Community Development Department shall
publicize and promote to potential applicants the availability of
the tax deferral granted by this section. + }
  SECTION 3.  { + Section 2 of this 2009 Act applies to tax years
beginning on or after January 1, 2010, and before January 1,
2018. + }
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