Chapter 580 Oregon Laws 1999
Session Law
AN ACT
HB 2136
Relating to taxation;
amending ORS 314.835, 314.840, 316.013, 316.048, 316.117, 316.122, 316.127,
316.130 and 316.162; and repealing ORS 317.368.
Be It Enacted by the People of the State of Oregon:
SECTION 1.
ORS 314.835 is amended to read:
314.835. (1) Except as otherwise specifically provided by law,
it shall be unlawful for the Department of Revenue or any officer or employee
of the department to divulge or make known in any manner the amount of income, expense, deduction, exclusion or credit
or any particulars set forth or disclosed in any report or return required in
the administration of ORS 310.630 to 310.706, required in the administration of
any local tax pursuant to ORS 305.620, or required under a law imposing a tax
upon or measured by net income. It shall be unlawful for any person or entity
to whom information is disclosed or given by the department pursuant to ORS
314.840 (2) or any other provision of state law to divulge or use such
information for any purpose other than that specified in the provisions of law
authorizing the use or disclosure. No subpoena or judicial order shall be
issued compelling the department or any of its officers or employees, or any
person who has acquired information pursuant to ORS 314.840 (2) or any other
provision of state law to divulge or make known the amount of income, expense, deduction, exclusion or credit
or any particulars set forth or disclosed in any report or return except where
the taxpayer's liability for income tax is to be adjudicated by the court from
which such process issues.
(2) As used in this section:
(a) "Officer," "employee" or
"person" includes an authorized representative of the officer,
employee or person, or any former officer, employee or person, or an authorized
representative of such former officer, employee or person.
(b) "Particulars" includes, but is not limited to, a
taxpayer's name, address, telephone number, social security number, employer identification number or other
taxpayer identification number and the amount of refund claimed by or granted
to a taxpayer.
SECTION 2.
ORS 314.840 is amended to read:
314.840. (1) The Department of Revenue may:
(a) Furnish any taxpayer or authorized representative, upon
request of the taxpayer or representative, with a copy of the taxpayer's income
tax return filed with the department for any year, or with a copy of any report
filed by the taxpayer in connection with the return.
(b) Publish lists of taxpayers who are entitled to unclaimed
tax refunds.
(c) Publish statistics so classified as to prevent the
identification of income or any particulars contained in any report or return.
(d) Disclose a taxpayer's name, address, telephone number,
refund amount, amount due, social security number, [or] employer
identification number or other taxpayer
identification number to the extent necessary in connection with collection
activities or the processing and mailing of correspondence or of forms for any
report, return or claim required in the administration of ORS 310.630 to
310.706, any local tax under ORS 305.620, or any law imposing a tax upon or
measured by net income.
(2) The department also may disclose and give access to
information described in ORS 314.835 to:
(a) The Governor of the State of Oregon or the authorized
representative of the Governor:
(A) With respect to an individual who is designated as being
under consideration for appointment or reappointment to an office or for
employment in the office of the Governor. The information disclosed shall be
confined to whether the individual:
(i) Has filed returns with respect to the taxes imposed by ORS
chapter 316 for those of not more than the three immediately preceding years
for which the individual was required to file an Oregon individual income tax
return.
(ii) Has failed to pay any tax within 30 days from the date of
mailing of a deficiency notice or otherwise respond to a deficiency notice
within 30 days of its mailing.
(iii) Has been assessed any penalty under the Oregon personal
income tax laws and the nature of the penalty.
(iv) Has been or is under investigation for possible criminal
offenses under the Oregon personal income tax laws. Information disclosed
pursuant to this paragraph shall be used only for the purpose of making the
appointment, reappointment or decision to employ or not to employ the
individual in the office of the Governor.
(B) For use by an officer or employee of the Oregon Department
of Administrative Services duly authorized or employed to prepare revenue
estimates, or a person contracting with the Oregon Department of Administrative
Services to prepare revenue estimates, in the preparation of revenue estimates
required for the Governor's budget under ORS 291.201 to 291.226, or required
for submission to the Emergency Board, or if the Legislative Assembly is in
session, to the Joint Committee on Ways and Means, and to the Legislative
Revenue Officer under ORS 291.342, 291.348 and 291.445. The information
disclosed or to which access is given under this subparagraph shall be confined
to the identity of a corporate taxpayer, the amount of the corporate tax
liability of the corporate taxpayer and the amount of the payments made by the
corporation to the Department of Revenue under the corporate excise and income
tax laws of this state. Any officer, employee or person furnished or granted
access to information under this subparagraph shall not remove the information
from the premises of the Department of Revenue.
(b) The Commissioner of Internal Revenue or authorized
representative, for tax purposes only.
(c) The proper officer of any state or the District of
Columbia, or their authorized representatives, for tax purposes only, if such
state or district has a provision of law which meets the requirements of any
applicable provision of the Internal Revenue Code as to confidentiality.
(d) The Multistate Tax Commission or its authorized
representatives, for tax purposes only. However, the Multistate Tax Commission
may make such information available to the Commissioner of Internal Revenue or
the proper officer of any state or the District of Columbia, or their
authorized representatives, for tax purposes only, if the state or district has
a provision of law which meets the requirements of any applicable provision of
the Internal Revenue Code as to confidentiality.
(e) The Attorney General, assistants and employees in the
Department of Justice, or other legal representative of the State of Oregon, to
the extent the department deems disclosure or access necessary for the
performance of the duties of advising or representing the department pursuant
to ORS 180.010 to 180.240 and the tax laws of this state.
(f) Employees of the State of Oregon, other than of the
Department of Revenue or Department of Justice, to the extent the department
deems disclosure or access necessary for such employees to perform their duties
under contracts or agreements between the department and any other department,
agency or subdivision of the State of Oregon, in the department's administration
of the tax laws.
(g) Other persons, partnerships, corporations and other legal
entities, and their employees, to the extent the department deems disclosure or
access necessary for the performance of such others' duties under contracts or
agreements between the department and such legal entities, in the department's
administration of the tax laws.
(h) The Legislative Revenue Officer or authorized
representatives upon compliance with ORS 173.850. Such officer or
representative shall not remove from the premises of the department any
materials that would reveal the identity of any taxpayer or any other person.
(i) The Department of Consumer and Business Services, to the
extent the department requires such information to determine whether it is appropriate
to adjust those workers' compensation benefits the amount of which is based
pursuant to ORS chapter 656 on the amount of wages or earned income received by
an individual.
(j) Any agency of the State of Oregon, or any person, or any
officer or employee of such agency or person to whom disclosure or access is
given by state law and not otherwise referred to in this section, including but
not limited to the Secretary of State as Auditor of Public Accounts under
section 2, Article VI of the Oregon Constitution; the Adult and Family Services
Division of the Department of Human Resources pursuant to ORS 314.860 and
418.135; the Support Enforcement Division of the Department of Justice and
district attorney regarding cases for which they are providing support
enforcement services under ORS 25.080; the State Board of Tax Service
Examiners, pursuant to ORS 673.710; and the State Board of Accountancy,
pursuant to ORS 673.415.
(k) The Director of the Department of Consumer and Business
Services to determine that a person complies with ORS chapter 656 and the
Director of the Employment Department to determine that a person complies with
ORS chapter 657, the following employer information:
(A) Identification numbers.
(B) Names and addresses.
(C) Inception date as employer.
(D) Nature of business.
(E) Entity changes.
(F) Date of last payroll.
(L) The Assistant Director for Mental Health and Developmental
Disability Services to determine that a person has the ability to pay for care
that includes services provided by the state institutions as described in ORS
179.321 or the Mental Health and Developmental Disability Services Division or
to collect any unpaid cost of care as provided by ORS chapter 179.
(m) Employees of the Employment Department to the extent the
Department of Revenue deems disclosure or access to information on a combined
tax report filed under ORS 316.168 is necessary to performance of their duties
in administering the tax imposed by ORS chapter 657.
(n) The State Fire Marshal to assist the State Fire Marshal in
carrying out duties, functions and powers under ORS 453.307 to 453.414, the
employer or agent name, address, telephone number and standard industrial
classification, if available.
(o) Employees of the Division of State Lands for the purposes
of identifying, locating and publishing lists of taxpayers entitled to
unclaimed refunds as required by the provisions of chapter 694, Oregon Laws
1993. The information shall be limited to the taxpayer's name, address and the
refund amount.
(3) Each officer or employee of the department and each person
described or referred to in subsection (2)(a), (e) to (k) or (m) to (o) of this
section to whom disclosure or access to the tax information is given under
subsection (2) of this section or any other provision of state law, prior to
beginning employment or the performance of duties involving such disclosure or
access, shall be advised in writing of the provisions of ORS 314.835 and
314.991, relating to penalties for the violation of ORS 314.835, and shall as a
condition of employment or performance of duties execute a certificate for the
department, in a form prescribed by the department, stating in substance that
the person has read these provisions of law, that the person has had them
explained and that the person is aware of the penalties for the violation of
ORS 314.835.
(4) The Department of Revenue may recover the costs of
furnishing the information described in subsection (2)(k), (L) and (n) to (o)
of this section from the respective agencies.
SECTION 3.
ORS 316.013 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 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 316.048 is amended to read:
316.048. The entire taxable income of a resident of this state
is the federal taxable income of the resident as defined in the laws of the
United States, with the modifications, additions and subtractions provided in
this chapter and other laws of this
state applicable to personal income taxation.
SECTION 5.
ORS 316.117 is amended to read:
316.117. (1) Except as provided under subsection (2) of this
section, the proportion for making a proration for nonresident taxpayers of the
standard deduction or itemized deductions, the personal exemption credits and
any accrued federal or foreign income taxes, or for part-year resident
taxpayers of the amount of the tax, between Oregon source income and income
from all other sources is the federal adjusted gross income of the taxpayer
from Oregon sources divided by the taxpayer's federal adjusted gross income
from all sources. If the numerator of the fraction described in this subsection
is greater than the denominator, the proportion of 100 percent shall be used in
the proration required by this section. As used in this subsection,
"federal adjusted gross income" means the federal adjusted gross
income of the taxpayer with the additions, subtractions and other modifications
to federal taxable income [contained in
this chapter] that relate to adjusted gross income for personal income tax purposes.
(2) For part-year resident trusts, the proration made under
this section shall be made by reference to the taxable income of the fiduciary.
SECTION 6.
ORS 316.122 is amended to read:
316.122. (1) If the federal taxable income of husband and wife
(one being a part-year resident and the other a nonresident) is determined on a
joint federal return, their taxable income in this state shall be separately
determined, unless they elect to file a joint return, in which case their tax
on their joint income shall be determined in this state pursuant to ORS 316.037
(3).
(2) If the federal taxable income of husband and wife (one
being a full-year resident and the other a part-year resident) is determined on
a joint federal return, their taxable income in this state shall be separately
determined, unless they elect to file a joint return, in which case their tax
on their joint income shall be determined in this state pursuant to ORS 316.037
(2).
(3) If the federal taxable income of husband and wife (one
being a full-year resident and the other a nonresident) is determined on a
joint federal return, their taxable income in the state shall be separately
determined, unless they elect to file a joint return, in which case their tax
on their joint income shall be determined in this state pursuant to ORS 316.037
(3).
(4) For purposes of computing the tax of a husband and wife
under this section, if one of the spouses is a full-year resident individual,
then as used in ORS 316.037 (2) or (3), that spouse's taxable income derived
from Oregon sources is that spouse's entire federal taxable income, defined in
the laws of the United States, with the modifications, additions and
subtractions provided in this chapter
and other laws of this state applicable to personal income taxation.
(5) The provisions of ORS 316.367 with respect to joint returns
apply if both husband and wife are part-year residents or full-year
nonresidents.
SECTION 7.
ORS 316.127 is amended to read:
316.127. (1) The adjusted gross income of a nonresident derived
from sources within this state is the sum of the following:
(a) The net amount of items of income, gain, loss and deduction
entering into the nonresident's federal adjusted gross income that are derived
from or connected with sources in this state including (A) any distributive
share of partnership income and deductions and (B) any share of estate or trust
income and deductions; and
(b) The portion of the modifications, additions or subtractions
to federal taxable income provided in this chapter and other laws of this state that relate to adjusted gross income
derived from sources in this state for
personal income tax purposes, including any modifications attributable to
the nonresident as a partner.
(2) Items of income, gain, loss and deduction derived from or
connected with sources within this state are those items attributable to:
(a) The ownership or disposition of any interest in real or
tangible personal property in this state; and
(b) A business, trade, profession or occupation carried on in
this state.
(3) Income from intangible personal property, including
annuities, dividends, interest and gains from the disposition of intangible
personal property, constitutes income derived from sources within this state
only to the extent that such income is from property employed in a business,
trade, profession or occupation carried on in this state.
(4) Deductions with respect to capital losses, net long-term
capital gains, and net operating losses shall be based solely on income, gains,
losses and deductions derived from or connected with sources in this state,
under regulations to be prescribed by the Department of Revenue, but otherwise
shall be determined in the same manner as the corresponding federal deductions.
(5) Notwithstanding subsection (3) of this section, the income
of an S corporation for federal income tax purposes derived from or connected
with sources in this state does constitute income derived from sources within
this state for a nonresident individual who is a shareholder of such a
corporation, and a net operating loss of such corporation derived from or
connected with sources in this state does constitute a loss or deduction
connected with sources in this state for such a nonresident individual.
(6) If a business, trade, profession or occupation is carried
on partly within and partly without this state, the determination of net income
derived from or connected with sources within this state shall be made by
apportionment and allocation under ORS 314.605 to 314.675.
(7) Compensation paid by the United States for service in the
Armed Forces of the United States performed by a nonresident does not
constitute income derived from sources within this state.
(8) Compensation paid by the United States to a nonresident for
services performed by the nonresident as an employee of the United States at a
hydroelectric facility does not constitute income derived from sources within
this state if the hydroelectric facility:
(a) Is owned by the United States;
(b) Is located on the Columbia River; and
(c) Contains portions located within both this state and
another state.
(9)(a) Retirement income received by a nonresident does not
constitute income derived from sources within this state.
(b) As used in this section, "retirement income"
means retirement income as that term is defined in section 114, Title 4 of the
United States Code, as amended and in effect for the tax period.
SECTION 8.
ORS 316.130 is amended to read:
316.130. (1) The taxable income for a full-year nonresident
individual is adjusted gross income attributable to sources within this state
determined under ORS 316.127, with the modifications (except those provided
under subsection (2) of this section) as otherwise provided under this chapter and other laws of this state applicable to
personal income taxation, less the deductions allowed under subsection (2)
of this section.
(2)(a) A full-year nonresident individual shall be allowed the
deduction for a standard deduction or itemized deductions allowable to a
resident under ORS 316.695 (1) in the proportion provided in ORS 316.117.
(b) A full-year nonresident individual shall be allowed to
deduct the amount of any accrued federal income taxes and foreign country
income taxes as provided in ORS 316.690 in the proportion provided in ORS
316.117.
(c)(A) A full-year nonresident individual shall be allowed to
deduct the amount of any alimony or separate maintenance payments paid during
such individual's taxable year in the proportion provided in ORS 316.117 except
that in determining the proportion the taxpayer's adjusted gross income shall
not include a deduction for alimony. For purposes of this paragraph,
"alimony or separate maintenance payment" has the meaning given the
phrase in section 215 of the Internal Revenue Code.
(B) No deduction shall be allowed under this paragraph if the
alimony or separate maintenance payment is not includible in the gross income
of the nonresident individual for federal income tax purposes under section 682
of the Internal Revenue Code.
(3)(a) A full-year nonresident who is a self-employed
individual shall be allowed to deduct that individual's contributions to a
qualified plan, deductible on that individual's federal income tax return
pursuant to section 401 of the Internal Revenue Code, in the proportion that
the individual's earned income from Oregon sources bears to the individual's
earned income from all sources. "Earned income" has the meaning given
in section 401(c)(2) of the Internal Revenue Code. If the numerator of the
fraction described in this paragraph is greater than the denominator, the
proration of 100 percent shall be used.
(b) A full-year nonresident shall be allowed to deduct that
individual's qualified retirement contributions, deductible on that
individual's federal income tax return pursuant to section 219 of the Internal
Revenue Code, in the proportion that the individual's compensation from Oregon
sources bears to the individual's compensation from all sources.
"Compensation" has the meaning given in section 219(f)(1) of the
Internal Revenue Code.
(c) A full-year nonresident individual shall be allowed to
deduct the aggregate amounts paid in cash to a medical savings account,
deductible on the individual's federal income tax return pursuant to section
220 of the Internal Revenue Code, in the proportion that the individual's
compensation from Oregon sources bears to the individual's compensation from
all sources. Distributions from a medical savings account, if excluded from
income for federal income tax purposes, shall be excluded for Oregon income tax
purposes. Distributions from a medical savings account, if included in income
for federal tax purposes, shall be included in income for Oregon tax purposes
to the extent that an exclusion has been allowed for contributions to the
medical savings account for Oregon tax purposes in a previous year.
SECTION 9.
ORS 316.162 is amended to read:
316.162. As used in ORS 316.162 to 316.212:
(1) "Internal Revenue Code" means the federal
Internal Revenue Code, as amended and in effect on December 31, 1996.
(2) "Number of withholding exemptions claimed" means
the number of withholding exemptions claimed in a withholding exemption
certificate in effect under ORS 316.182, except that if no such certificate is
in effect, the number of withholding exemptions claimed is considered to be
zero.
(3) "Wages" means remuneration for services performed
by an employee for an employer, including the cash value of all remuneration
paid in any medium other than cash, except that "wages" does not
include remuneration paid:
(a) For active service in the Armed Forces of the United States
as to which no withholding is required by the Internal Revenue Code.
(b) To an employee of a common carrier to the extent that
sections 40116 and 14503, title 49, United States Code prohibits the
remuneration from withholding for state income taxes.
(c) For domestic service in a private home, a local college
club or a local chapter of a college fraternity or sorority.
(d) For casual labor not in the course of the employer's trade
or business.
(e) To an employee whose services to the employer consist
solely of labor in connection with the planting, cultivating or harvesting of
seasonal agricultural crops if the total amount paid to such employee is less
than $300 annually.
(f) To seamen who are exempt from garnishment, attachment or
execution under title 46 of the United States Code.
(g) To persons temporarily employed as emergency forest fire
fighters.
(h) To employees' trusts exempt from tax under provisions of
the federal Internal Revenue Code.
(i) For services performed by a duly ordained, commissioned or
licensed minister of a church in the exercise of the minister's ministry or by
a member of a religious order in the exercise of religious duties required by
such order, which duties are not commercial in nature.
(j) For services performed by an independent contractor, as
that term is defined in ORS 670.600.
(k) When the
remuneration is exempt from taxation under this chapter.
(4) "Employer" means:
(a) A person who is in such relation to another person that the
person may control the work of that other person and direct the manner in which
it is to be done; or
(b) An officer or employee of a corporation, or a member or
employee of a partnership, who as such officer, employee or member is under a
duty to perform the acts required of employers by ORS 316.167, 316.182,
316.197, 316.202 and 316.207.
SECTION 10. ORS 317.368 is repealed.
Approved by the Governor
July 12, 1999
Filed in the office of
Secretary of State July 12, 1999
Effective date October 23,
1999
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