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 684
A-Engrossed
House Bill 2777
Ordered by the House April 30
Including House Amendments dated April 30
Sponsored by Representative NATHANSON; Representatives BARKER,
BERGER, CLEM, C EDWARDS, D EDWARDS, ESQUIVEL, GARRARD, READ,
ROBLAN, SCHAUFLER, STIEGLER, VANORMAN, WITT
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.
Creates income tax credit for qualified investments in
machinery and equipment. { + Requires taxpayer, to claim credit,
to use machinery or equipment for at least 36 consecutive months
following date on which it is put in service. + } Limits total
amount of credit that may be claimed in biennium and limits
amount each taxpayer may claim.
Applies to tax years beginning on or after January 1, 2010, but
permits qualified investments purchased on or after July 1, 2009,
to be considered qualified investments for 2010 tax year.
Sunsets program by prohibiting certification of new qualified
investments on or after July 1, { - 2015 - } { + 2014 + }.
A BILL FOR AN ACT
Relating to investment tax credits; creating new provisions; and
amending ORS 314.752 and 318.031.
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 315. + }
SECTION 2. { + (1) As used in this section, 'qualified
investment' means a purchase of machinery or equipment that:
(a) Is used in a trade or business or for the production of
income;
(b) Is installed or used in a facility located in this state;
(c) Is used in a trade or business operating in a traded
sector, as defined in ORS 285A.010;
(d) Is used by a small business, as defined in ORS 285A.010;
(e) Is put in service during the tax year in which it is
purchased;
(f) If installed and used by the taxpayer, is not likely to
result in a net loss of employees by the taxpayer; and
(g) Meets any other criteria for certification of a qualified
investment under this section established by the Economic and
Community Development Department by rule.
(2) A credit against taxes that are otherwise due under ORS
chapter 316 or, if the taxpayer is a corporation, under ORS
chapter 317 or 318 is allowed to a taxpayer for ___ percent of
the total certified amount of qualified investments made by the
taxpayer during the tax year, if the machinery or equipment is
used by the taxpayer for at least 36 consecutive months following
the date that it is put in service. The amount of the credit may
not exceed the lesser of:
(a) $___; or
(b) The tax liability of the taxpayer for the tax year.
(3)(a) A taxpayer seeking a credit under this section shall
first obtain credit certification from the Economic and Community
Development Department by applying for certification on a form
prescribed by the department. The application shall state the
date of purchase, the amount of the qualified investment made by
the taxpayer during the tax year and any other information
required by the department.
(b) The department shall review applications and issue
certifications for those applications that describe qualified
investments. The department shall maintain a record of the
cumulative amounts certified under this subsection and may not
issue a certification during a biennium if the amount proposed to
be certified, when added to the total of previously certified
amounts for the biennium, exceeds $30 million.
(c) A taxpayer may not claim a credit under this section
without first obtaining certification under this subsection.
(d) A taxpayer may not obtain credit certification for, and may
not claim, a credit under this section for any amount of
qualified investment for which the taxpayer claims a credit under
any other provision of this chapter or ORS chapter 285C, 316 or
317.
(4) If machinery or equipment for which a credit is claimed is
not used as required by subsections (1) and (2) of this section,
the Economic and Community Development Department may revoke the
certification granted under subsection (3) of this section.
Following revocation, and upon notification of the taxpayer, the
Department of Revenue shall immediately proceed to collect any
taxes not paid by the taxpayer as a result of the credit allowed
under this section. If the machinery or equipment is placed in
service, but used as required for less than 36 months, the
department may prorate the amount of credit allowed under this
section.
(5) Any tax credit otherwise allowable under this section that
is not used by the taxpayer in a particular tax year because of
the limitation in subsection (2)(b) of this section may be
carried forward and offset against the taxpayer's tax liability
for the next succeeding tax year. Any credit remaining unused in
the next succeeding tax year may be carried forward and used in
the second succeeding tax year, and likewise any credit not used
in that second succeeding tax year may be carried forward and
used in the third succeeding tax year, and any credit not used in
that third succeeding tax year may be carried forward and used in
the fourth succeeding tax year, but may not be carried forward
for any tax year thereafter.
(6) A nonresident shall be allowed the credit allowed under
subsection (2) or (5) of this section. The credit shall be
computed in the same manner and be subject to the same
limitations as the credit granted to a resident.
(7) If a change in the taxable year of the taxpayer occurs as
described in ORS 314.085, or if the department terminates the
taxpayer's taxable year under ORS 314.440, the credit allowed by
this section shall be prorated or computed in a manner consistent
with ORS 314.085.
(8) If a change in the status of a taxpayer from resident to
nonresident or from nonresident to resident occurs, the credit
allowed by this section shall be determined in a manner
consistent with ORS 316.117.
(9) If the qualified investment consists of property for which
the taxpayer claims a deduction for depreciation for federal tax
purposes, the adjusted basis of the property shall be further
adjusted by reducing the federal adjusted basis by the total
amount of credit allowable under this section for Oregon tax
purposes. + }
SECTION 3. ORS 314.752 is amended to read:
314.752. (1) Except as provided in ORS 314.740 (5)(b), the tax
credits allowed or allowable to a C corporation for purposes of
ORS chapter 317 or 318 shall not be allowed to an S corporation.
The business tax credits allowed or allowable for purposes of ORS
chapter 316 shall be allowed or are allowable to the shareholders
of the S corporation.
(2) In determining the tax imposed under ORS chapter 316, as
provided under ORS 314.734, on income of the shareholder of an S
corporation, there shall be taken into account the shareholder's
pro rata share of business tax credit (or item thereof) that
would be allowed to the corporation (but for subsection (1) of
this section) or recapture or recovery thereof. The credit (or
item thereof), recapture or recovery shall be passed through to
shareholders in pro rata shares as determined in the manner
prescribed under section 1377(a) of the Internal Revenue Code.
(3) The character of any item included in a shareholder's pro
rata share under subsection (2) of this section shall be
determined as if such item were realized directly from the source
from which realized by the corporation, or incurred in the same
manner as incurred by the corporation.
(4) If the shareholder is a nonresident and there is a
requirement applicable for the business tax credit that in the
case of a nonresident the credit be allowed in the proportion
provided in ORS 316.117, then that provision shall apply to the
nonresident shareholder.
(5) As used in this section, 'business tax credit' means a tax
credit granted to personal income taxpayers to encourage certain
investment, to create employment, economic opportunity or
incentive or for charitable, educational, scientific, literary or
public purposes that is listed under this subsection as a
business tax credit or is designated as a business tax credit by
law or by the Department of Revenue by rule and includes but is
not limited to the following credits: ORS 285C.309 (tribal taxes
on reservation enterprise zones), ORS 315.104 (forestation and
reforestation), ORS 315.134 (fish habitat improvement), ORS
315.138 (fish screening, by-pass devices, fishways), ORS 315.156
(crop gleaning), ORS 315.164 and 315.169 (farmworker housing),
ORS 315.204 (dependent care assistance), ORS 315.208 (dependent
care facilities), ORS 315.213 (contributions for child care), ORS
315.254 (youth apprenticeship sponsorship), ORS 315.304
(pollution control facility), ORS 315.324 (plastics recycling),
ORS 315.354 and ORS 469.207 (energy conservation facilities), ORS
315.507 (electronic commerce), ORS 315.511 (advanced
telecommunications facilities), ORS 315.604 (bone marrow
transplant expenses), ORS 317.115 (fueling stations necessary to
operate an alternative fuel vehicle) and ORS 315.141 (biomass
production for biofuel) { + and section 2 of this 2009 Act
(investment tax credit) + }.
SECTION 4. ORS 318.031 is amended to read:
318.031. It being the intention of the Legislative Assembly
that this chapter and ORS chapter 317 shall be administered as
uniformly as possible (allowance being made for the difference in
imposition of the taxes), ORS 305.140 and 305.150, ORS chapter
314 and the following sections are incorporated into and made a
part of this chapter: ORS 285C.309, 315.104, 315.134, 315.141,
315.156, 315.204, 315.208, 315.213, 315.254, 315.304, 315.507,
315.511 and 315.604 { + and section 2 of this 2009 Act + } (all
only to the extent applicable to a corporation) and ORS chapter
317.
SECTION 5. { + Section 2 of this 2009 Act and the amendments
to ORS 314.752 and 318.031 by sections 3 and 4 of this 2009 Act
apply to tax years beginning on or after January 1, 2010. + }
SECTION 6. { + Notwithstanding sections 2 and 5 of this 2009
Act:
(1) The Economic and Community Development Department may
certify qualified investment amounts with respect to qualified
investments that are purchased on or after July 1, 2009; and
(2) Qualified investments described in subsection (1) of this
section shall be deemed to have been purchased during the tax
year of the taxpayer that begins on or after January 1, 2010, and
before January 1, 2011. + }
SECTION 7. { + The Economic and Community Development
Department may not certify qualified investments under section 2
(3) of this 2009 Act after July 1, 2014. + }
----------