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 3886
 
                         House Bill 3506
 
Sponsored by Representative MAURER; Representatives BENTZ, BRUUN
 
 
                             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 as
introduced.
 
  Connects definition of taxable income for purposes of Oregon
personal income and corporate tax laws to federal Internal
Revenue Code as code is from time to time amended.
  Applies to tax years beginning on or after January 1, 2009.
  Takes effect on 91st day following adjournment sine die.
 
                        A BILL FOR AN ACT
Relating to connection to federal tax law; creating new
  provisions; amending ORS 314.011, 316.012, 316.013, 317.010 and
  317.018; and prescribing an effective date.
Be It Enacted by the People of the State of Oregon:
  SECTION 1. ORS 314.011, as amended by section 11, chapter 45,
Oregon Laws 2008, and section 21, chapter 5, Oregon Laws 2009
(Enrolled House Bill 2157), is amended to read:
  314.011. (1) As used in this chapter, unless the context
requires otherwise, 'department' means the Department of Revenue.
  (2) As used in this chapter:
  (a) Any term has the same meaning as when used in a comparable
context in the laws of the United States relating to federal
income taxes, unless a different meaning is clearly required or
the term is specifically defined in this chapter.
  (b) Except where the Legislative Assembly has provided
otherwise, a reference to the laws of the United States or to the
Internal Revenue Code refers to the laws of the United States or
to the Internal Revenue Code as they are amended and in
effect { + :
  (A) + } On December 31, 2008  { - . - }  { + ; or
  (B) If related to the definition of taxable income, as
applicable to the tax year of the taxpayer. + }
  (c) With respect to ORS 314.105, 314.256 (relating to proxy tax
on lobbying expenditures), 314.260 (1)(b), 314.265 (1)(b),
314.302, 314.306, 314.330, 314.360, 314.362, 314.385, 314.402,
314.410, 314.412, 314.525, 314.742 (7), 314.750 and 314.752 and
other provisions of this chapter,  { + except those described in
paragraph (b) of this subsection, + } any reference to the laws
of the United States or to the Internal Revenue Code means the
laws of the United States relating to income taxes or the
Internal Revenue Code as they are amended on or before December
31, 2008, even when the amendments take effect or become
operative after that date, except where the Legislative Assembly
has specifically provided otherwise.
  (3) Insofar as is practicable in the administration of this
chapter, the department shall apply and follow the administrative
and judicial interpretations of the federal income tax law. When
a provision of the federal income tax law is the subject of
conflicting opinions by two or more federal courts, the
department shall follow the rule observed by the United States
Commissioner of Internal Revenue until the conflict is resolved.
Nothing contained in this section limits the right or duty of the
department to audit the return of any taxpayer or to determine
any fact relating to the tax liability of any taxpayer.
  (4) When portions of the Internal Revenue Code incorporated by
reference as provided in subsection (2) of this section refer to
rules or regulations prescribed by the Secretary of the Treasury,
then such rules or regulations shall be regarded as rules adopted
by the department under and in accordance with the provisions of
this chapter, whenever they are prescribed or amended.
  (5)(a) When portions of the Internal Revenue Code incorporated
by reference as provided in subsection (2) of this section are
later corrected by an Act or a Title within an Act of the United
States Congress designated as an Act or Title making technical
corrections, then notwithstanding the date that the Act or Title
becomes law, those portions of the Internal Revenue Code, as so
corrected, shall be the portions of the Internal Revenue Code
incorporated by reference as provided in subsection (2) of this
section and shall take effect, unless otherwise indicated by the
Act or Title (in which case the provisions shall take effect as
indicated in the Act or Title), as if originally included in the
provisions of the Act being technically corrected. If, on account
of this subsection, any adjustment is required to an Oregon
return that would otherwise be prevented by operation of law or
rule, the adjustment shall be made, notwithstanding any law or
rule to the contrary, in the manner provided under ORS 314.135.
  (b) As used in this subsection, 'Act or Title' includes any
subtitle, division or other part of an Act or Title.
  SECTION 2. ORS 316.012, as amended by section 13, chapter 45,
Oregon Laws 2008, and section 23, chapter 5, Oregon Laws 2009
(Enrolled House Bill 2157), is amended to read:
  316.012. Any term used in this chapter has the same meaning as
when used in a comparable context in the laws of the United
States relating to federal income taxes, unless a different
meaning is clearly required or the term is specifically defined
in this chapter. Except where the Legislative Assembly has
provided otherwise, any reference in this chapter to the laws of
the United States or to the Internal Revenue Code refers to the
laws of the United States or to the Internal Revenue Code as they
are amended and in effect { + :
  (1) + } On December 31, 2008  { - . - }  { + ; or
  (2) If related to the definition of taxable income, as
applicable to the tax year of the taxpayer. + }
  SECTION 3. ORS 316.013, as amended by section 29, chapter 5,
Oregon Laws 2009 (Enrolled House Bill 2157), is amended to read:
  316.013. Unless the context requires otherwise and
notwithstanding ORS 316.012, whenever, in the calculation of
Oregon taxable income, reference to the taxpayer's federal
adjusted gross income is required to be made, the taxpayer's
federal adjusted gross income shall be as determined under the
provisions of the Internal Revenue Code as they may be in effect
  { - on December 31, 2008, - }   { + for the tax year of the
taxpayer + } without any of the additions, subtractions or other
modifications or adjustments required under this chapter and
other laws of this state applicable to personal income taxation.
  SECTION 4. ORS 317.010, as amended by section 14, chapter 45,
Oregon Laws 2008, and section 24, chapter 5, Oregon Laws 2009
(Enrolled House Bill 2157), is amended to read:
  317.010. As used in this chapter, unless the context requires
otherwise:
  (1) 'Centrally assessed corporation' means every corporation
the property of which is assessed by the Department of Revenue
under ORS 308.505 to 308.665.
  (2) 'Department' means the Department of Revenue.
  (3)(a) 'Consolidated federal return' means the return permitted
or required to be filed by a group of affiliated corporations
under section 1501 of the Internal Revenue Code.
  (b) 'Consolidated state return' means the return required to be
filed under ORS 317.710 (5).
  (4) 'Doing business' means any transaction or transactions in
the course of its activities conducted within the state by a
national banking association, or any other corporation; provided,
however, that a foreign corporation whose activities in this
state are confined to purchases of personal property, and the
storage thereof incident to shipment outside the state, shall not
be deemed to be doing business unless such foreign corporation is
an affiliate of another foreign or domestic corporation which is
doing business in Oregon. Whether or not corporations are
affiliated shall be determined as provided in section 1504 of the
Internal Revenue Code.
  (5) 'Excise tax' means a tax measured by or according to net
income imposed upon national banking associations, all other
banks, and financial, centrally assessed, mercantile,
manufacturing and business corporations for the privilege of
carrying on or doing business in this state.
  (6) 'Financial institution' or 'financial corporation ' means a
bank or trust company organized under ORS chapter 707, national
banking association or production credit association organized
under federal statute, building and loan association, savings and
loan association, mutual savings bank, and any other corporation
whose principal business is in direct competition with national
and state banks.
  (7) 'Internal Revenue Code,' except where the Legislative
Assembly has provided otherwise, refers to the laws of the United
States or to the Internal Revenue Code as they are amended and in
effect { + :
  (a) + } On December 31, 2008  { - . - }  { + ; or
  (b) If related to the definition of taxable income, as
applicable to the tax year of the taxpayer. + }
  (8) 'Oregon taxable income' means taxable income, less the
deduction allowed under ORS 317.476, except as otherwise provided
with respect to insurers in subsection (11) of this section and
ORS 317.650 to 317.665.
  (9) 'Oregon net loss' means taxable loss, except as otherwise
provided with respect to insurers in subsection (11) of this
section and ORS 317.650 to 317.665.
  (10) 'Taxable income or loss' means the taxable income or loss
determined, or in the case of a corporation for which no federal
taxable income or loss is determined, as would be determined,
under chapter 1, Subtitle A of the Internal Revenue Code and any
other laws of the United States relating to the determination of
taxable income or loss of corporate taxpayers, with the
additions, subtractions, adjustments and other modifications as
are specifically prescribed by this chapter except that in
determining taxable income or loss for any year, no deduction
under ORS 317.476 or 317.478 and section 45b, chapter 293, Oregon
Laws 1987, shall be allowed. If the corporation is a corporation
to which ORS 314.280 or 314.605 to 314.675 (requiring or
permitting apportionment of income from transactions or
activities carried on both within and without the state) applies,
to derive taxable income or loss, the following shall occur:
  (a) From the amount otherwise determined under this subsection,
subtract nonbusiness income, or add nonbusiness loss, whichever
is applicable.
  (b) Multiply the amount determined under paragraph (a) of this
subsection by the Oregon apportionment percentage defined under
ORS 314.280, 314.650 or 314.670, whichever is applicable.  The
resulting product shall be Oregon apportioned income or loss.
  (c) To the amount determined as Oregon apportioned income or
loss under paragraph (b) of this subsection, add nonbusiness
income allocable entirely to Oregon under ORS 314.280 or 314.625
to 314.645, or subtract nonbusiness loss allocable entirely to
Oregon under ORS 314.280 or 314.625 to 314.645. The resulting
figure is 'taxable income or loss' for those corporations
carrying on taxable transactions or activities both within and
without Oregon.
  (11) As used in ORS 317.122 and 317.650 to 317.665, ' insurer'
means any domestic, foreign or alien insurer as defined in ORS
731.082 and any interinsurance and reciprocal exchange and its
attorney in fact with respect to its attorney in fact net income
as a corporate attorney in fact acting as attorney in compliance
with ORS 731.458, 731.462, 731.466 and 731.470 for the reciprocal
or interinsurance exchange. However, 'insurer' does not include
title insurers or health care service contractors operating
pursuant to ORS 750.005 to 750.095.
  SECTION 5. ORS 317.018, as amended by section 30, chapter 5,
Oregon Laws 2009 (Enrolled House Bill 2157), is amended to read:
  317.018. It is the intent of the Legislative Assembly:
  (1) To make the Oregon corporate excise tax law, insofar as it
relates to the measurement of taxable income, identical to the
provisions of the federal Internal Revenue Code, as in effect and
applicable   { - on December 31, 2008 - }  { +  for the tax year
of the taxpayer + }, to the end that taxable income of a
corporation for Oregon purposes is the same as it is for federal
income tax purposes, subject to Oregon's jurisdiction to tax, and
subject to the additions, subtractions, adjustments and
modifications contained in this chapter.
  (2) To achieve the results desired under subsection (1) of this
section by application of the various provisions of the federal
Internal Revenue Code relating to the definitions for
corporations, of income, deductions, accounting methods,
accounting periods, taxation of corporations, basis and other
pertinent provisions relating to gross income. It is not the
intent of the Legislative Assembly to adopt federal Internal
Revenue Code provisions dealing with the computation of tax, tax
credits or any other provisions designed to mitigate the amount
of tax due.
  (3) To impose on each corporation doing business within this
state an excise tax for the privilege of carrying on or doing
that business measured by its federal taxable income as adjusted
in this chapter.
  SECTION 6.  { + The amendments to ORS 314.011, 316.012,
316.013, 317.010 and 317.018 by sections 1 to 5 of this 2009 Act
apply to tax years beginning on or after January 1, 2009. + }
  SECTION 7.  { + This 2009 Act takes effect on the 91st day
after the date on which the regular session of the Seventy-fifth
Legislative Assembly adjourns sine die. + }
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