Chapter 316 — Personal Income Tax

2009 EDITION

PERSONAL INCOME TAX

REVENUE AND TAXATION

GENERAL PROVISIONS

316.002 Short title

316.003 Goals

316.007 Policy

316.012 Terms have same meaning as in federal laws; federal law references

316.013 Determination of federal adjusted gross income

316.014 Determination of net operating loss, carryback and carryforward

316.018 Application of Payment-in-Kind Tax Treatment Act of 1983

316.022 General definitions

316.024 Application of federal law to determination of taxable income

316.027 “Resident” defined

316.032 Department to administer law; policy as to federal conflicts and technical corrections

316.037 Imposition and rate of tax

316.042 Amount of tax where joint return used

316.045 Tax rate imposed on certain long-term capital gain from farming; requirements

316.047 Transitional provision to prevent doubling income or deductions

316.048 Taxable income of resident

316.054 Social Security benefits to be subtracted from federal taxable income

316.056 Interest or dividends on obligations of state or public bodies subtracted from federal taxable income

316.074 Exemption for service in Vietnam on missing status

316.076 Deduction for physician in medically disadvantaged area

CREDITS

316.078 Tax credit for dependent care expenses necessary for employment

316.079 Credit for certain disabilities

316.082 Credit for taxes paid another state; rules

316.085 Personal exemption credit

316.087 Credit for the elderly or permanently and totally disabled

316.095 Credit for sewage treatment works connection costs

316.099 Credit for early intervention services for child with disability; rules of State Board of Education

316.102 Credit for political contributions

316.109 Credit for tax by another jurisdiction on sale of residential property; rules

316.116 Credit for alternative energy device or alternative fuel vehicle

(Temporary provisions relating to tax credit for manufactured dwelling park closures are compiled as notes following ORS 316.116)

TAXATION OF NONRESIDENTS

316.117 Proration between Oregon income and other income for nonresidents, part-year residents and trusts

316.118 Pro rata share of S corporation income of nonresident shareholder

316.119 Proration of part-year resident’s income between Oregon income and other income; alternative proration for pass-through entity items

316.122 Separate or joint determination of income for husband and wife

316.124 Determination of adjusted gross income of nonresident partner

316.127 Income of nonresident from Oregon sources

316.130 Determination of taxable income of full-year nonresident

316.131 Credit allowed to nonresident for taxes paid to state of residence; exception

ADDITIONAL CREDITS

(Costs in Lieu of Nursing Home Care)

316.147 Definitions for ORS 316.147 to 316.149

316.148 Credit for expenses in lieu of nursing home care; limitation

316.149 Evidence of eligibility for credit

(Retirement Income)

316.157 Credit for retirement income

316.158 Effect upon ORS 316.157 of determination of invalidity; severability

316.159 Subtraction for certain retirement distributions contributed to retirement plan during period of nonresidency; substantiation rules

COLLECTION OF TAX AT SOURCE OF PAYMENT

(Generally)

316.162 Definitions for ORS 316.162 to 316.221

316.164 When surety bond or letter of credit required of employer; enforcement

316.167 Withholding of tax required; elective provisions for agricultural employees; liability of supplier of funds to employer for taxes

316.168 Employer required to file combined quarterly tax report

316.169 Circumstances in which person other than employer required to withhold tax

316.171 Application of tax and report to administration of tax laws

316.172 Tax withholding tables to be prepared by department

316.177 Reliance on withholding statement; penalty for statement without reasonable basis

316.182 Exemption certificate

316.187 Amount withheld is in payment of employee’s tax

316.189 Withholding of state income taxes from certain periodic payments

316.191 Withholding taxes at time and in manner other than required by federal law; rules

316.193 Withholding of state income taxes from federal retired pay for members of uniformed services

316.194 Withholding from lottery prize payments; rules

316.196 Withholding of state income taxes from federal retirement pay for civil service annuitant

316.197 Payment to department by employer; interest on delinquent payments

316.198 Payment by electronic funds transfer; phase-in; rules

316.202 Reports by employer; waiver; penalty for failure to report; rules

316.207 Liability for tax; warrant for collection; conference; appeal

316.209 Applicability of ORS 316.162 to 316.221 when services performed by qualified real estate broker or direct seller

316.212 Application of penalties, misdemeanors and jeopardy assessment; employer as taxpayer

(Professional Athletic Teams)

316.213 Definitions for ORS 316.213 to 316.219

316.214 Withholding requirements for members of professional athletic teams

316.218 Annual report of compensation paid to professional athletic team members

316.219 Rules

(Qualifying Film Productions)

316.220 Alternative withholding requirements for qualifying film production compensation; rules; refund prohibition

316.221 Disposition of withheld amounts

NONRESIDENT REPORTING

316.223 Alternate methods of filing, reporting and calculating liability for nonresident employer and employee in state temporarily; rules

ESTATES AND TRUSTS

(Generally)

316.267 Application of chapter to estates and certain trusts

316.272 Computation and payment on estate or trust

316.277 Associations taxable as corporations exempt from chapter

316.279 Treatment of business trusts and business trusts income

(Resident Estates and Trusts)

316.282 Definitions related to trusts and estates; rules

316.287 “Fiduciary adjustment” defined; shares proportioned; rules

316.292 Credit for taxes paid another state

316.298 Accumulation distribution credit

(Nonresident Estates and Trusts)

316.302 “Nonresident estate or trust” defined

316.307 Income of nonresident estate or trust

316.312 Determination of Oregon share of income

316.317 Credit to beneficiary for accumulation distribution

RETURNS; PAYMENTS; REFUNDS

316.362 Persons required to make returns

316.363 Returns; instructions

316.364 Flesch Reading Ease Score form instructions

316.367 Joint return by husband and wife

316.368 When joint return liability divided; showing of marital status and hardship; rules

316.369 Circumstances where one spouse relieved of joint return liability; rules

316.372 Minor to file return; unpaid tax assessable against parent; when parent may file for minor

316.377 Individual under disability

316.382 Returns by fiduciaries

316.387 Election for final tax determination by personal representative; period for assessment of deficiency; discharge of personal representative from personal liability for tax

316.392 Notice of qualification of receiver and others

316.417 Date return considered made or advance payment made

316.457 Department may require copy of federal return

316.462 Change of election

316.472 Tax treatment of common trust fund; information return required

316.490 Refund as contribution to Alzheimer’s Disease Research Fund

316.491 Refund as contribution to Oregon Military Emergency Financial Assistance Program

316.493 Refund as contribution for prevention of child abuse and neglect

DISTRIBUTION OF REVENUE

316.502 Distribution of revenue to General Fund; working balance; refundable credit payments

PAYMENT OF ESTIMATED TAXES

316.557 Definition of “estimated tax”

316.559 Application of ORS 316.557 to 316.589 to estates and trusts

316.563 When declaration of estimated tax required; exception; effect of short tax year; content; amendment; rules

316.567 Joint declaration of husband and wife; liability; effect on nonjoint returns; rules

316.569 When declaration required of nonresident

316.573 When individual not required to file declaration

316.577 Date of filing declaration

316.579 Amount of estimated tax to be paid with declaration; installment schedule; prepayment of installment

316.583 Effect of payment of estimated tax or installment; credit for overpayment of prior year taxes; rules

316.587 Effect of underpayment of estimated tax; computation of underpayment; interest; when not imposed

316.588 When interest on underpayment not imposed

316.589 Application to short tax years and tax years beginning on other than January 1

MODIFICATIONS OF TAXABLE INCOME

(Generally)

316.680 Modification of taxable income

(Temporary provisions relating to health insurance benefits and domestic partnerships registered during 2008 are compiled as notes following ORS 316.680)

316.681 Interest or dividends to benefit self-employed or individual retirement accounts

316.683 State exempt-interest dividends; rules

316.685 Federal income tax deductions; accrual method of accounting required; adjustment for federal earned income credit

316.687 Amount in excess of standard deduction for child, if child’s income included on parent’s federal return; limitation

316.690 Foreign income taxes

316.695 Additional modifications of taxable income; rules

316.697 Fiduciary adjustment

316.698 Subtraction for qualifying film production labor rebates

316.699 Subtraction for college savings network account contributions; limitations; carryforward

316.707 Computation of depreciation of property under federal law; applicability

316.716 Differences in basis on federal and state return

316.737 Amount specially taxed under federal law to be included in computation of state taxable income

316.738 Modification of taxable income when deferred gain is recognized as result of out-of-state disposition of property

316.739 Deferral of deduction for certain amounts deductible under federal law

Note Addition for unemployment compensation excluded for federal tax purposes in 2009 tax year--2009 c.909 §42

316.744 Cash payments for energy conservation

(Additional Personal Exemption Credits)

316.752 Definitions for ORS 316.752 to 316.771

316.758 Additional personal exemption credit for persons with severe disabilities

316.765 Additional personal exemption credit for spouse of person with severe disability; conditions

316.771 Proof of status for exemption credit

(Exemptions)

316.777 Income derived from sources within federally recognized Indian country exempt from tax

316.778 Small city business development exemption; rules

316.783 Amounts received for condemnation of Indian tribal lands

316.785 Income derived from exercise of Indian fishing rights

316.787 Payments to Japanese and Aleuts under Civil Liberties Act of 1988

316.789 Persian Gulf Desert Shield active military service

316.791 Compensation for active duty military service

(Exemption for Certain Sales or Closures of Manufactured Dwelling Parks)

316.795 Exemption for payments to tenants of manufactured dwelling parks upon termination of rental agreement

(Additional Modifications of Taxable Income)

316.806 Definitions for ORS 316.806 to 316.818

316.812 Certain traveling expenses

316.818 Proof of expenses

316.821 Federal election to deduct sales taxes; addition for state purposes

316.824 Definitions for ORS 316.824 and 316.832

316.832 Travel expenses for loggers

316.836 Qualified production activities income

316.837 Addition for federal prescription drug plan subsidies excluded for federal tax purposes

316.838 Art object donation

316.844 Special computation of gain or loss where farm use value used

316.845 Exception to ORS 316.844

316.846 Scholarship awards used for housing expenses

316.848 Individual development accounts

316.852 Qualified donations and sales to educational institutions

DEFERRAL OF REINVESTED GAIN

316.871 Definitions for ORS 316.872

316.872 Deferral of gain on sale of small business securities

316.873 Definitions for ORS 316.873 to 316.884

316.874 Deferral of gain from sale of capital asset; reinvestment of gain; disposition of interest or asset in which gain reinvested

316.876 Gain that may not be deferred under ORS 316.873 to 316.884

316.877 Declaration of intent to reinvest in qualified business interest, qualified investment fund or qualified business asset required for deferral of gain

316.878 Basis of qualified business interest, qualified investment fund or qualified business asset in which gain reinvested

316.879 Events causing deferral of gain to cease; recognition of deferred gain

316.881 Sale or disposition of reinvestment interest; period for assessment of deficiency; failure to reinvest after declaration filed

316.882 Death or disability; election of successor related party to continue deferral; basis upon death if deferral not continued

316.883 Rules for ORS 316.873 to 316.884; adoption by Department of Revenue

316.884 Deferral of gain for tax years beginning in 1996; applicability of ORS 316.873 to 316.884; modifications

316.970 Effect of chapter 493, Oregon Laws 1969

PENALTIES

316.992 Penalty for filing incorrect return that is based on frivolous position or is intended to delay or impede administration; appeal

GENERAL PROVISIONS

316.002 Short title. This chapter may be cited as the Personal Income Tax Act of 1969. [1969 c.493 §1; 1995 c.79 §164]

316.003 Goals. (1) The goals of the Legislative Assembly are to achieve for Oregon’s citizens a tax system which recognizes:

(a) Fairness and equity as its basic values; and

(b) That the total tax system should use seven guiding principles as measures by which to evaluate tax proposals.

(2) Those guiding principles are:

(a) Ability to pay;

(b) Fairness;

(d) Even distribution;

(e) The tax system should be equitable where the minimum aspects of a fair system are:

(A) That it shields genuine subsistence income from taxation;

(B) That it is not regressive; and

(f) Adequacy; and

(g) Flexibility.

(3) To meet those goals of Oregon’s tax system, any tax must be considered in conjunction with the effects of all other taxes on Oregonians. [1991 c.457 §1a]

Note: 316.003 was enacted into law by the Legislative Assembly but was not added to or made a part of ORS chapter 316 or any series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation.

316.005 [1953 c.304 §1; repealed by 1969 c.493 §99]

316.007 Policy. It is the intent of the Legislative Assembly, by the adoption of this chapter, insofar as possible, to:

(1) Make the Oregon personal income tax law identical in effect to the provisions of the Internal Revenue Code relating to the measurement of taxable income of individuals, estates and trusts, modified as necessary by the state’s jurisdiction to tax and the revenue needs of the state;

(2) Achieve this result by the application of the various provisions of the Internal Revenue Code relating to the definition of income, exceptions and exclusions therefrom, deductions (business and personal), accounting methods, taxation of trusts, estates and partnerships, basis, depreciation and other pertinent provisions relating to gross income as defined therein, modified as provided in this chapter, resulting in a final amount called “taxable income”; and

(3) Impose a tax on residents of this state measured by taxable income wherever derived and to impose a tax on the income of nonresidents that is ascribable to sources within this state. [1969 c.493 §2; 1971 s.s. c.4 §1; 1987 c.293 §1; 1989 c.625 §1; 2003 c.46 §34]

316.010 [1953 c.304 §2; 1953 c.552 §1; repealed by 1969 c.493 §99]

316.012 Terms have same meaning as in federal laws; federal law references. 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 on May 1, 2009. [1969 c.493 §3; 1971 s.s. c.4 §2; 1975 c.672 §3; 1983 c.162 §59; 1985 c.802 §1; 1987 c.293 §2; 1989 c.625 §2; 1991 c.457 §1; 1993 c.726 §27; 1995 c.556 §1; 1997 c.839 §1; 1999 c.224 §7; 2001 c.660 §35; 2003 c.77 §14; 2005 c.519 §9; 2005 c.832 §27; 2007 c.614 §12; 2008 c.45 §13; 2009 c.5 §23; 2009 c.909 §24]

Note: The amendments to 316.012 by section 25, chapter 909, Oregon Laws 2009, apply to tax years beginning on or after January 1, 2011. See section 46, chapter 909, Oregon Laws 2009. The text that applies to tax years beginning on or after January 1, 2011, is set forth for the user’s convenience.

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 May 1, 2009; or

(2) If related to the definition of taxable income, as applicable to the tax year of the taxpayer.

316.013 Determination of federal adjusted gross income. 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 May 1, 2009, 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. [1985 c.802 §3a; 1999 c.580 §3; 2009 c.5 §29; 2009 c.909 §31]

Note: The amendments to 316.013 by section 32, chapter 909, Oregon Laws 2009, apply to tax years beginning on or after January 1, 2011. See section 46, chapter 909, Oregon Laws 2009. The text that applies to tax years beginning on or after January 1, 2011, is set forth for the user’s convenience.

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.

316.014 Determination of net operating loss, carryback and carryforward. (1) In the computation of state taxable income the net operating loss, net operating loss carryback and net operating loss carryforward shall be the same as that contained in the Internal Revenue Code as it applies to the tax year for which the return is filed and shall not be adjusted for any changes or modifications contained in this chapter or by the case law of this state.

(2) In the case of a nonresident, the net operating loss deduction, net operating loss carryback and net operating loss carryforward shall be that described in subsection (1) of this section which is attributable to Oregon sources.

(3) If any provision in ORS 316.047 or 316.127 appears to require an adjustment to a net operating loss, net operating loss carryback or net operating loss carryforward contrary to the provisions of this section, that adjustment shall not be made. [1985 c.802 §18; 1997 c.839 §2; 2003 c.77 §15]

316.015 [1953 c.304 §3; 1953 c.552 §2; 1959 c.211 §3; 1959 c.593 §1 (referred and rejected); 1963 c.627 §2 (referred and rejected); repealed by 1969 c.493 §99; amended by 1969 c.520 §41]

316.016 [1973 c.119 §2; repealed by 1975 c.672 §8]

316.017 [1969 c.493 §3a; repealed by 1969 c.493 §3b]

316.018 Application of Payment-in-Kind Tax Treatment Act of 1983. The Payment-in-Kind Tax Treatment Act of 1983 (P.L. 98-4, as amended by section 1061 of P.L. 98-369) applies for purposes of determining Oregon taxable income under this chapter, notwithstanding that the Act is not part of the Internal Revenue Code. [1985 c.802 §42; 2003 c.46 §35]

316.019 [1985 c.802 §46; repealed by 1997 c.839 §69]

316.020 [1953 c.304 §4; repealed by 1969 c.493 §99]

316.021 [1985 c.802 §58; 1987 c.293 §3; renumbered 314.029 in 1993]

316.022 General definitions. As used in this chapter, unless the context requires otherwise:

(1) “Department” means the Department of Revenue.

(2) “Director” means the Director of the Department of Revenue.

(3) “Individual” means a natural person, including aliens and minors.

(4) A “nonresident” means an individual who is not a resident of this state.

(5) “Part-year resident” means an individual taxpayer who changes status during a tax year from resident to nonresident or from nonresident to resident.

(6) “Taxable income” means the taxable income as defined in subsection (a) or (b), section 63 of the Internal Revenue Code, with such additions, subtractions and adjustments as are prescribed by this chapter.

(7) “Taxpayer” means any natural person, estate, trust, or beneficiary whose income is in whole or in part subject to the taxes imposed by this chapter, or any employer required by this chapter to withhold personal income taxes from the compensation of employees for remittance to the state. [1969 c.493 §§4,5,6,7,9 and 1969 c.520 §42b; 1985 c.141 §2; 1987 c.293 §4]

316.023 [1987 c.293 §§71,72,73; renumbered 314.033 in 1993]

316.024 Application of federal law to determination of taxable income. Section 243 of the Tax Reform Act of 1986 (P.L. 99-514) does not apply for purposes of determining taxable income under this chapter. [1987 c.293 §12a; 2003 c.46 §36]

316.025 [1953 c.304 §5; repealed by 1957 c.632 §1 (314.075 and 314.080 enacted in lieu of 316.025, 316.030, 317.015 and 317.020)]

316.027 “Resident” defined. (1) For purposes of this chapter, unless the context requires otherwise:

(a) “Resident” or “resident of this state” means:

(A) An individual who is domiciled in this state unless the individual:

(i) Maintains no permanent place of abode in this state;

(ii) Does maintain a permanent place of abode elsewhere; and

(iii) Spends in the aggregate not more than 30 days in the taxable year in this state; or

(B) An individual who is not domiciled in this state but maintains a permanent place of abode in this state and spends in the aggregate more than 200 days of the taxable year in this state unless the individual proves that the individual is in the state only for a temporary or transitory purpose.

(b) “Resident” or “resident of this state” does not include:

(A) An individual who is a qualified individual under section 911(d)(1) of the Internal Revenue Code for the tax year;

(B) A spouse of a qualified individual under section 911(d)(1) of the Internal Revenue Code, if the spouse has a principal place of abode for the tax year that is not located in this state; or

(C) A resident alien under section 7701(b) of the Internal Revenue Code who would be considered a qualified individual under section 911(d)(1) of the Internal Revenue Code if the resident alien were a citizen of the United States.

(2) For purposes of subsection (1)(a)(B) of this section, a fraction of a calendar day shall be counted as a whole day. [1969 c.493 §8; 1987 c.158 §49; 1995 c.79 §165; 1999 c.1096 §1]

316.030 [1953 c.304 §6; repealed by 1957 c.632 §1 (314.075 and 314.080 enacted in lieu of 316.025, 316.030, 317.015 and 317.020)]

316.032 Department to administer law; policy as to federal conflicts and technical corrections. (1) The Department of Revenue shall administer and enforce this chapter.

(2) 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.

(3) When portions of the Internal Revenue Code incorporated by reference as provided in ORS 316.007 or 316.012 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.

(4)(a) When portions of the Internal Revenue Code incorporated by reference as provided in ORS 316.007 or 316.012 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 ORS 316.007 or 316.012 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. [1969 c.493 §10; 1985 c.802 §1a; 1987 c.293 §5; 1997 c.839 §3]

316.035 [1953 c.304 §117; repealed by 1969 c.493 §99 and 1969 c.520 §49]

316.037 Imposition and rate of tax. (1)(a) A tax is imposed for each taxable year on the entire taxable income of every resident of this state. The amount of the tax shall be determined in accordance with the following table:

______________________________________________________________________________

If taxable income is: The tax is:

Not over $2,000 5% of

taxable

income

Over $2,000 but not

over $5,000 $100 plus 7%

of the excess

over $2,000

Over $5,000 $310 plus 9%

of the excess

over $5,000

______________________________________________________________________________

(b) For tax years beginning in each calendar year, the Department of Revenue shall adopt a table that shall apply in lieu of the table contained in paragraph (a) of this subsection, as follows:

(A) The minimum and maximum dollar amounts for each rate bracket for which a tax is imposed shall be increased by the cost-of-living adjustment for the calendar year.

(B) The rate applicable to any rate bracket as adjusted under subparagraph (A) of this paragraph shall not be changed.

(C) The amounts setting forth the tax, to the extent necessary to reflect the adjustments in the rate brackets, shall be adjusted.

(c) For purposes of paragraph (b) of this subsection, the cost-of-living adjustment for any calendar year is the percentage (if any) by which the monthly averaged U.S. City Average Consumer Price Index for the 12 consecutive months ending August 31 of the prior calendar year exceeds the monthly averaged index for the second quarter of the calendar year 1992.

(d) As used in this subsection, “U.S. City Average Consumer Price Index” means the U.S. City Average Consumer Price Index for All Urban Consumers (All Items) as published by the Bureau of Labor Statistics of the United States Department of Labor.

(e) If any increase determined under paragraph (b) of this subsection is not a multiple of $50, the increase shall be rounded to the next lower multiple of $50.

(2) A tax is imposed for each taxable year upon the entire taxable income of every part-year resident of this state. The amount of the tax shall be computed under subsection (1) of this section as if the part-year resident were a full-year resident and shall be multiplied by the ratio provided under ORS 316.117 to determine the tax on income derived from sources within this state.

(3) A tax is imposed for each taxable year on the taxable income of every full-year nonresident that is derived from sources within this state. The amount of the tax shall be determined in accordance with the table set forth in subsection (1) of this section. [1969 c.493 §11; 1975 c.674 §1; 1977 c.872 §1; 1979 c.649 §1; 1983 c.684 §23; 1985 c.141 §1; 1987 c.293 §6; 1991 c.457 §1b; 2001 c.660 §11; 2003 c.46 §37]

Note 1: The amendments to 316.037 by section 1, chapter 746, Oregon Laws 2009, were referred to the people by referendum petition for their approval or rejection at a special election to be held throughout this state on January 26, 2010, and, if approved, apply to tax years beginning on or after January 1, 2009, and before January 1, 2012. See section 8, chapter 714, Oregon Laws 2009, and section 7, chapter 746, Oregon Laws 2009. 316.037, as amended by section 1, chapter 746, Oregon Laws 2009, is set forth for the user’s convenience.

316.037. (1)(a) A tax is imposed for each taxable year on the entire taxable income of every resident of this state. The amount of the tax shall be determined in accordance with the following table:

______________________________________________________________________________

If taxable income is: The tax is:

Not over $2,000 5% of

taxable

income

Over $2,000 but not

over $5,000 $100 plus 7%

of the excess

over $2,000

Over $5,000 but not

over $125,000 $310 plus 9%

of the excess

over $5,000

Over $125,000 but not

over $250,000 $11,110 plus 10.8%

of the excess

over $125,000

Over $250,000 $24,610 plus 11%

of the excess

over $250,000

______________________________________________________________________________

(b) For tax years beginning in each calendar year, the Department of Revenue shall adopt a table that shall apply in lieu of the table contained in paragraph (a) of this subsection, as follows:

(A) Except as provided in subparagraph (D) of this paragraph, the minimum and maximum dollar amounts for each bracket for which a tax is imposed shall be increased by the cost-of-living adjustment for the calendar year.

(B) The rate applicable to any rate bracket as adjusted under subparagraph (A) of this paragraph shall not be changed.

(C) The amounts setting forth the tax, to the extent necessary to reflect the adjustments in the rate brackets, shall be adjusted.

(D) The rate brackets applicable to taxable income in excess of $125,000 may not be adjusted.

(e) If any increase determined under paragraph (b) of this subsection is not a multiple of $50, the increase shall be rounded to the next lower multiple of $50.

Note 2: The amendments to 316.037 by section 2, chapter 746, Oregon Laws 2009, were referred to the people by referendum petition for their approval or rejection at a special election to be held throughout this state on January 26, 2010, and, if approved, apply to tax years beginning on or after January 1, 2012. See section 8, chapter 714, Oregon Laws 2009, and section 7, chapter 746, Oregon Laws 2009. 316.037, as amended by sections 1 and 2, chapter 746, Oregon Laws 2009, is set forth for the user’s convenience.

______________________________________________________________________________

If taxable income is: The tax is:

Not over $2,000 5% of

taxable

income

Over $2,000 but not

over $5,000 $100 plus 7%

of the excess

over $2,000

Over $5,000 but not

over $125,000 $310 plus 9%

of the excess

over $5,000

Over $125,000 $11,110 plus 9.9%

of the excess

over $125,000

______________________________________________________________________________

(b) For tax years beginning in each calendar year, the Department of Revenue shall adopt a table that shall apply in lieu of the table contained in paragraph (a) of this subsection, as follows:

(B) The rate applicable to any rate bracket as adjusted under subparagraph (A) of this paragraph shall not be changed.

(C) The amounts setting forth the tax, to the extent necessary to reflect the adjustments in the rate brackets, shall be adjusted.

(D) The rate brackets applicable to taxable income in excess of $125,000 may not be adjusted.

(e) If any increase determined under paragraph (b) of this subsection is not a multiple of $50, the increase shall be rounded to the next lower multiple of $50.

Note 3: Section 8, chapter 746, Oregon Laws 2009, was referred to the people by referendum petition for their approval or rejection at a special election to be held throughout this state on January 26, 2010, and, if approved, applies to tax years beginning on or after January 1, 2009, and before January 1, 2010. See section 8, chapter 714, Oregon Laws 2009, and section 9, chapter 746, Oregon Laws 2009, as amended by section 44, chapter 909, Oregon Laws 2009. Section 8, chapter 746, Oregon Laws 2009, is set forth for the user’s convenience.

Sec. 8. The Department of Revenue shall waive any penalty or interest that would otherwise apply to taxes due if the penalty or interest is based on underpayment or underreporting that results solely from the amendments to ORS 316.037 and 316.695 by sections 1 and 3 of this 2009 Act. [2009 c.746 §8]

316.040 [1953 c.304 §7; repealed by 1969 c.493 §99]

316.042 Amount of tax where joint return used. In the case of a joint return of husband and wife, pursuant to ORS 316.122 or pursuant to ORS 316.367, the tax imposed by ORS 316.037 shall be twice the tax which would be imposed if the taxable income were cut in half. For purposes of this section, a return of a head of household or a surviving spouse, as defined in subsections (a) and (b) of section 2 of the Internal Revenue Code, shall be treated as a joint return of husband and wife. [1969 c.493 §12; 1975 c.674 §2; 1987 c.293 §7; 1987 c.647 §10]

316.045 Tax rate imposed on certain long-term capital gain from farming; requirements. (1) As used in this section:

(a) “Farming” means:

(A) Raising, harvesting and selling crops;

(B) Feeding, breeding, managing or selling livestock, poultry, fur-bearing animals or honeybees or the produce thereof;

(D) Stabling or training equines, including but not limited to providing riding lessons, training clinics and schooling shows;

(E) Propagating, cultivating, maintaining or harvesting aquatic species and bird and animal species to the extent allowed by the rules adopted by the State Fish and Wildlife Commission;

(F) On-site constructing and maintaining equipment and facilities used for the activities described in this subsection;

(G) Preparing, storing or disposing of, by marketing or otherwise, the products or by-products raised for human or animal use on land employed in activities described in this subsection; or

(H) Any other agricultural or horticultural activity or animal husbandry, or any combination of these activities, except that “farming” does not include growing and harvesting trees of a marketable species other than growing and harvesting cultured Christmas trees or certain hardwood timber described in ORS 321.267 (3) or 321.824 (3).

(b) “Section 1231 gain” has the meaning given that term in section 1231 of the Internal Revenue Code.

(2) Notwithstanding ORS 316.037, taxable income that consists of net long-term capital gain shall be subject to tax under this chapter at a rate of five percent if all of the following conditions apply:

(a) The gain is:

(A) Derived from the sale or exchange of capital assets consisting of ownership interests in a corporation, partnership or other entity in which, prior to the sale or exchange, the taxpayer owned at least a 10 percent ownership interest; or

(B) Section 1231 gain.

(b) The property that was sold or exchanged consisted of:

(A) Ownership interests in a corporation, partnership or other entity that is engaged in the trade or business of farming; or

(B) Property that is predominantly used in the trade or business of farming.

(c) The sale or exchange is to a person who is not related to the taxpayer under section 267 of the Internal Revenue Code.

(d) The sale or exchange constitutes a substantially complete termination of all of the taxpayer’s ownership interests in a trade or business that is engaged in farming or a substantially complete termination of all of the taxpayer’s ownership interests in property that is employed in the trade or business of farming. Ownership of a farm dwelling or farm homesite does not constitute ownership of property employed in the trade or business of farming.

(3) If the taxpayer has net long-term capital gain derived in part from the sale or exchange of property described in subsection (2)(b) of this section and in part from the sale or exchange of all other property, the net long-term capital gain that is subject to tax under this section shall be determined as follows:

(a) Compute the net long-term capital gain derived from all property described in subsection (2)(b) of this section that was sold or exchanged during the tax year.

(b) Compute the net capital gain or loss from the sale or exchange of all other property during the tax year.

(c) If the amount determined under paragraph (b) of this subsection is a net capital gain, the gain that is subject to tax under subsection (2) of this section shall be the amount determined under paragraph (a) of this subsection.

(d) If the amount determined under paragraph (b) of this subsection is a net capital loss, the gain that is subject to tax under subsection (2) of this section shall be the amount determined under paragraph (a) of this subsection minus the amount determined under paragraph (b) of this subsection. [2001 c.545 §2; 2003 c.454 §123; 2003 c.621 §98a]

316.047 Transitional provision to prevent doubling income or deductions. If any provision of the Internal Revenue Code or of this chapter requires that any amount be added to or deducted from federal gross income or the net income taxable under this chapter that previously had been added to or deducted from net income taxable under the Oregon law in effect prior to the taxpayer’s taxable year as to which this chapter is first effective, then, in such event, appropriate adjustment shall be made to the net income for the year or years subject to this chapter so as to prohibit the double taxation or the double deduction of any such amount that previously had entered into the computation of taxable income. Differences such as the difference in basis of property used by the taxpayer for federal and Oregon income tax returns and on account of the treatment of operating losses shall be resolved by application of this principle. However, the Department of Revenue, in its audit of a return, shall not apply any adjustment under this section which, in its opinion, if applied would result in an increase or decrease of tax liability of less than $25. [1969 c.493 §13; 1987 c.293 §8]

316.048 Taxable income of resident. 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. [Formerly 316.062; 1999 c.580 §4]

316.049 [1977 c.755 §2; renumbered 316.777]

316.050 [1977 c.553 §2; renumbered 316.783]

316.051 [1977 c.390 §2; renumbered 316.788]

316.052 [1977 c.390 §3; 1979 c.691 §2; renumbered 316.794]

316.053 [1977 c.390 §4; renumbered 316.799]

316.054 Social Security benefits to be subtracted from federal taxable income. In addition to the other modifications to federal taxable income contained in this chapter, there shall be subtracted from federal taxable income the amount of any Social Security benefits, as defined in section 86 of the Internal Revenue Code (Title II Social Security or tier 1 railroad retirement benefits) included in gross income for federal income tax purposes under section 86 of the Internal Revenue Code. [1985 c.154 §2; 1997 c.839 §4]

316.055 [1953 c.304 §8; 1953 c.552 §3; 1957 s.s. c.15 §1; 1963 c.627 §3 (referred and rejected); repealed by 1969 c.493 §99]

316.056 Interest or dividends on obligations of state or public bodies subtracted from federal taxable income. In addition to the modifications to federal taxable income contained in this chapter, there shall be subtracted from federal taxable income the interest or dividends on obligations of the State of Oregon or a public body, as defined in ORS 287A.001, to the extent includable in gross income for federal income tax purposes. However, the amount subtracted under this section shall be reduced by any interest on indebtedness incurred to carry the obligations or securities described in this section, and by any expenses incurred in the production of interest or dividend income described in this section. [1987 c.293 §23b; 1989 c.988 §1; 2007 c.783 §126]

316.057 [1977 c.872 §8; renumbered 316.806]

316.058 [1977 c.872 §9; renumbered 316.812]

316.059 [1977 c.872 §10; renumbered 316.818]

316.060 [1953 c.304 §9; 1955 c.596 §1; part derived from 1955 c.596 §4; 1957 c.586 §1; 1957 s.s. c.15 §2; 1959 c.593 §2 (referred and rejected); 1963 c.627 §4 (referred and rejected); repealed by 1969 c.493 §99; amended by 1969 c.520 §42]

316.061 [1979 c.887 §2; renumbered 316.824]

316.062 [1969 c.493 §14; renumbered 316.048]

316.063 [1979 c.887 §§3,4; renumbered 316.832]

316.064 [1979 c.707 §2; renumbered 316.838]

316.065 [1953 c.304 §10; repealed by 1959 c.593 §14 (referred and rejected); repealed by 1963 c.627 §23 (referred and rejected); repealed by 1969 c.493 §99]

316.066 [1973 c.753 §2; repealed by 1979 c.414 §7]

316.067 [1969 c.493 §15; 1971 c.686 §12; 1971 c.736 §1; 1973 c.1 §1; 1973 c.88 §1; 1973 c.402 §18; 1973 c.753 §3; 1977 c.784 §1; 1979 c.414 §5; 1979 c.436 §1; 1979 c.579 §7; 1983 c.381 §1; renumbered 316.680]

316.068 [1975 c.672 §§2,2a,10b,13; subsection (7) enacted as 1975 c.650 §2; 1977 c.795 §10; 1977 c.872 §12; 1978 c.9 §1; 1979 c.240 §1; 1979 c.436 §6; 1981 c.679 §1; 1981 c.896 §1; 1983 c.684 §6; renumbered 316.695]

316.069 [1981 c.778 §34; renumbered 316.744]

316.070 [1953 c.304 §13; repealed by 1969 c.493 §99]

316.071 [1981 c.801 §2; renumbered 316.690]

316.072 [1969 c.467 §6; 1979 c.376 §1; 1981 c.705 §1; renumbered 316.685]

316.073 [1975 c.672 §12; repealed by 1991 c.457 §24]

316.074 Exemption for service in Vietnam on missing status. (1) Any compensation or gratuity received from any source by any individual by reason of civilian or military service on and after February 28, 1961, during the Vietnam conflict, for any month during any part of which such individual is in a missing status as a result of that conflict, is exempt from tax under this chapter. Any such compensation or gratuity is exempt from tax without regard to:

(a) The identity of the recipient of the compensation or gratuity;

(b) The death of the individual whose service in a missing status results in payment of the compensation or the gratuity; or

(c) A date of death established for the individual whose service in a missing status results in payment of the compensation or the gratuity.

(2) As used in this section:

(a) “Compensation” does not include any pension or retirement allowance.

(b) “Missing status” means the status of an individual who is carried or determined to be in a status of missing; missing in action; interned in a foreign country; captured, beleaguered or besieged by a hostile force; or detained in a foreign country against the will of the individual. “Missing status” does not include the status of an individual for a period during which the individual is officially determined to be absent from a post of duty without authority.

(3) In addition to the income tax relief provided by this section, any provision in the laws of the United States or in the Internal Revenue Code providing income tax relief for returning prisoners of war, persons in a missing status, their spouses, heirs, devisees or executors shall apply to the measurement of the taxable income of individuals, estates and trusts. [1973 c.475 §§2,3; 1975 c.672 §4; 1997 c.839 §5]

316.075 [1953 c.304 §11; 1953 c.522 §4; 1959 c.593 §3 (referred and rejected); 1963 c.627 §5 (referred and rejected); repealed by 1969 c.493 §99]

316.076 Deduction for physician in medically disadvantaged area. (1) Any person who becomes licensed under ORS chapter 677 on or after January 1, 1974, and prior to January 1, 1982, and enters the practice of medicine in any medically disadvantaged area of this state may deduct as an expense from income earned from the practice of medicine an amount equal to the annual expense incurred for each year in attending medical school, including tuition, fees, living expenses and other actual and necessary expenses, but not to exceed $10,000 for any year.

(2) In order to qualify for the exemption granted by subsection (1) of this section, the person must apply to the Department of Revenue on or before April 15, following the first tax year for which the deduction is claimed on a form prescribed by the department and accompanied by evidence from the Oregon Medical Board that the area in which the person is practicing was medically disadvantaged when the physician entered practice there.

(3) The deduction authorized by subsection (1) of this section shall be applicable for four tax years. [1973 c.644 §6; 1979 c.699 §1]

316.077 [1969 c.493 §16; renumbered 316.697]

CREDITS

316.078 Tax credit for dependent care expenses necessary for employment. (1) A resident individual shall be allowed a credit against the tax otherwise due under this chapter in an amount equal to a percentage of employment-related expenses allowable pursuant to section 21 of the Internal Revenue Code, notwithstanding the limitation imposed by section 26 of the Internal Revenue Code. The percentage shall be determined on the basis of federal taxable income, as defined in section 63 of the Internal Revenue Code and as reflected on the federal return, whether or not a joint return, of the taxpayer for the taxable year, in accordance with the following table:

______________________________________________________________________________

If federal taxable

income is: The percentage is:

Not over $5,000 30%

Over $5,000 but not

over $10,000 15%

Over $10,000 but not

over $15,000 8%

Over $15,000 but not

over $25,000 6%

Over $25,000 but not

over $35,000 5%

Over $35,000 but not

over $45,000 4%

Over $45,000 0%

______________________________________________________________________________

(2) A nonresident individual shall be allowed the credit computed in the same manner and subject to the same limitations as the credit allowed a resident by subsection (1) of this section. However, the credit shall be prorated using the proportion provided in ORS 316.117.

(3) If a change in the taxable year of a taxpayer occurs as described in ORS 314.085, or if the Department of Revenue 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.

(4) 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.

(5) Any tax credit otherwise allowable under this section which is not used by the taxpayer in a particular year may be carried forward and offset against the taxpayer’s tax liability for the next succeeding tax year. Any credit remaining unused in such 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, and any credit not used in that fourth succeeding tax year may be carried forward and used in the fifth succeeding tax year, but may not be carried forward for any tax year thereafter. [1975 c.672 §15a; 1977 c.872 §3; 1979 c.691 §4; 1983 c.684 §9; 1985 c.802 §4; 1987 c.293 §10; 1989 c.625 §7; 1989 c.1047 §11; 1991 c.457 §2; 1993 c.726 §28; 1997 c.839 §6; 1999 c.90 §8; 2001 c.660 §36]

Note: Section 44, chapter 913, Oregon Laws 2009, provides:

Sec. 44. Except as provided in ORS 316.078 (5), a credit may not be claimed under ORS 316.078 for tax years beginning on or after January 1, 2016. [2009 c.913 §44]

316.079 Credit for certain disabilities. A $50 credit, against income taxes owed, shall be allowed a taxpayer who as of the close of the taxable year has suffered a permanent and complete loss of function of both legs or both arms or one leg and one arm as certified to by a public health officer. The certificate shall be in a form prescribed by the Department of Revenue and shall be filed with the first return in which the credit is claimed. [1973 c.120 §2]

Note: Section 41, chapter 913, Oregon Laws 2009, provides:

Sec. 41. A credit may not be claimed under ORS 316.079 for tax years beginning on or after January 1, 2016. [2009 c.913 §41]

316.080 [1953 c.304 §12; renumbered 316.475]

316.081 [1973 c.503 §15; 1975 c.705 §11; 1981 c.502 §1; renumbered 316.844]

316.082 Credit for taxes paid another state; rules. (1) A resident individual shall be allowed a credit against the tax otherwise due under this chapter for the amount of any income tax imposed on the individual, or on an Oregon S corporation or Oregon partnership of which the individual is a member (to the extent of the individual’s pro rata share of the S corporation or distributive share of the partnership), for the tax year by another state on income derived from sources therein and that is also subject to tax under this chapter.

(2) The credit provided under this section shall not exceed the proportion of the tax otherwise due under this chapter that the amount of the modified adjusted gross income of the taxpayer derived from sources in the other state bears to the entire modified adjusted gross income of the taxpayer.

(3) The Department of Revenue shall provide by rule the procedure for obtaining credit provided by this section and the proof required. The requirement of proof may be waived partially, conditionally or absolutely, as provided under ORS 315.063.

(4) No credit allowed under this section or ORS 316.292 shall be applied in calculating tax due under this chapter if the tax upon which the credit is based has been claimed as a deduction, unless the tax upon which the credit is based is restored to income on the Oregon return.

(5) Credit shall not be allowed under this section for income taxes paid to a state that allows a nonresident a credit against the income taxes imposed by that state for taxes paid or payable to the state of residence. It is the purpose of this subsection to avoid duplicative taxation through use of a nonresident, rather than a resident, credit for taxes paid or payable to another state.

(6) The Department of Revenue may adopt rules under this section that provide a credit against the tax imposed by this chapter when the department considers the credit necessary to avoid taxation of the same income by this state and another state.

(7) As used in this section:

(a) “Modified adjusted gross income” means federal adjusted gross income as modified by this chapter and the other laws of this state applicable to personal income taxation.

(b) “Oregon partnership” means an entity that is treated as a partnership for Oregon excise and income tax purposes.

(c) “Oregon S corporation” means a corporation that has elected S corporation status for Oregon excise and income tax purposes.

(d) “State” means a state, district, territory or possession of the United States.

(8) For purposes of this section:

(a) A direct tax imposed upon income of an Oregon S corporation is an income tax imposed on the Oregon S corporation.

(b) An excise tax that is measured by income of an Oregon S corporation is an income tax imposed on the Oregon S corporation.

(c) An excise tax is measured by income only if the statute imposing the excise tax provides that the base for the excise tax:

(A) Includes revenue from sales and from services rendered, and income from investments; and

(B) Permits a deduction for the cost of goods sold and the cost of services rendered. [1969 c.493 §17; 1981 c.801 §3; 1987 c.647 §11; 1991 c.838 §6; 1993 c.726 §28a; 1995 c.54 §7; 1999 c.74 §5; 2001 c.9 §1]

316.083 [1977 c.666 §35; 1995 c.556 §2; renumbered 316.845 in 2005]

316.084 [1981 c.720 §16; 1983 c.684 §10; 1991 c.877 §1; repealed by 1993 c.730 §9 (315.134 enacted in lieu of 316.084, 317.133 and 318.080)]

316.085 Personal exemption credit. (1)(a) There shall be allowed a personal exemption credit against taxes otherwise due under this chapter. The credit shall equal $90 multiplied by the number of personal exemptions allowed under section 151 of the Internal Revenue Code.

(b) In the case of an individual with respect to whom a credit under paragraph (a) of this subsection is allowable to another taxpayer for a taxable year beginning in the calendar year in which the individual’s taxable year begins, the credit amount applicable to such individual for such individual’s taxable year is zero.

(2)(a) A nonresident shall be allowed the credit provided under subsection (1) of this section computed in the same manner and subject to the same limitations as the credit allowed to a resident of this state. However, the credit shall be prorated using the proportion provided in ORS 316.117.

(b) If a change in the taxable year of a taxpayer occurs as described in ORS 314.085, or if the Department of Revenue 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.

(c) 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.

(3) The Department of Revenue shall recompute the dollar amount of the personal exemption credit allowed for state personal income tax purposes. The computation shall be as follows:

(a) Divide the monthly averaged U.S. City Average Consumer Price Index for the 12 consecutive months ending August 31 of the prior calendar year by the monthly averaged index for the first six months of 1986.

(b) Recompute the dollar amount of the personal exemption credit by multiplying $90 by the appropriate indexing factor determined as provided in paragraph (a) of this subsection. Round off the amount obtained under this paragraph to the nearest $1.

(4) As used in this section, “U.S. City Average Consumer Price Index” means the U.S. City Average Consumer Price Index for All Urban Consumers (All Items) as published by the Bureau of Labor Statistics of the United States Department of Labor.

(5) Notwithstanding subsections (1) to (3) of this section, if a taxpayer’s federal adjusted gross income for the tax year exceeds the threshold amount, the exemption amount shall be the greater of:

(a) Thirty-three percent of the amount computed in subsection (3) of this section; or

(b) The amount computed in subsection (3) of this section reduced by:

(A) Two percentage points for each $2,500 (or fraction thereof) by which the taxpayer’s federal adjusted gross income exceeds the threshold amount; or

(B) Two percentage points for each $1,250 (or fraction thereof) by which the taxpayer’s federal adjusted gross income exceeds the threshold amount, if the taxpayer is married but filing separately.

(6) As used in this section, “threshold amount” means:

(a) $234,600 in the case of a joint return or a surviving spouse.

(b) $195,500 in the case of a head of a household.

(d) $117,300 in the case of a married individual filing a separate return.

(7) The Department of Revenue shall adjust the threshold amounts in subsection (6) of this section according to the cost-of-living adjustment for the calendar year. The department shall annually recompute the threshold amounts for the current tax year by multiplying each dollar amount by the percentage (if any) by which the monthly averaged U.S. City Average Consumer Price Index for the 12 consecutive months ending August 31 of the prior calendar year exceeds the monthly averaged U.S. City Average Consumer Price Index for the 12 consecutive months ending August 31, 2006.

(8) If a threshold amount computed under subsections (6) and (7) of this section is not a multiple of $50, the amount shall be rounded to the next lower multiple of $50. [1985 c.345 §§2,3; 1987 c.293 §13; 1991 c.457 §2a; 1997 c.839 §8; 1999 c.90 §9; 2001 c.660 §12; 2007 c.843 §63]

316.086 [1979 c.733 §2; 1983 c.684 §11; 1989 c.880 §12; repealed by 1995 c.746 §22]

316.087 Credit for the elderly or permanently and totally disabled. (1) A resident individual shall be allowed a credit against the tax otherwise due under this chapter in an amount equal to 40 percent of the credit for the elderly or the permanently and totally disabled allowable pursuant to section 22 of the Internal Revenue Code, notwithstanding the limitation imposed by section 26 of the Internal Revenue Code.

(5) No credit shall be allowed under this section for the taxable year if the taxpayer claims the credit allowed under ORS 316.157. [1969 c.493 §18; 1971 c.736 §2; 1977 c.872 §4; 1979 c.691 §5; 1983 c.684 §12; 1985 c.802 §5; 1987 c.293 §14; 1987 c.545 §1; 1989 c.625 §8; 1991 c.457 §3; 1991 c.823 §2; 1993 c.726 §29; 1997 c.839 §9; 1999 c.90 §10; 2001 c.660 §37]

Note: Section 40, chapter 913, Oregon Laws 2009, provides:

Sec. 40. A credit may not be claimed under ORS 316.087 for tax years beginning on or after January 1, 2016. [2009 c.913 §40]

316.088 [1977 c.811 §2; 1979 c.534 §1; 1981 c.894 §1; 1983 c.684 §13; 1989 c.648 §64; repealed by 1991 c.877 §41]

316.089 [1977 c.852 §2; 1979 c.622 §2; 1985 c.521 §3; repealed by 1993 c.730 §15 (315.154 enacted in lieu of 316.089)]

316.091 [1977 c.852 §3; 1979 c.622 §3; 1985 c.630 §1; repealed by 1993 c.730 §17 (315.156 enacted in lieu of 316.091, 317.148 and 318.104)]

316.092 [1969 c.493 §19; repealed by 1973 c.402 §30]

316.093 [1977 c.839 §8; 1979 c.412 §5a; repealed by 1987 c.769 §20]

316.094 [1979 c.578 §7; 1985 c.749 §1; 1987 c.605 §1; 1989 c.887 §1; 1991 c.714 §6; 1991 c.877 §2; repealed by 1993 c.730 §7 (315.104 enacted in lieu of 316.094, 317.102 and 318.110)]

316.095 Credit for sewage treatment works connection costs. (1) A resident individual shall be allowed a credit of $800 against the taxes otherwise due under this chapter, for installing or connecting to a sewage treatment works if:

(a) Required by an order issued, before July 1, 1989, under ORS 454.275 to 454.380 or ORS chapters 468, 468A and 468B;

(b) Required by a rule adopted, before July 1, 1989, by the Environmental Quality Commission;

(c) Required by, installed or connected pursuant to the terms of an intergovernmental agreement, entered into before July 1, 1989, between a local governing body and the Environmental Quality Commission; or

(d) Required by an order under ORS 222.840 to 222.915 or 431.705 to 431.760 issued after January 1, 1988, and before July 1, 1995.

(2) To qualify for the credit under this section:

(a) Subject to subsection (4) of this section, the credit must be claimed for the year in which the connection is made or the costs are incurred. The credit applies to installations or connections made on or after January 1, 1985.

(b) The taxpayer who is allowed the credit must be the person who actually expended funds for construction or installation of the project.

(c) The treatment works must be required by an order or rule of the Environmental Quality Commission, required by, installed or connected consistent with an intergovernmental agreement between a local governing body and the Environmental Quality Commission or required by an order or finding under ORS 222.840 to 222.915 or 431.705 to 431.760.

(d) The residence connected to the treatment works must be the principal residence of, and owned by, the taxpayer claiming the credit.

(3) The credit allowed in any one year shall not exceed one-fifth of the total amount of the credit granted under this section per qualifying residence or the tax liability of the taxpayer.

(4) Any tax credit otherwise allowable under this section that is not used by the taxpayer in a particular year may be carried forward and offset against the taxpayer’s tax liability for the next succeeding tax year. Any credit remaining unused in that 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, and any credit not used in that fourth succeeding tax year may be carried forward and used in the fifth succeeding tax year, and any credit not used in that fifth succeeding tax year may be carried forward and used in the sixth succeeding tax year, and any credit not used in that sixth succeeding tax year may be carried forward and used in the seventh succeeding tax year, and any credit not used in that seventh succeeding tax year may be carried forward and used in the eighth succeeding tax year, but may not be carried forward for any tax year thereafter.

(5) A husband and wife who file separate returns for a taxable year may each claim a share of the tax credit that would have been allowed on a joint return in proportion to the contribution of each.

(6) The tax claim for tax credit shall be substantiated by submission, with the tax return, of receipt of payment by the taxpayer. For purposes of this subsection, “receipt of payment” means a canceled check or an actual receipt for payment issued by the installing or constructing entity and issued on the date the payment is or was actually acknowledged. The requirement for substantiation may be waived partially, conditionally or absolutely, as provided under ORS 315.063.

(7) This section applies for costs actually incurred for installing or connecting to a sewage treatment works pursuant to an order, rule or intergovernmental agreement of the Environmental Quality Commission under ORS 454.275 to 454.380 or ORS chapters 468, 468A and 468B. [1987 c.890 §§2,3; 1989 c.953 §1; 1991 c.781 §1; 1995 c.54 §8; 2003 c.46 §38]

316.096 [1987 c.591 §13; 1989 c.381 §§8,11,14; 1991 c.877 §§3,4,5; 1991 c.916 §§14,16,17; 1993 c.18 §§77,78,79; repealed by 1997 c.170 §33]

316.097 [See 316.480; 1973 c.831 §8; 1977 c.795 §11; 1977 c.866 §10; 1979 c.691 §6; 1981 c.408 §1; 1983 c.637 §6; 1987 c.596 §2; 1989 c.802 §2; 1991 c.877 §6; repealed by 1993 c.730 §29 (315.304 enacted in lieu of 316.097 and 317.116)]

316.098 [1985 c.438 §2; 1991 c.877 §9; repealed by 1993 c.730 §13 (315.148 enacted in lieu of 316.098, 317.150 and 318.102)]

316.099 Credit for early intervention services for child with disability; rules of State Board of Education. (1) As used in this section, unless the context requires otherwise:

(a) “Child with a disability” means a qualifying child under section 152 of the Internal Revenue Code who has been determined eligible for early intervention services or is diagnosed for the purposes of special education as being mentally retarded, multidisabled, visually impaired, hard of hearing, deaf-blind, orthopedically impaired or other health impaired or as having autism, emotional disturbance or traumatic brain injury, in accordance with State Board of Education rules.

(b) “Early intervention services” means programs of treatment and habilitation designed to address a child’s developmental deficits in sensory, motor, communication, self-help and socialization areas.

(c) “Special education” means specially designed instruction to meet the unique needs of a child with a disability, including regular classroom instruction, instruction in physical education, home instruction and instruction in hospitals, institutions and special schools.

(2) The State Board of Education shall adopt rules further defining “child with a disability” for purposes of this section. A diagnosis obtained for the purposes of entitlement to special education or early intervention services shall serve as the basis for a claim for the additional credit allowed under subsection (3) of this section.

(3) In addition to the personal exemption credit allowed by this chapter for state personal income tax purposes for a dependent of the taxpayer, there shall be allowed an additional personal exemption credit for a child with a disability if the child is a child with a disability at the close of the tax year. The amount of the credit shall be equal to the amount allowed as the personal exemption credit for the dependent for state personal income tax purposes for the tax year.

(4) Each taxpayer qualifying for the additional personal exemption credit allowed by this section may claim the credit on the personal income tax return. However, the claim shall be substantiated by any proof of entitlement to the credit as may be required by the state board by rule. [1985 c.531 §2; 1987 c.293 §15; 1989 c.224 §50a; 1989 c.491 §1; 1993 c.777 §7; 1993 c.813 §6; 1999 c.989 §29; 2001 c.114 §35; 2005 c.832 §28; 2007 c.70 §84]

Note: Section 39, chapter 913, Oregon Laws 2009, provides:

Sec. 39. A credit may not be claimed under ORS 316.099 for tax years beginning on or after January 1, 2016. [2009 c.913 §39]

316.102 Credit for political contributions. (1) A credit against taxes shall be allowed for voluntary contributions in money made in the taxable year:

(a) To a major political party qualified under ORS 248.006 or to a committee thereof or to a minor political party qualified under ORS 248.008 or to a committee thereof.

(b) To or for the use of a person who must be a candidate for nomination or election to a federal, state or local elective office in any primary election, general election or special election in this state. The person must, in the calendar year in which the contribution is made, either be listed on a primary election, general election or special election ballot in this state or have filed in this state one of the following:

(A) A prospective petition;

(B) A declaration of candidacy;

(D) A designation of a principal campaign committee.

(c) To a political committee, as defined in ORS 260.005, if the political committee has certified the name of its treasurer to the filing officer, as defined in ORS 260.005, in the manner provided in ORS chapter 260.

(2) The credit allowed by subsection (1) of this section shall be the lesser of:

(a) The total contribution, not to exceed $50 on a separate return; the total contribution, not to exceed $100 on a joint return; or

(b) The tax liability of the taxpayer.

(3) The claim for tax credit shall be substantiated by submission, with the tax return, of official receipts of the candidate, agent, political party or committee thereof or political committee to whom contribution was made. [1969 c.432 §2; 1973 c.119 §3; 1975 c.177 §1; 1977 c.268 §1; 1979 c.190 §413; 1985 c.802 §6; 1987 c.293 §16; 1989 c.986 §1; 1993 c.797 §27; 1995 c.1 §19; 1995 c.712 §104; 1999 c.999 §27]

Note: Section 34, chapter 913, Oregon Laws 2009, provides:

Sec. 34. A credit may not be claimed under ORS 316.102 for tax years beginning on or after January 1, 2014. [2009 c.913 §34]

316.103 [1985 c.684 §12; 1989 c.765 §1; 1989 c.958 §10; 1991 c.877 §7; repealed by 1993 c.730 §31 (315.324 enacted in lieu of 316.103 and 317.106)]

316.104 [1987 c.911 §8b; 1991 c.877 §8; repealed by 1993 c.730 §37 (315.504 enacted in lieu of 316.104 and 317.140)]

316.105 [1953 c.304 §14; 1953 c.552 §5; repealed by 1969 c.493 §99]

316.106 [1967 c.274 §7; repealed by 1969 c.493 §99]

316.107 [1969 c.493 §20; 1973 c.402 §19; 1985 c.802 §7; repealed by 1993 c.730 §3 (315.054 enacted in lieu of 316.107)]

316.108 [1967 c.118 §2; repealed by 1969 c.493 §99]

316.109 Credit for tax by another jurisdiction on sale of residential property; rules. (1) If gain on the sale of residential property is taxed under this chapter, the adjusted basis of the property for purposes of this chapter shall be the same as its adjusted basis for federal income tax purposes.

(2) A credit against the tax otherwise due under this chapter shall be allowed to the taxpayer for the amount of any taxes imposed on the taxpayer by another state of the United States, a foreign country or the District of Columbia which tax is attributable to gain that is subject to tax as described in subsection (1) of this section.

(3) The amount of the credit allowed under subsection (2) of this section may not exceed the amount of the gain taxed by the other taxing jurisdiction multiplied by eight percent.

(4) The Department of Revenue shall provide by rule the procedure for obtaining credit provided by subsection (2) of this section and the proof required. The requirement of proof may be waived partially, conditionally or absolutely, as provided under ORS 315.063.

(5) Any credit allowed under subsection (2) of this section may not be applied in calculating tax due under this chapter if the tax upon which the credit is based has been claimed as a deduction for Oregon personal income tax purposes, unless the tax is restored to income on the Oregon return. [1979 c.579 §2; 1981 c.705 §2; 1995 c.54 §10; 2001 c.114 §36]

316.110 [1953 c.304 §15; 1953 c.552 §6; 1957 c.582 §1; 1961 c.506 §1; 1963 c.253 §1; repealed by 1969 c.493 §99]

316.111 [1965 c.360 §2; repealed by 1969 c.493 §99]

316.112 [1959 c.211 §2; 1963 c.627 §5 (referred and rejected); repealed by 1969 c.493 §99]

316.113 [1967 c.61 §2; repealed by 1969 c.493 §99]

316.114 [1967 c.449 §2; repealed by 1969 c.493 §99]

316.115 [1953 c.304 §16; 1959 c.555 §1; subsection (4) derived from 1959 c.555 §2; repealed by 1969 c.493 §99]

316.116 Credit for alternative energy device or alternative fuel vehicle. (1)(a) A resident individual shall be allowed a credit against the taxes otherwise due under this chapter for costs paid or incurred for construction or installation of each of one or more alternative energy devices in a dwelling.

(b) A resident individual shall be allowed a credit against the taxes otherwise due under this chapter for costs paid or incurred to modify or purchase an alternative fuel vehicle or related equipment.

(2)(a) In the case of a category one alternative energy device that is not an alternative fuel device, the credit shall be based upon the first year energy yield of the alternative energy device that qualifies under ORS 469.160 to 469.180. The amount of the credit shall be the same whether for collective or noncollective investment.

(b) The credit allowed under this section for each category one alternative energy device for each dwelling may not exceed the lesser of:

(A) $1,500 or the first year energy yield in kilowatt hours per year multiplied by 60 cents per dwelling utilizing the alternative energy device used for space heating, cooling, electrical energy or domestic water heating for tax years beginning on or after January 1, 1990, and before January 1, 1996.

(B) $1,200 or the first year energy yield in kilowatt hours per year multiplied by 48 cents per dwelling utilizing the alternative energy device used for space heating, cooling, electrical energy or domestic water heating for tax years beginning on or after January 1, 1996, and before January 1, 1998.

(C) $1,500 or the first year energy yield in kilowatt hours per year multiplied by 60 cents per dwelling utilizing the alternative energy device used for space heating, cooling, electrical energy or domestic water heating for tax years beginning on or after January 1, 1998.

(c) For each category one alternative energy device used for swimming pool, spa or hot tub heating, the credit allowed under this section shall be based upon 50 percent of the cost of the device or the first year’s energy yield in kilowatt hours per year multiplied by 15 cents, whichever is lower, up to:

(A) $1,500 for tax years beginning on or after January 1, 1990, and before January 1, 1996.

(B) $1,200 for tax years beginning on or after January 1, 1996, and before January 1, 1998.

(d) For each alternative fuel device, the credit allowed under this section is 25 percent of the cost of the alternative fuel device but the total credit shall not exceed $750 if the device is placed in service on or after January 1, 1998.

(e)(A) For each category two alternative energy device that is a solar electric system or fuel cell system, the credit allowed under this section shall equal $3 per watt of installed output, but the installed output that is used to determine the amount of credit under this paragraph may not exceed 2,000 watts.

(B) For each category two alternative energy device that is a wind electric system, the credit allowed under this section may not exceed the lesser of $6,000 or the first year energy yield in kilowatt hours per year multiplied by $2.

(C) Notwithstanding subparagraph (A) or (B) of this paragraph, the total amount of the credits allowed in any one tax year may not exceed the tax liability of the taxpayer or $1,500 for each alternative energy device, whichever is less. Unused credit amounts may be carried forward as provided in subsection (7) of this section, but may not be carried forward to a tax year that is more than five tax years following the first tax year for which any credit was allowed with respect to the category two alternative energy device that is the basis for the credit.

(D) Notwithstanding subparagraph (A) or (B) of this paragraph, the total amount of the credit for each device allowed under this paragraph may not exceed 50 percent of the total installed cost of the category two alternative energy device.

(3)(a) In the case of a credit for a category one alternative energy device that is an energy efficient appliance, the credit allowed for each appliance to a resident individual under this section shall equal:

(A) 48 cents per first year kilowatt hour saved, or the equivalent for other fuel saved, not to exceed $1,200 for each tax year beginning on or after January 1, 1998, and before January 1, 1999; and

(B) 40 cents per kilowatt hour saved, or the equivalent for other fuel saved, not to exceed $1,000 for each tax year beginning on or after January 1, 1999.

(b) Notwithstanding paragraph (a) of this subsection, the credit allowed for an energy efficient appliance may not exceed 25 percent of the cost of the appliance.

(4) To qualify for a credit under this section, all of the following are required:

(a) The alternative energy device must be purchased, constructed, installed and operated in accordance with ORS 469.160 to 469.180 and a certificate issued thereunder.

(b) Except for credits claimed for alternative fuel devices, the taxpayer who is allowed the credit must be the owner or contract purchaser of the dwelling or dwellings served by the alternative energy device or the tenant of the owner or of the contract purchaser and must:

(A) Use the dwelling or dwellings served by the alternative energy device as a principal or secondary residence; or

(B) Rent or lease, under a residential rental agreement, the dwelling or dwellings to a tenant who uses the dwelling or dwellings as a principal or secondary residence, unless the basis for the credit is the installation of an energy efficient appliance. If the basis for the credit is the installation of an energy efficient appliance, the credit shall be allowed only to the taxpayer who actually occupies the dwelling as a principal or secondary residence.

(c) In the case of an alternative fuel device, if the device is a fueling station necessary to operate an alternative fuel vehicle, unless the verification form and certificate are transferred as authorized under ORS 469.170 (8), the taxpayer who is allowed the credit must be the contractor who constructs the dwelling that incorporates the fueling station into the dwelling or installs the fueling station in the dwelling. If the category one alternative energy device is an alternative fuel vehicle, the credit must be claimed by the owner as defined under ORS 801.375 or contract purchaser. If the category one alternative energy device is related equipment for an alternative fuel vehicle, the credit may be claimed by the owner or contract purchaser.

(d) The credit must be claimed for the tax year in which the alternative energy device was purchased if the device is operational by April 1 of the next following tax year.

(e) If the alternative fuel vehicle is a gasoline-electric hybrid vehicle not designed for electric plug-in charging, it must be purchased before January 1, 2010.

(5) The credit provided by this section does not affect the computation of basis under this chapter.

(6) The total credits allowed under this section in any one year may not exceed the tax liability of the taxpayer.

(7) Any tax credit otherwise allowable under this section that is not used by the taxpayer in a particular year 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, and any credit not used in that fourth succeeding tax year may be carried forward and used in the fifth succeeding tax year, but may not be carried forward for any tax year thereafter.

(8) A nonresident shall be allowed the credit under this section in the proportion provided in ORS 316.117.

(9) If a change in the taxable year of a taxpayer occurs as described in ORS 314.085, or if the Department of Revenue 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.

(10) 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.

(11) A husband and wife who file separate returns for a taxable year may each claim a share of the tax credit that would have been allowed on a joint return in proportion to the contribution of each. However, a husband or wife living in a separate principal residence may claim the tax credit in the same amount as permitted a single person.

(12) As used in this section, unless the context requires otherwise:

(a) “Collective investment” means an investment by two or more taxpayers for the acquisition, construction and installation of an alternative energy device for one or more dwellings.

(b) “Noncollective investment” means an investment by an individual taxpayer for the acquisition, construction and installation of an alternative energy device for one or more dwellings.

(13) Notwithstanding any provision of subsection (1) or (2) of this section, the sum of the credit allowed under subsection (1) of this section plus any similar credit allowed for federal income tax purposes may not exceed the cost to the taxpayer for the acquisition, construction and installation of the alternative energy device. [1977 c.196 §8; 1979 c.670 §2; 1981 c.894 §3; 1983 c.684 §14; 1983 c.768 §1; 1987 c.492 §1; 1989 c.626 §6; 1989 c.880 §§9,11; 1995 c.746 §19; 1997 c.325 §41; 1997 c.534 §3; 1999 c.21 §41; 1999 c.623 §1; 2005 c.832 §5; 2007 c.843 §29; 2009 c.909 §47]

Note: Section 5a, chapter 832, Oregon Laws 2005, provides:

Sec. 5a. A taxpayer may not be allowed a credit under ORS 316.116 if the first tax year for which the credit would otherwise be allowed with respect to an alternative energy device or alternative fuel vehicle or related equipment is on or after January 1, 2012. [2005 c.832 §5a; 2007 c.843 §35; 2009 c.913 §12]

(Temporary provisions relating to tax credit for manufactured dwelling park closures)

Note: Section 82, chapter 843, Oregon Laws 2007, and section 17, chapter 906, Oregon Laws 2007, are substantially the same and provide:

Sec. 82. (1) As used in this section:

(a) “Household” has the meaning given that term in ORS 310.630.

(b) “Manufactured dwelling” has the meaning given that term in ORS 446.003.

(c) “Manufactured dwelling park” means a place within this state where four or more manufactured dwellings are located, the primary purpose of which is to rent space or keep space for rent to any person for a charge or fee.

(d) “Rental agreement” means a contract under which an individual rents space in a manufactured dwelling park for siting a manufactured dwelling.

(2) A credit of $5,000 against the taxes otherwise due under this chapter is allowed to an individual who:

(a) Rents space in a manufactured dwelling park for a manufactured dwelling that is owned and occupied by the individual as the individual’s principal residence on the date that the landlord delivers notice that the park, or a portion of the park, is being closed and the rental agreement for the space is being terminated because of the exercise of eminent domain, by order of a federal, state or local agency or by the landlord; and

(b) Ends tenancy at the manufactured dwelling park site in response to the delivered notice described in paragraph (a) of this subsection.

(3) For purposes of subsection (2) of this section:

(a) Tenancy by the individual at the manufactured dwelling park site ends on the last day that a member of the individual’s household occupies the manufactured dwelling at the manufactured dwelling park site; and

(b) Tenancy by the individual at the manufactured dwelling park site does not end if the manufactured dwelling park is converted to a subdivision under ORS 92.830 to 92.845 and the individual buys a space or lot in the subdivision or sells the manufactured dwelling to a person who buys a space or lot in the subdivision.

(4) Notwithstanding subsection (2) of this section, if the manufactured dwelling park, or a portion of the park, is being closed and the rental agreement of the individual is being terminated because of the exercise of eminent domain, the credit amount allowed to the individual is the amount described in subsection (2) of this section, reduced by any amount that was paid to the individual as compensation for the exercise of eminent domain.

(5) An individual may not claim more than one credit under this section for tenancies ended during the tax year.

(6) If, for the year in which the individual ends the tenancy at the manufactured dwelling park, the amount of the credit allowed by this section, when added to the sum of the amounts allowable as payment of tax under ORS 316.187 and 316.583 plus other tax prepayment amounts and other refundable credit amounts, exceeds the taxes imposed by this chapter or ORS chapter 314 for the tax year, reduced by any nonrefundable credits allowable for purposes of this chapter for the tax year, the amount of the excess shall be refunded to the individual as provided in ORS 316.502.

(7) If more than one individual in a household qualifies under this section to claim the tax credit, the qualifying individuals may each claim a share of the available credit that is in proportion to their respective gross incomes for the tax year. [2007 c.843 §82]

Sec. 17. (1) As used in this section:

(a) “Household” has the meaning given that term in ORS 310.630.

(b) “Manufactured dwelling” has the meaning given that term in ORS 446.003.

(d) “Rental agreement” means a contract under which an individual rents space in a manufactured dwelling park for siting a manufactured dwelling.

(2) A credit of $5,000 against the taxes otherwise due under this chapter is allowed to an individual who:

(b) Ends tenancy at the manufactured dwelling park site in response to the delivered notice described in paragraph (a) of this subsection.

(3) For purposes of subsection (2) of this section:

(5) An individual may not claim more than one credit under this section for tenancies ended during the tax year.

Note: Section 83, chapter 843, Oregon Laws 2007, and section 18, chapter 906, Oregon Laws 2007, are substantially the same and provide:

Sec. 83. Section 82, chapter 843, Oregon Laws 2007, applies to individuals whose household ends tenancy at a manufactured dwelling park during a tax year that begins on or after January 1, 2007, and before January 1, 2014. [2007 c.843 §83; 2009 c.913 §32]

Sec. 18. Section 17, chapter 906, Oregon Laws 2007, applies to individuals whose household ends tenancy at a manufactured dwelling park during a tax year that begins on or after January 1, 2007, and before January 1, 2014. [2007 c.906 §18; 2009 c.913 §33]

TAXATION OF NONRESIDENTS

316.117 Proration between Oregon income and other income for nonresidents, part-year residents and trusts. (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 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. [1969 c.493 §21; 1971 c.672 §1; 1973 c.269 §1; 1975 c.672 §5; 1977 c.872 §5; 1981 c.801 §4; 1983 c.684 §15; 1985 c.141 §5; 1987 c.293 §17; 1999 c.580 §5]

316.118 Pro rata share of S corporation income of nonresident shareholder. (1) The pro rata share of S corporation income of a nonresident shareholder constitutes income or loss derived from or connected with sources in this state as provided in ORS 316.127 (5).

(2) In determining the pro rata share of S corporation income of a nonresident shareholder, there shall be included only that part derived from or connected with sources in this state of the shareholder’s distributive share of items of S corporation income, gain, loss and deduction (or item thereof) entering into the federal adjusted gross income of the shareholder, as such part is determined under rules adopted by the Department of Revenue in accordance with the general rules under ORS 316.127.

(3) Any modifications, additions or subtractions to federal taxable income described in this chapter that relates to an item of S corporation income, gain, loss or deduction (or item thereof) shall be made in accordance with the shareholder’s pro rata share, for federal income tax purposes of the item to which the modification, addition or subtraction relates, but limited to the portion of such item derived from or connected with sources in this state.

(4) A nonresident shareholder’s pro rata share of items of income, gain, loss or deduction (or item thereof) shall be determined under ORS 314.734 (1). The character of shareholder items for a nonresident shareholder shall be determined under ORS 314.734 (2). [1989 c.625 §52; 1991 c.877 §11]

316.119 Proration of part-year resident’s income between Oregon income and other income; alternative proration for pass-through entity items. (1) Except as provided in subsection (2) of this section, for purposes of ORS 316.117, the adjusted gross income of a part-year resident from Oregon sources is the sum of the following:

(a) For the portion of the year in which the taxpayer was a resident of Oregon, the taxpayer’s entire adjusted gross income.

(b) For the portion of the year in which the taxpayer was a nonresident, the taxpayer’s adjusted gross income derived from sources within this state, as determined under ORS 316.127.

(2) For purposes of ORS 316.117, the adjusted gross income of a part-year resident with federal adjusted gross income that includes an item of income, gain, loss, deduction or credit from a pass-through entity shall include the sum of the following:

(a) The total amount of the item that is taken into account in federal adjusted gross income, multiplied by the ratio of the number of days the taxpayer was a resident of Oregon during the tax year of the entity over the total number of days in the tax year of the entity; and

(b) The total amount of the item that is taken into account in federal adjusted gross income and that is derived from or connected with sources within this state, as determined under ORS 316.127, multiplied by the ratio of the number of days the taxpayer was a nonresident of Oregon during the tax year of the entity over the total number of days in the tax year of the entity.

(3) As used in subsection (2) of this section:

(a) “Pass-through entity” means any entity that is recognized as a separate entity for federal income tax purposes, for which the owners are required to report income, gains, losses, deductions or credits from the entity for federal income tax purposes.

(b) “Tax year of the entity” means the tax year of the pass-through entity that ends within the tax year of the taxpayer. [1993 c.726 §31; 2005 c.55 §1]

Note: Section 2, chapter 55, Oregon Laws 2005, provides:

Sec. 2. The amendments to ORS 316.119 by section 1 of this 2005 Act apply to:

(1) Tax years beginning on or after January 1, 2002; and

(2) Any tax year for which a return is subject to audit or adjustment by the Department of Revenue on or after the effective date of this 2005 Act [November 4, 2005], any tax year for which a return is the subject of an appeal on or after the effective date of this 2005 Act and any tax year for which a claim for refund may be made on or after the effective date of this 2005 Act. [2005 c.55 §2]

316.122 Separate or joint determination of income for husband and wife. (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. [1969 c.493 §22; 1985 c.802 §8; 1987 c.647 §3; 1999 c.580 §6]

316.124 Determination of adjusted gross income of nonresident partner. (1) In determining the adjusted gross income of a nonresident partner of any partnership, there shall be included only that part derived from or connected with sources in this state of the partner’s distributive share of items of partnership income, gain, loss and deduction (or item thereof) entering into the federal adjusted gross income of the partner, as such part is determined under rules adopted by the Department of Revenue in accordance with the general rules in ORS 316.127.

(2) In determining the sources of a nonresident partner’s income, no effect shall be given to a provision in the partnership agreement which:

(a) Characterizes payments to the partner as being for services or for the use of capital, or allocated to the partner, as income or gain from sources outside this state, a greater proportion of the partner’s distributive share of partnership income or gain than the ratio of partnership income or gain from sources outside this state to partnership income or gain from all sources, except as authorized in subsection (4) of this section; or

(b) Allocates to the partner a greater proportion of a partnership item of loss or deduction connected with sources in this state than the proportionate share of the partner, for federal income tax purposes, of partnership loss or deduction generally, except as authorized in subsection (4) of this section.

(3) Any modification to federal taxable income described in this chapter that relates to an item of partnership income, gain, loss or deduction (or item thereof) shall be made in accordance with the partner’s distributive share, for federal income tax purposes of the item to which the modification relates, but limited to the portion of such item derived from or connected with sources in this state.

(4) The department may, on application, authorize the use of such other methods of determining a nonresident partner’s portion of partnership items derived from or connected with sources in this state, and the modifications related thereto, as may be appropriate and equitable, on such terms and conditions as it may require.

(5) A nonresident partner’s distributive share of items of income, gain, loss or deduction (or item thereof) shall be determined under ORS 314.714 (2). The character of partnership items for a nonresident partner shall be determined under ORS 314.714 (1). [1989 c.625 §32 (enacted in lieu of 316.352)]

316.125 [1953 c.304 §17; repealed by 1969 c.493 §99]

316.127 Income of nonresident from Oregon sources. (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;

(b) A business, trade, profession or occupation carried on in this state; and

(c) A taxable lottery prize awarded by the Oregon State Lottery, including a taxable lottery prize awarded by a multistate lottery association of which the Oregon State Lottery is a member if the ticket upon which the prize is awarded was sold 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:

(a) The income of an S corporation for federal income tax purposes derived from or connected with sources in this state constitutes income derived from sources within this state for a nonresident individual who is a shareholder of the S corporation; and

(b) A net operating loss of an S corporation derived from or connected with sources in this state constitutes a loss or deduction connected with sources in this state for a nonresident individual who is a shareholder of the S corporation.

(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 to a nonresident for services performed by the nonresident 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

(9)(a) Retirement income received by a nonresident does not constitute income derived from sources within this state unless the individual is domiciled in this state.

(b) As used in this section, “retirement income” means retirement income as that term is defined in 4 U.S.C. 114, as amended and in effect for the tax period.

(10) Compensation for the performance of duties described in this subsection that is paid to a nonresident does not constitute income derived from sources within this state if the individual:

(a) Is engaged on a vessel to perform assigned duties in more than one state as a pilot licensed under 46 U.S.C. 7101 or licensed or authorized under the laws of a state; or

(b) Performs regularly assigned duties while engaged as a master, officer or member of a crew on a vessel operating on the navigable waters of more than one state. [1969 c.493 §23; 1971 c.672 §2; 1973 c.269 §2; 1975 c.705 §4; 1983 c.684 §15a; 1989 c.625 §9; 1997 c.654 §6; 1997 c.839 §10; 1999 c.143 §4; 1999 c.556 §1; 1999 c.580 §7; 2001 c.77 §§1,4; 2001 c.114 §37; 2003 c.77 §24]

316.130 Determination of taxable income of full-year nonresident. (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. [1985 c.141 §4; 1987 c.293 §18; 1987 c.647 §12; 1989 c.626 §7; 1997 c.839 §11a; 1999 c.580 §8]

316.131 Credit allowed to nonresident for taxes paid to state of residence; exception. (1) A nonresident shall be allowed a credit against the taxes otherwise due under this chapter for income taxes imposed by and paid to the state of residence (not including any preference, alternative or minimum tax) on income taxable under this chapter, subject to the following conditions:

(a) The credit shall be allowed only if the state of residence either:

(A) Does not tax the income of residents of this state derived from sources within that state; or

(B) Allows residents of this state a credit against income taxes imposed by that state on income for tax paid or payable under this chapter.

(b) The credit may not be allowed for taxes paid to a state that allows its residents a credit against the taxes imposed by that state for income tax paid or payable under this chapter irrespective of whether its residents are allowed a credit against the taxes imposed by this chapter for income taxes paid to that state.

(c) Credit shall be allowed only for the proportion of the taxes paid to the state of residence (not including preference, alternative or minimum taxes) as the adjusted gross income taxable under this chapter and also subject to taxes in the state of residence bears to the entire adjusted gross income upon which the taxes paid to the state of residence are imposed.

(d) The credit may not exceed the proportion of the tax payable under this chapter that the modified adjusted gross income subject to tax in the state of residence and also taxable under this chapter bears to the entire modified adjusted gross income of the taxpayer.

(2) For purposes of this section, the amount of income taxes paid to another state includes the taxpayer’s pro rata share of any taxes on, or according to, or measured by, income or profits paid or accrued that were paid by an S corporation.

(3) Notwithstanding subsection (1) of this section, credit may not be allowed under this section for taxes paid by a nonresident on qualifying compensation.

(4) As used in this section:

(a) “Modified adjusted gross income” means federal adjusted gross income as modified by this chapter and the other laws of this state applicable to personal income taxation.

(b) “Qualifying compensation” has the meaning given that term in section 1, chapter 559, Oregon Laws 2005.

(c) “State” means a state, district, territory or possession of the United States. [1991 c.838 §5; 2001 c.9 §2; 2005 c.559 §6]

316.132 [1987 c.682 §3; 1991 c.877 §12; 1991 c.929 §1; repealed by 1993 c.730 §23 (315.208 enacted in lieu of 316.132, 317.114 and 318.160)]

316.133 [1991 c.928 §2; repealed by 1993 c.730 §25 (315.234 enacted in lieu of 316.133 and 317.134)]

316.134 [1987 c.682 §2; 1989 c.625 §10; 1991 c.457 §6; 1991 c.877 §13; repealed by 1993 c.730 §21 (315.204 enacted in lieu of 316.134, 317.135 and 318.175)]

316.135 [1979 c.554 §2; renumbered 316.752]

316.136 [1979 c.554 §3; renumbered 316.758]

316.137 [1979 c.554 §4; renumbered 316.765]

316.138 [1979 c.554 §5; renumbered 316.771]

316.139 [1989 c.924 §2; 1991 c.858 §10; 1991 c.877 §14; repealed by 1993 c.730 §11 (315.138 enacted in lieu of 316.139 and 317.145)]

316.140 [1979 c.512 §12; 1981 c.894 §10; 1991 c.877 §15; repealed by 1993 c.730 §33 (315.354 enacted in lieu of 316.140 and 317.104)]

316.141 [1979 c.512 §15; 1981 c.894 §11; 1989 c.765 §2; 1991 c.457 §7; repealed by 1993 c.730 §35 (315.356 enacted in lieu of 316.141, 316.142 and 317.103)]

316.142 [1979 c.512 §16, 17; 1981 c.894 §12; 1989 c.765 §3; repealed by 1993 c.730 §35 (315.356 enacted in lieu of 316.141, 316.142 and 317.103)]

ADDITIONAL CREDITS

316.143 [1989 c.893 §2; 1991 c.877 §16; 1995 c.746 §36; 1999 c.459 §1; 2001 c.509 §12; renumbered 315.613 in 2005]

316.144 [1989 c.893 §3; 1991 c.877 §17; 1995 c.746 §38; 1997 c.787 §3; 1999 c.459 §6; 1999 c.582 §10; 2003 c.46 §39; renumbered 315.616 in 2005]

316.145 [1979 c.561 §4; renumbered 316.849]

316.146 [1989 c.893 §6a; 1991 c.877 §18; 1999 c.291 §31; 2003 c.46 §40; renumbered 315.619 in 2005]

(Costs in Lieu of Nursing Home Care)

316.147 Definitions for ORS 316.147 to 316.149. As used in ORS 316.147 to 316.149, unless the context requires otherwise:

(1) “Eligible taxpayer” includes any individual who must pay taxes otherwise imposed by this chapter and:

(a) Who pays or incurs expenses for the care of a “qualified individual,” as defined in subsection (2) of this section, through a payment method determined by rule of the Department of Revenue; and

(b) Who has a “household income,” as defined by ORS 310.630, for the taxable year, not to exceed the maximum amount of household income allowed in ORS 310.640 (1989 Edition) for a homeowner or renter refund.

(2) “Qualified individual” includes an individual at least 60 years of age on the date that the expenses described in subsection (1)(a) of this section are paid or incurred by the eligible taxpayer:

(a) Whose household income, as defined by ORS 310.630, does not exceed $7,500 for the calendar year in which the taxable year of the taxpayer begins;

(b) Who is eligible for home care services under Oregon Project Independence provided by the Department of Human Services;

(d) Whose care or any portion thereof is not paid for under ORS chapter 414. [1979 c.494 §2; 1991 c.786 §5; 1997 c.170 §28]

316.148 Credit for expenses in lieu of nursing home care; limitation. (1) A credit against the taxes otherwise due under this chapter shall be allowed to an eligible taxpayer with respect to food, clothing, medical care and transportation expenses paid or incurred by the taxpayer during the taxable year on behalf of a qualified individual in order that the qualified individual is not placed or maintained in a nursing home unnecessarily. The amount of the credit shall be $250 or eight percent of the expenses paid or incurred during the taxable year, whichever is less.

(2) No credit shall be allowed under this section for expenses paid or incurred for any period of time in which the qualified individual is a resident in a nursing home or is receiving aid from Oregon Project Independence. [1979 c.494 §3]

Note: Section 37, chapter 913, Oregon Laws 2009, provides:

Sec. 37. A credit may not be claimed under ORS 316.148 for tax years beginning on or after January 1, 2016. [2009 c.913 §37]

316.149 Evidence of eligibility for credit. Evidence of payments made or expenses incurred that form the basis of the credit allowed under ORS 316.147 to 316.149 shall be submitted to the Department of Revenue in accordance with any rules adopted by the department relative to the submission of evidence of such payments. [1979 c.494 §4]

316.150 [1979 c.414 §2; renumbered 316.854]

316.151 [1991 c.859 §4; repealed by 1993 c.730 §27 (315.254 enacted in lieu of 316.151, 317.141 and 318.085)]

316.152 [1991 c.916 §13; repealed by 1997 c.170 §33]

316.153 [1991 c.846 §2; 1995 c.556 §3; 1995 c.559 §54; 1997 c.839 §12; 1999 c.90 §11; 1999 c.676 §27; 2001 c.596 §50; 2001 c.660 §38; 2005 c.826 §1; repealed by 2007 c.843 §89 and 2007 c.906 §30]

316.154 [1989 c.963 §2; 1991 c.766 §3; 1991 c.877 §10; repealed by 1993 c.730 §19 (315.164 enacted in lieu of 316.154 and 317.146)]

316.155 [1991 c.652 §8; repealed by 1993 c.730 §39 (315.604 enacted in lieu of 316.155 and 317.149)]

(Retirement Income)

316.157 Credit for retirement income. (1) In the case of an eligible individual, there shall be allowed as a credit against the taxes otherwise due under this chapter for the taxable year an amount equal to the lesser of the tax liability of the taxpayer or nine percent of net pension income.

(2) For purposes of this section:

(a) “Eligible individual” means any individual who is receiving pension income and who has attained the following age before the close of the taxable year:

(A) For taxable years beginning on or after January 1, 1991, and before January 1, 1993, the individual must attain 58 years of age before the close of the taxable year.

(B) For taxable years beginning on or after January 1, 1993, and before January 1, 1995, the individual must attain 59 years of age before the close of the taxable year.

(C) For taxable years beginning on or after January 1, 1995, and before January 1, 1997, the individual must attain 60 years of age before the close of the taxable year.

(D) For taxable years beginning on or after January 1, 1997, and before January 1, 1999, the individual must attain 61 years of age before the close of the taxable year.

(E) For taxable years beginning on or after January 1, 1999, the individual must attain 62 years of age before the close of the taxable year.

(b) “Household income” has that meaning given in ORS 310.630 except that “household income” shall not include Social Security benefits received by the taxpayer or the spouse of the taxpayer.

(A) For eligible individuals filing a joint return, the lesser of the pension income of the eligible individuals received during the taxable year or the excess, if any, of $15,000 over the sum of the following amounts:

(i) Any Social Security benefits received by the eligible individual, or by the spouse of the individual, during the taxable year; and

(ii) The excess, if any, of household income over $30,000.

(B) For an eligible individual filing a return other than a joint return, the lesser of the pension income of the eligible individual received during the taxable year or the excess, if any, of $7,500 over the sum of the following amounts:

(i) Any Social Security benefits received by the eligible individual during the taxable year; and

(ii) The excess, if any, of household income over $15,000.

(d) “Pension income” means income included in Oregon taxable income from:

(A) Distributions from or pursuant to an employee pension benefit plan, as defined in section 3(2) of the Employee Retirement Income Security Act of 1974, which satisfies the requirements of section 401 of the Internal Revenue Code;

(B) Distributions from or pursuant to a public retirement system of this state or a political subdivision of this state, or a public retirement system created by an Act of this state or a political subdivision of this state, or the public retirement system of any other state or local government;

(C) Distributions from or pursuant to a federal retirement system created by the federal government for any officer or employee of the United States, including any person retired from service in the United States Civil Service, the Armed Forces of the United States or any agency or subdivision thereof;

(D) Distributions or withdrawals from or pursuant to an eligible deferred compensation plan which satisfies the requirements of section 457 of the Internal Revenue Code;

(E) Distributions or withdrawals from or pursuant to an individual retirement account, annuity or trust or simplified employee pension which satisfies the requirements of section 408 of the Internal Revenue Code; and

(F) Distributions or withdrawals from or pursuant to an employee annuity, including custodial accounts treated as annuities, subject to section 403 (a) or (b) of the Internal Revenue Code.

(e) “Social Security benefits” means Social Security benefits, as defined in section 86 of the Internal Revenue Code (Title II Social Security or tier 1 railroad retirement benefits).

(3) If a change in the taxable year of the eligible individual occurs as described in ORS 314.085, or if the Department of Revenue terminates the tax year of the eligible individual under ORS 314.440, the credit allowed by this section shall be prorated or computed in a manner consistent with ORS 316.085.

(4) If a change in the status of the eligible individual from resident to nonresident or from nonresident to resident occurs, the credit allowed by this section shall be determined in a manner consistent with subsection (1) of this section. [1991 c.823 §5; 1997 c.839 §13; 1999 c.90 §12; 2001 c.660 §39]

Note: Section 36, chapter 913, Oregon Laws 2009, provides:

Sec. 36. A credit may not be claimed under ORS 316.157 for tax years beginning on or after January 1, 2014. [2009 c.913 §36]

316.158 Effect upon ORS 316.157 of determination of invalidity; severability. (1) It is the intent of the Legislative Assembly that no part of ORS 316.157 be the law if any part of ORS 316.157 is held to be invalid or unconstitutional. However, no amended return or payment of additional taxes shall be required for any year prior to the year in which any part of ORS 316.157 is held to be invalid or unconstitutional by a court of last resort.

(2) Except as provided in subsection (1) of this section, it is the intent of the Legislative Assembly that the provisions of ORS 238.445, 310.635, 316.087, 316.157, 316.158, 316.680 and 316.695 be severable as provided in ORS 174.040. [1991 c.823 §9]

Note: 316.158 was enacted into law by the Legislative Assembly but was not added to or made a part of ORS chapter 316 or any series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation.

316.159 Subtraction for certain retirement distributions contributed to retirement plan during period of nonresidency; substantiation rules. (1)(a) In addition to other modifications to federal taxable income contained in this chapter, there shall be subtracted from federal taxable income of a resident individual the distributions received by the individual from a plan or trust described under subsection (2) of this section to the extent that:

(A) The distributions consist of contributions made in a tax period during which the individual was a nonresident; and

(B) The distributions consist of contributions made in a tax period for which no deduction, exclusion or exemption for the contributions was allowed or allowable to the individual for purposes of a state personal net income tax imposed during the period by the state of which the individual was a resident; and

(C) No deduction, exclusion, subtraction or other tax benefit has been allowed for the distributions by another state before the individual becomes a resident of this state.

(b) For purposes of this section, if any distributions (lump sum or periodic) received by a resident individual from a plan or trust described in subsection (2) of this section meet the requirements of paragraph (a) of this subsection, then for purposes of the subtraction allowed by this section, those distributions shall be considered to be the distributions first received by the individual after the individual has become a resident of this state.

(c) For purposes of ORS 316.082 (credit for taxes paid to another state), any distributions received by a resident individual from a plan or trust described in subsection (2) of this section which meet the requirements of paragraph (a) of this subsection shall be considered income subject to tax under this chapter notwithstanding the exclusion under this section.

(2) A plan or trust is described in this section if:

(a) The plan or trust is an individual retirement account described in section 408 of the Internal Revenue Code;

(b) The trust forms part of a pension or profit-sharing plan that provides contributions or benefits for employees, some or all of whom are owner-employees, as defined under section 401(c)(3) of the Internal Revenue Code;

(c) The plan or trust is an annuity contract purchased on behalf of an employee of a charitable organization or public school as described under section 403(b) of the Internal Revenue Code; or

(d) The plan or trust is an eligible deferred compensation plan established and maintained by an employer that is a state or local government, a political subdivision thereof, or a tax exempt organization, on behalf of an employee of the employer, as described under section 457 of the Internal Revenue Code.

(3) The following contributions are not contributions to which the subtraction under subsection (1) of this section is accorded:

(a) Contributions made during a tax period, or portion thereof, for which the taxpayer was a nonresident required to file an Oregon return, to the extent that a deduction or exclusion was allowable under this chapter for those contributions; or

(b) Contributions for which the taxpayer was allowed a credit for taxes paid to another state under ORS 316.082.

(4) A subtraction shall not be allowed under this section for interest or other income arising from investment of contributions made to a plan or trust described in subsection (2) of this section.

(5) For purposes of the subtraction allowed under subsection (1) of this section:

(a) Distributions received by the taxpayer from a plan or trust described in subsection (2) of this section shall be considered to initially consist of a recovery of contributions.

(b) Once the distributions equal the cumulative contributions, all further distributions shall constitute interest or other income arising from investment of the contributions.

(6) The Department of Revenue may adopt rules requiring substantiation of the contributions and tax treatment upon which the subtraction under this section is based. Failure to provide substantiation as required under the rules shall result in denial of the subtraction otherwise allowed under this section. The requirement for substantiation may be waived partially, conditionally or absolutely, as provided under ORS 315.063. [1991 c.838 §2; 1995 c.54 §11; 1995 c.815 §6]

316.160 [1953 c.304 §18; 1965 c.26 §3; repealed by 1969 c.493 §99]

COLLECTION OF TAX AT SOURCE OF PAYMENT

(Generally)

316.162 Definitions for ORS 316.162 to 316.221. As used in ORS 316.162 to 316.221:

(1) “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.

(2) “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 49 U.S.C. 14503 and 40116 prohibit the remuneration from withholding for state income taxes.

(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 provided by an independent contractor, as defined in ORS 670.600.

(k) To or on behalf of an employee, a beneficiary of an employee or an alternate payee under or to an eligible deferred compensation plan that, at the time of the payment, is a plan described in section 457(b) of the Internal Revenue Code and that is maintained by an eligible employer described in section 457(e)(1)(A) of the Internal Revenue Code.

(L) When the remuneration is exempt from taxation under this chapter.

(3) “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. [1969 c.493 §24; 1971 c.690 §1; 1973 c.229 §1; 1977 c.604 §1; 1981 c.705 §3; 1985 c.87 §3; 1989 c.762 §2; 1997 c.839 §15; 1999 c.21 §42; 1999 c.90 §13; 1999 c.580 §9; 2001 c.660 §40; 2003 c.77 §16; 2003 c.704 §6; 2005 c.533 §7]

316.164 When surety bond or letter of credit required of employer; enforcement. (1) Except as provided in subsection (3) of this section, if the Department of Revenue makes the findings required under subsection (2) of this section, the department may require any employer subject to ORS 316.162 to 316.221, except the state or its political subdivisions, to post a surety bond, or irrevocable letter of credit issued by an insured institution, as defined in ORS 706.008, with the department, to secure future payment of amounts required to be withheld and paid over to the department under ORS 316.162 to 316.221. The bond or letter of credit shall be in an amount equal to the amounts required to be withheld upon the wages paid or estimated to be paid by the employer for a period of four calendar quarters. The bond or letter of credit shall be in a form acceptable to the department. Posting of the bond or letter of credit shall not relieve the employer from withholding and paying over amounts based on wages paid by the employer under any provision of ORS 316.162 to 316.221. The department may, in its discretion, at any time apply such bond or letter of credit or part thereof to the delinquencies or indebtedness of the employer arising under any provision of ORS 316.162 to 316.221 and accruing after the date the bond or letter of credit was posted. Appeal of an action of the department under this section shall not relieve an employer of the requirement during the pendency of the appeal.

(2) Before requiring an employer to post a bond or irrevocable letter of credit under subsection (1) of this section, the department shall determine that the employer has failed to make payment to the department of amounts required to be withheld and paid over under any provision of ORS 316.162 to 316.221 for at least three calendar quarters, and the total amount of delinquent payments exceeds $2,500, exclusive of interest or penalties. For purposes of this subsection, a payment shall not be considered delinquent if the employer’s liability to withhold is subject to appeal to the tax court.

(3) The department shall not require a bond or irrevocable letter of credit to be posted under this section if the employer elects to notify the department of the times of payment of wages to the employees of the employer, and, notwithstanding ORS 316.197, to pay over amounts withheld within three banking days after the dates the wages were paid.

(4) Before requiring an employer to post a bond or irrevocable letter of credit or make payment of amounts required to be withheld in the manner prescribed in subsection (3) of this section, the department shall attempt to obtain payment of delinquent amounts through other methods of collection, however, the department is not required to seize or sell real or personal property in order to comply with the requirements of this subsection.

(5) Any bond or irrevocable letter of credit required under subsection (1) of this section shall become the sole property of the department and shall be held by the department to guarantee payment of withholding taxes by the employer. The bond or letter of credit shall be held for the benefit of the State of Oregon, subject only to the provisions of subsection (6) of this section. The bond or letter of credit shall be prior to all other liens, claims or encumbrances and shall be exempt from any process, attachment, garnishment or execution.

(6) If an employer ceases to be an employer subject to ORS 316.162 to 316.221, the department shall, upon receipt of all payments due from the employer for withheld amounts, cancel any bond or irrevocable letter of credit given under this section. Such bonds or letters of credit held for the benefit of the State of Oregon shall first be applied to any indebtedness or deficiencies due from the employer under ORS 316.162 to 316.221 and accruing after the date the bond or letter of credit was posted before any return is made to the employer. The employer shall have no interest in such bond or letter of credit prior to full compliance with this section and all provisions of ORS 316.162 to 316.221.

(7) If an employer required to post a bond or irrevocable letter of credit or make payment of amounts withheld in the manner prescribed under this section makes full payment of all delinquent amounts due and owing at the time the bond, letter of credit or accelerated payment schedule was required and makes payment of amounts due under ORS 316.162 to 316.221 and files returns required in connection with those payments in a timely manner for the succeeding four calendar quarters, the department shall release the employer from the requirement to post the bond or letter of credit or make accelerated payments of amounts withheld.

(8) If any employer fails to comply with subsections (1) to (7) of this section, the Oregon Tax Court, upon commencement of an action by the department for that purpose, may order the employer to post the required bond or irrevocable letter of credit or make accelerated payments of amounts withheld. The employer’s failure to obey an order of the court is punishable by contempt. If the Oregon Tax Court determines that an order of compliance enforceable by contempt proceedings will not assure the payment of withheld taxes by the employer, the court may enjoin the employer from further employing individuals in this state or continuing in business therein until the employer has complied with subsections (1) to (7) of this section. [1985 c.406 §§2,3; 1991 c.331 §143; 1995 c.650 §36; 1997 c.631 §§453,454]

316.165 [1953 c.304 §19; repealed by 1969 c.493 §99]

316.167 Withholding of tax required; elective provisions for agricultural employees; liability of supplier of funds to employer for taxes. (1) Every employer at the time of the payment of wages to any employee shall deduct and retain from such wages an amount determined, at the employer’s election, either (a) by a “percentage method” withholding table or (b) by “wage bracket” withholding tables, prepared and furnished under the rules and regulations of the Department of Revenue. However, in the case of wages paid to an employee whose services to the employer consist solely of labor in connection with the planting, cultivating or harvesting of seasonal agricultural crops, the employer may elect to withhold two percent of the total wages paid without regard to any withholding exemptions.

(2) Except in the case of an agricultural employee, the amount withheld shall be computed on the basis of the total amount of the wages and the number of withholding exemptions claimed by the employee, without deduction for any amount withheld.

(3) If a lender, surety or other person who supplies funds to or for the account of an employer for the purpose of paying wages of the employees of such employer has actual notice or knowledge that such employer does not intend to or will not be able to make timely payment or deposit of the tax required to be deducted and withheld, such lender, surety or other person shall be liable to the State of Oregon in a sum equal to the taxes together with interest which are not timely paid over to the department. Such liability shall be limited to the principal amount supplied by such lender, surety or other person, and any amounts so paid to the department shall be credited against the liability of the employer.

(4) With the approval of the Oregon Department of Administrative Services, the department may enter into contracts with banking institutions including but not limited to Federal Reserve Banks, incorporated banks, trust companies, domestic building and loan associations, savings and loan associations or credit unions authorizing them to receive as financial agents of the department any tax required to be withheld and paid to the department. [1969 c.493 §25; 1975 c.394 §1; 1977 c.604 §2; 1982 s.s.1 c.1 §1]

316.168 Employer required to file combined quarterly tax report. (1) Except as otherwise provided by law, every employer subject to the provisions of ORS 316.162 to 316.221, 656.506 and ORS chapter 657, or a payroll-based tax imposed by a mass transit district and administered by the Department of Revenue under ORS 305.620, shall make and file a combined quarterly tax and assessment report upon a form prescribed by the department.

(2) The report shall be filed with the Department of Revenue on or before the last day of the month following the quarter to which the report relates and shall be deemed received on the date of mailing, as provided in ORS 305.820.

(3) The report shall be accompanied by payment of any tax or assessment due and a combined tax and assessment payment coupon prescribed by the department. The employer shall indicate on the coupon the amount of the total payment and the portions of the payment to be paid to each of the tax or assessment programs.

(4) The Department of Revenue shall credit the payment to the tax or assessment programs in the amounts indicated by the employer on the coupon and shall promptly remit the payments to the appropriate taxing or assessing body.

(5) If the employer fails to allocate the payment on the coupon, the department shall allocate the payment to the proper tax or assessment programs on the basis of the percentage the payment bears to the total amount due.

(6) The Department of Revenue shall distribute copies of the combined quarterly tax and assessment report and the necessary tax or assessment payment information to each of the agencies charged with the administration of a tax or assessment covered by the report.

(7) The Department of Revenue, the Employment Department and the Department of Consumer and Business Services shall develop a system of account numbers and assign to each employer a single account number representing all of the tax and assessment programs included in the combined quarterly tax and assessment report. [1989 c.901 §2; 1993 c.760 §2; 2009 c.33 §20]

316.169 Circumstances in which person other than employer required to withhold tax. (1) If a lender, surety or other person who is not an employer with respect to an employee pays wages directly to the employee, or to an agent on behalf of the employee, the lender, surety or other person shall deduct and retain from the wages, and shall be liable to this state for, an amount equal to the amount required to be withheld from the employee’s wages by the employer under ORS 316.167.

(2) A lender, surety or other person described under this section shall file a combined quarterly tax report and make payment of the tax or assessment that is due in the time and manner prescribed for employers under ORS 316.168.

(3) Amounts paid under this section shall be credited against the liability of the employer under ORS 316.167.

(4) A lender, surety or other person described under this section shall be considered to be an employer with respect to withholdings made under this section or required to be made under this section for purposes of ORS 316.191, 316.197, 316.202, 316.207 and 316.212.

(5) The employer of an employee that receives wages from a lender, surety or other person shall not be discharged from any liability or other obligation under ORS 316.162 to 316.221 except as provided for in subsection (3) of this section. [1997 c.133 §6]

316.170 [1953 c.304 §20; repealed by 1969 c.493 §99]

316.171 Application of tax and report to administration of tax laws. Except as provided in this section and ORS 314.840, 316.168, 316.197, 316.202 and 657.571, the statutes and regulations applicable to each agency, requiring a report and imposing a tax, shall govern the audit and examination of reports and returns, determination of deficiencies, assessments, claims for refund, penalties, interest, administrative and judicial appeals and the procedures relating thereto. [1989 c.901 §3]

316.172 Tax withholding tables to be prepared by department. (1) The Department of Revenue shall prepare a table for use with the percentage method that provides for the deduction and withholding of a tax equal to a specific percent (to be determined by the department) of the amount by which the wages for a given payroll period (daily, weekly, biweekly, semimonthly, monthly, quarterly, semiannually or annually, as the case may be) exceed the number of withholding exemptions claimed, multiplied by the amount of one such exemption for each payroll period (such amount being determined by the department for each such period). The determinations of the department shall result, so far as is practicable, in withholding from the employee a sum substantially equivalent to the amount of the tax that the employee will be required to pay under this chapter upon such wages. To accomplish this purpose, the department may make special provision for employees who are in the state for limited periods of time.

(2) The department shall prepare tables for use in computing withholding of tax by wage brackets. The wage brackets shall be graduated so that the amount withheld is, as far as practicable, substantially equivalent to the amount of the tax that the employee will be required to pay under this chapter upon such wages. [1969 c.493 §26; 1973 c.402 §20]

316.175 [1953 c.304 §21; repealed by 1969 c.493 §99]

316.177 Reliance on withholding statement; penalty for statement without reasonable basis. (1) If an employee does not claim a different number of withholding exemptions for state withholding purposes, the employee shall be entitled to the same number of withholding exemptions as the number of withholding exemptions to which the employee is entitled for federal income tax withholding purposes. If an employee does not claim a different number of withholding exemptions for state withholding purposes, the employer may rely upon the number of federal withholding exemptions claimed by the employee, or authorized or specified under the Internal Revenue Code. If the employee does claim a different number of withholding exemptions for state withholding purposes, the employer shall rely on the number specified on that claim.

(2) If any employee makes a statement for federal income tax withholding purposes which claims more than 10 withholding exemptions, or claims exemption from withholding and the employee’s income is expected to exceed $200 per week for both federal and state purposes, or claims exemption from withholding for state purposes but not for federal purposes, and as of the time the statement was made there was no reasonable basis for the statement, the Department of Revenue shall assess and collect from the employee a penalty of $500.

(3) The penalty imposed under this section is in addition to any other penalty imposed by law. Any employee against whom a penalty is assessed under this section may appeal to the tax court as provided in ORS 305.404 to 305.560. If the penalty is not paid within 10 days after the order of the tax court becomes final, the department may record the order and collect the amount assessed without interest in the same manner as income tax deficiencies are recorded and collected under ORS 314.430.

(4) The department may waive all or any part of the penalty imposed under subsection (2) of this section if the income tax liability of the employee for the taxable year is equal to or less than the sum of:

(a) The credits against taxes allowed for purposes of this chapter; and

(b) The payments of estimated tax which are considered payments on account of the tax liability of the employee under ORS 316.579 and 316.583. [1969 c.493 §27; 1987 c.293 §19; 1987 c.843 §20; 1993 c.730 §42; 1995 c.650 §37]

316.180 [1953 c.304 §22; repealed by 1969 c.493 §99]

316.182 Exemption certificate. (1) Subject to subsection (2) or (3) of this section and if the employee does not claim a different number of withholding exemptions for purposes of this chapter, an employer shall use the exemption certificate filed by the employee with the employer under the income tax withholding provisions of the Internal Revenue Code for determining the number of withholding exemptions to be used in computing the tax to be withheld under ORS 316.167 and 316.172. If a new exemption certificate is not filed as provided under section 1581 of the Tax Reform Act of 1986 (P.L. 99-514) for federal purposes, the employer shall use the same number of withholding exemptions as used for purposes of the Internal Revenue Code for determining the amount of tax to be withheld under ORS 316.167 and 316.172.

(2) The Department of Revenue may require an exemption certificate to be filed on a form prescribed by the department in any circumstance where the department finds that an exemption certificate filed for purposes of the Internal Revenue Code does not properly reflect the number of withholding exemptions allowable under this chapter.

(3) No exemption certificate need be procured from an employee whose wages consist of wages as defined in ORS 316.162 (2)(e). [1969 c.493 §28; 1987 c.293 §20; 1997 c.839 §16; 2001 c.660 §41]

316.185 [1953 c.304 §23; 1955 c.129 §1; subsection (5) derived from 1955 c.129 §2; 1965 c.26 §4; repealed by 1969 c.493 §99]

316.187 Amount withheld is in payment of employee’s tax. The amounts deducted from the wages of an employee during any calendar year in accordance with ORS 316.167 and 316.172 shall be considered to be in part payment of the tax on such employee’s income for the taxable year which begins within such calendar year, and the return made by the employer pursuant to ORS 316.202 shall be accepted by the Department of Revenue as evidence in favor of the employee of the amounts so deducted from the employee’s wages. [1969 c.493 §29]

316.189 Withholding of state income taxes from certain periodic payments. (1) As used in this section:

(a) “Commercial annuity” means an annuity, endowment or life insurance contract issued by an insurance company authorized to transact insurance in the State of Oregon.

(b) “Department” means the Oregon Department of Revenue.

(c) “Designated distribution” means any distribution or payment from or under an employer deferred compensation plan, an individual retirement plan or a commercial annuity. “Designated distribution” does not include any amount treated as wages as defined in ORS 316.162, the portion of any distribution or payment that is not includable in the gross income of the recipient or any distribution or payment made under section 404(k)(2) of the Internal Revenue Code.

(d) “Employer deferred compensation plan” means any pension, annuity, profit-sharing or stock bonus plan or other plan deferring the receipt of compensation.

(e) “Individual retirement plan” means an individual retirement account described in section 408(a) of the Internal Revenue Code or an individual retirement annuity described in section 408(b) of the Internal Revenue Code.

(f) “Nonperiodic distribution” means any designated distribution which is not a periodic payment.

(g) “Payer” means any payer of a designated distribution doing business in or making payments or distributions from sources in this state.

(h) “Periodic payment” means a designated distribution which is an annuity or similar periodic payment.

(i) “Plan administrator” means a plan administrator as described in section 414(g) of the Internal Revenue Code, who is the administrator of a plan created by an Oregon employer.

(j) “Qualified total distribution” means any designated distribution made under a retirement, annuity or deferred compensation plan described in section 401(a), 403(a) or 457(b) of the Internal Revenue Code, that consists of the balance to the credit of the employee, exclusive of accumulated deductible employee contributions, made within one tax year of the recipient.

(2)(a) The payer of any periodic payment shall withhold from such payment the amount which would be required to be withheld from such payment under ORS 316.167 if the payment were wages paid by an employer to an employee. The time and manner of payment of withheld amounts to the department shall be the same as that required under ORS 316.197 for withholding of income taxes from wages.

(b) The payer of any nonperiodic distribution shall withhold from such distribution an amount determined under tables prescribed by the department.

(c) The maximum amount to be withheld under this section on any designated distribution shall not exceed 10 percent of the amount of money and the fair market value of other property received in the distribution. If the distribution is not subject to withholding for federal income tax purposes under section 3405 of the Internal Revenue Code, it shall not be subject to withholding under this section.

(3)(a) Except as provided in paragraph (b) of this subsection, the payer of a designated distribution shall withhold and be liable for payment of amounts required to be withheld under this section.

(b) In the case of any plan described in section 401(a), 403(a) or 457(b) of the Internal Revenue Code, or section 301(d) of the Tax Reduction Act of 1975, the plan administrator shall withhold and be liable for payment of amounts required to be withheld under this section, unless the plan administrator has directed the payer to withhold the tax and has provided the payer with the information required by rule of the department.

(4)(a) An individual may elect to have no withholding by a payer under subsection (2) of this section. If an individual has elected to have no federal withholding from payments or distributions described in this section the individual shall be deemed to have elected no withholding for state purposes, unless the individual notifies the payer otherwise.

(b) An election made under this subsection shall be effective as provided under rules promulgated by the department. The rules required under this paragraph shall provide the manner in which an election may be revoked and when such revocation shall be effective.

(5) The payer of any periodic payment or nonperiodic distribution shall give notice to the payee of the right to make an election to have no state withholding from the payment or distribution. The department shall provide by rule for the time and manner of giving the notice required under this subsection.

(6) Any rules permitted or required to be promulgated by the department under this section shall, insofar as is practicable, be consistent with corresponding provisions of section 3405 of the Internal Revenue Code and regulations promulgated thereunder.

(7) Any designated distribution shall be treated as if it were wages paid by an employer to an employee within the meaning of ORS 316.162 to 316.221 for all other purposes of ORS 316.162 to 316.221. In the case of any designated distribution not subject to withholding by reason of an election under subsection (4) of this section, the amount withheld shall be treated as zero. [1985 c.87 §9; 2003 c.77 §17]

Note: 316.189 was added to and made a part of ORS chapter 316 by legislative action but was not added to any smaller series therein. See Preface to Oregon Revised Statutes for further explanation.

316.190 [Amended by 1953 c.304 §24; 1955 c.92 §1; subsection (3) derived from 1955 c.92 §2; repealed by 1969 c.493 §99]

316.191 Withholding taxes at time and in manner other than required by federal law; rules. Notwithstanding the provisions of ORS 316.197:

(1) When adherence to the federal withholding system creates an undue burden on an employer, the employer may request and the Department of Revenue may permit that taxes be withheld and paid over within a time and in a manner other than that required under federal law.

(2) If the department permits the modification of the time and manner of withholding and payment of taxes under this section the method of withholding and payment permitted shall, whenever possible, provide for withholding and payment in a manner similar to that required for other employers required to deduct and retain similar amounts of income taxes from wages paid to their employees in Oregon.

(3) The department shall adopt rules establishing the manner in which an employer may request a modification under this section, and may by rule prescribe a modification of the time and manner of withholding and payment of taxes in such instances as it considers necessary. The department may adopt by rule any exceptions to federal withholding requirements that have been adopted by the Internal Revenue Service. [1985 c.87 §2]

316.192 [1969 c.493 §30; 1971 c.333 §2; repealed by 1985 c.602 §7]

316.193 Withholding of state income taxes from federal retired pay for members of uniformed services. (1) The Department of Revenue may enter into an agreement with the appropriate United States agency or instrumentality for the voluntary withholding of state income taxes from the retired pay of members of the uniformed services under the provisions of section 654, Public Law 98-525. The department is hereby authorized to do all acts and comply with any requirements necessary to enable retired members of the uniformed services to elect voluntary withholding of state income taxes from their retired pay.

(2) The department may establish by rule a minimum monthly amount to be withheld and paid over for any member electing voluntary withholding of state income taxes under an agreement entered into under subsection (1) of this section.

(3) Notwithstanding ORS 314.835 or 314.840, the department may disclose to the Department of Defense the name, address or Social Security number of any member electing voluntary withholding of state income taxes whenever necessary to enable the Department of Defense to implement such withholding under the terms of an agreement entered into under subsection (1) of this section.

(4) As used in this section:

(a) “Member” means any person retired from a regular or reserve component of one of the uniformed services, who has Oregon personal income tax liability in connection with the receipt of retired pay.

(b) “Retired pay” means pay and benefits received based on conditions of the federal retirement law, pay grade, years of service, date of retirement, transfer to Fleet Reserve or Fleet Marine Corps Reserve or disability.

(c) “Uniformed services” means the Army, Navy, Air Force, Marine Corps, Coast Guard, commissioned corps of the United States Public Health Service and the commissioned corps of the National Oceanic and Atmospheric Administration. [1985 c.87 §8]

Note: 316.193 was added to and made a part of ORS chapter 316 by legislative action but was not added to any smaller series therein. See Preface to Oregon Revised Statutes for further explanation.

316.194 Withholding from lottery prize payments; rules. (1) If a lottery prize payment for a prize is $5,000 or more, and the payment is made to an individual, the Oregon State Lottery Commission shall withhold eight percent of the payment. A payment made to a partnership, estate, trust or corporation shall not be subject to the withholding of tax.

(2) The commission shall pay to the Department of Revenue any amounts withheld under this section in the time and manner provided by the department by rule.

(3) If a prize exceeds $600, the commission shall provide the prize recipient an income reporting form indicating the amount of the prize payment being made. At the request of the prize recipient or the department, the commission shall provide the requester a copy of an income reporting form provided under this subsection. [1997 c.849 §4; 1999 c.43 §1; 1999 c.143 §5; 2003 c.48 §1]

316.195 [1953 c.304 §25; repealed by 1969 c.493 §99]

316.196 Withholding of state income taxes from federal retirement pay for civil service annuitant. (1) The Department of Revenue may enter into an agreement with the United States Office of Personnel Management for the voluntary withholding of state income taxes from the retirement pay of United States civil service annuitants under the provisions of section 1705 of Public Law 97-35. The department is hereby authorized to do all acts and comply with any requirements necessary to enable retired United States civil servants to elect voluntary withholding of state income taxes from their retirement pay.

(2) The department shall establish by rule a procedure under which a United States civil service annuitant may request voluntary withholding under an agreement entered into under subsection (1) of this section. The procedure may include a minimum monthly amount to be withheld and paid over to the state.

(3) Notwithstanding ORS 314.835 or 314.840, the department may disclose to the United States Office of Personnel Management the name, address or Social Security number of any United States civil service annuitant electing voluntary withholding of state income taxes whenever necessary to enable the United States Office of Personnel Management to implement such withholding under the terms of an agreement entered into under subsection (1) of this section.

(4) As used in this section:

(a) “Civil service annuitant” means any person retired from the federal civil service who has Oregon personal income tax liability in connection with the receipt of retirement pay. “Civil service annuitant” includes a survivor annuitant within the meaning of Title 5, United States Code, section 8331.

(b) “Retirement pay” means regular, recurring monthly annuity payments received based on conditions of federal retirement law, but does not include retired pay as defined in ORS 316.193. [1985 c.87 §7]

Note: 316.196 was added to and made a part of ORS chapter 316 by legislative action but was not added to any smaller series therein. See Preface to Oregon Revised Statutes for further explanation.

316.197 Payment to department by employer; interest on delinquent payments. (1)(a) Except as provided under ORS 316.191 or paragraph (b) of this subsection, within the time that each employer is required to pay over taxes withheld for federal income tax purposes for any period, the employer shall pay over to the Department of Revenue or to a financial agent of the department the amounts required to be withheld under ORS 316.167 and 316.172 for the same period. Any employer not required to withhold federal income taxes for any period but who is required to deduct and retain amounts from wages paid to an employee under ORS 316.167 and 316.172 for the same period shall pay over to the department or financial agent of the department, taxes withheld for the period, within the time and in the manner, as if the employer were required to withhold taxes for the period under federal law.

(b) Notwithstanding the provisions of paragraph (a) of this subsection, any employer of agricultural employees who is not required to withhold federal income taxes for any period but who is required to deduct and retain amounts from wages paid to those employees under ORS 316.167 and 316.172 shall pay over to the department, or financial agent of the department, taxes so withheld at the same time and for the same period for which the employer is required to pay over employer and employee taxes under chapter 21 of the Internal Revenue Code (Federal Insurance Contributions Act).

(2) Every amount so paid over shall be accounted for as part of the collections under this chapter. No employee has any right of action against an employer in respect of any moneys deducted from wages and paid over in compliance or intended compliance with this section.

(3) If any amount required to be withheld and paid over to the department is delinquent, interest shall accrue at the rate prescribed under ORS 305.220 on that amount from the last day of the month following the end of the calendar quarter within which the amount was required to be paid to the department to the date of payment. The provisions of this subsection shall not relieve any employer from liability for a late payment penalty under any other provision of law. [1969 c.493 §31; 1975 c.594 §1; 1982 s.s.1 c.1 §2; 1983 c.697 §1; 1985 c.87 §4; 1989 c.901 §7]

316.198 Payment by electronic funds transfer; phase-in; rules. (1) An employer required to make a combined quarterly tax and assessment payment under ORS 316.168 shall make the payment by means of electronic funds transfer if the employer is required to make federal payroll tax payments electronically.

(2) The Department of Revenue may adopt rules that provide exemptions from the requirement that combined quarterly tax and assessment payments be paid by electronic funds transfer when the taxpayer is disadvantaged by required payment by electronic funds transfer.

(3) The Department of Revenue may accept electronically filed payments voluntarily submitted by an employer who is not required to pay by means of electronic funds transfer.

(4) As used in this section, the term “electronic funds transfer” has the meaning given that term in ORS 293.525. [1997 c.299 §2; 2001 c.28 §6]

316.200 [1953 c.304 §26; 1965 c.26 §5; repealed by 1969 c.493 §99]

316.202 Reports by employer; waiver; penalty for failure to report; rules. (1) With each payment made to the Department of Revenue, every employer shall deliver to the department, on a form prescribed by the department showing the total amount of withheld taxes in accordance with ORS 316.167 and 316.172, and supply such other information as the department may require. The employer is charged with the duty of advising the employee of the amount of moneys withheld, in accordance with such regulations as the department may prescribe, using printed forms furnished or approved by the department for such purpose.

(2) Except as provided in subsection (4) of this section, every employer shall submit a combined quarterly return to the department on a form provided by it showing the number of payments made, the withheld taxes paid during the quarter and an explanation of federal withholding taxes as computed by the employer. The report shall be filed with the department on or before the last day of the month following the end of the quarter.

(3) The employer shall make an annual return to the department on forms provided or approved by it, summarizing the total compensation paid and the taxes withheld for all employees during the calendar year and shall file the same with the department on or before the due date of the corresponding federal return for the year for which report is made. Failure to file the annual report without reasonable excuse on or before the 30th day after notice has been given to the employer of failure subjects the employer to a penalty of $100. The department may by rule require additional information the department finds necessary to substantiate the annual return, including but not limited to copies of federal form W-2 for individual employees, and may prescribe circumstances under which the filing requirement imposed by this subsection is waived.

(4) Notwithstanding the provisions of subsection (2) of this section, employers of agricultural employees may submit returns annually showing the number of payments made and the withheld taxes paid. However, such employers shall make and file a combined quarterly tax report with respect to other tax programs, as required by ORS 316.168. [1969 c.493 §32; 1973 c.83 §1; 1982 s.s.1 c.1 §3; 1983 c.697 §2; 1987 c.366 §4; 1989 c.901 §8; 1993 c.593 §5; 1995 c.815 §1]

316.205 [1953 c.304 §27; repealed by 1957 c.632 §1 (314.280 enacted in lieu of 316.205 and 317.180)]

316.207 Liability for tax; warrant for collection; conference; appeal. (1) Every employer who deducts and retains any amount under ORS 316.162 to 316.221 shall hold the same in trust for the State of Oregon and for the payment thereof to the Department of Revenue in the manner and at the time provided in ORS 316.162 to 316.221.

(2) At any time the employer fails to remit any amount withheld, the department may enforce collection by the issuance of a distraint warrant for the collection of the delinquent amount and all penalties, interest and collection charges accrued thereon. Such warrant shall be issued, recorded and proceeded upon in the same manner and shall have the same force and effect as is prescribed with respect to warrants for the collection of delinquent income taxes.

(3)(a) In the case of an employer that is assessed pursuant to the provisions of ORS 305.265 (12) and 314.407 (1), the department may issue a notice of liability to any officer, employee or member described in ORS 316.162 (3)(b) of such employer within three years from the time of assessment. Within 30 days from the date the notice of liability is mailed to the officer, employee or member, such officer, employee or member shall pay the assessment, plus penalties and interest, or advise the department in writing of objections to the liability and, if desired, request a conference. Any conference shall be governed by the provisions of ORS 305.265 pertaining to a conference requested from a notice of deficiency.

(b) After a conference or, if no conference is requested, a determination of the issues considering the written objections, the department shall mail the officer, employee or member a conference letter affirming, canceling or adjusting the notice of liability. Within 90 days from the date the conference letter is mailed to the officer, employee or member, such officer, employee or member shall pay the assessment, plus penalties and interest, or appeal to the tax court in the manner provided for an appeal from a notice of assessment.

(c) If neither payment nor written objection to the notice of liability is received by the department within 30 days after the notice of liability has been mailed, the notice of liability becomes final. In such event, the officer, employee or member may appeal the notice of liability to the tax court within 90 days after it became final in the manner provided for an appeal from a notice of assessment.

(4)(a) In the case of a failure to file a withholding tax report on the due date, governed by the provisions of ORS 305.265 (10) and 314.400, the department, in addition to the provisions of ORS 305.265 (10) and 314.400, may send notices of determination and assessment to any officer, employee or member described in ORS 316.162 (3)(b) any time within three years after the assessment of an employer described in ORS 316.162 (3)(a). The time of assessment against such officer, employee or member shall be 30 days after the date the notice of determination and assessment is mailed. Within 30 days from the date the notice of determination and assessment is mailed to the officer, employee or member, such officer, employee or member shall pay the assessment, plus penalties and interest, or advise the department in writing of objections to the assessment, and if desired, request a conference. Any conference shall be governed by the provisions of ORS 305.265 pertaining to a conference requested from a notice of deficiency.

(b) After a conference or, if no conference is requested, a determination of the issues considering the written objections, the department shall mail the officer, employee or member a conference letter affirming, canceling or adjusting the notice of determination and assessment. Within 90 days from the date the conference letter is mailed to the officer, employee or member, such officer, employee or member shall pay the assessment, plus penalties and interest, or appeal in the manner provided for an appeal from a notice of assessment.

(c) If neither payment nor written objection to the notice of determination and assessment is received by the department within 30 days after the notice of determination and assessment has been mailed, the notice of determination and assessment becomes final. In such event, the officer, employee or member may appeal the notice of determination and assessment to the tax court within 90 days after it became final in the manner provided for an appeal from a notice of assessment.

(5)(a) More than one officer or employee of a corporation may be held jointly and severally liable for payment of withheld taxes.

(b) Notwithstanding the provisions of ORS 314.835, 314.840 or 314.991, if more than one officer or employee of a corporation may be held jointly and severally liable for payment of withheld taxes, the department may require any or all of the officers, members or employees who may be held liable to appear before the department for a joint determination of liability. The department shall notify each officer, member or employee of the time and place set for the determination of liability.

(c) Each person notified of a joint determination under this subsection shall appear and present such information as is necessary to establish that person’s liability or nonliability for payment of withheld taxes to the department. If any person notified fails to appear, the department shall make its determination on the basis of all the information and evidence presented. The department’s determination shall be binding on all persons notified and required to appear under this subsection.

(d)(A) If an appeal is taken to the Oregon Tax Court pursuant to ORS 305.404 to 305.560 by any person determined to be liable for unpaid withholding taxes under this subsection, each person required to appear before the department under this subsection shall be impleaded by the plaintiff. The department may implead any officer, employee or member who may be held jointly and severally liable for the payment of withheld taxes. Each person impleaded under this paragraph shall be made a party to the action before the tax court and shall make available to the tax court such information as was presented before the department, as well as such other information as may be presented to the court.

(B) The court may determine that one or more persons impleaded under this paragraph are liable for unpaid withholding taxes without regard to any earlier determination by the department that an impleaded person was not liable for unpaid withholding taxes.

(C) If any person required to appear before the court under this subsection fails or refuses to appear or bring such information in part or in whole, or is outside the jurisdiction of the tax court, the court shall make its determination on the basis of all the evidence introduced. All such evidence shall constitute a public record and shall be available to the parties and the court notwithstanding ORS 314.835, 314.840 or 314.991. The determination of the tax court shall be binding on all persons made parties to the action under this subsection.

(e) Nothing in this section shall be construed to preclude a determination by the department or the Oregon Tax Court that more than one officer, employee or member are jointly and severally liable for unpaid withholding taxes. [1969 c.493 §33; 1985 c.406 §4; 1989 c.423 §3; 1993 c.593 §6; 1995 c.650 §38; 1997 c.839 §17; 2001 c.660 §42; 2005 c.688 §4]

316.209 Applicability of ORS 316.162 to 316.221 when services performed by qualified real estate broker or direct seller. (1) For purposes of ORS 316.162 to 316.221, in the case of services performed as a qualified real estate broker, qualified principal real estate broker or as a direct seller:

(a) The individual performing the services shall not be treated as an employee; and

(b) The person for whom the services are performed shall not be treated as an employer.

(2) As used in this section, “qualified real estate broker” or “qualified principal real estate broker” means any individual if:

(a) The individual is a real estate licensee under ORS 696.010 to 696.495, 696.600 to 696.785, 696.800 to 696.870 and 696.995;

(b) Substantially all of the remuneration (whether or not paid in cash) for the services performed by the individual as a real estate licensee is directly related to sales or other output (including the performance of services) rather than to the number of hours worked; and

(c) The services performed by the individual are performed pursuant to a written contract between the individual and the real estate broker, principal real estate broker or real estate appraiser for whom the services are performed and the contract provides that the individual will not be treated as an employee with respect to the services for Oregon tax purposes.

(3) As used in this section, “direct seller” means any individual if:

(a) The individual is:

(A) Engaged in the trade or business of selling, or soliciting the sale of, consumer products to any buyer on a buy-sell basis, a deposit-commission basis or any similar basis, which the Department of Revenue prescribes by rule, for resale by the buyer or any other person, in the home or otherwise than in a permanent retail establishment; or

(B) Engaged in the trade or business of selling, or soliciting the sale of, consumer products in the home or otherwise than in a permanent retail establishment;

(b) Substantially all the remuneration (whether or not paid in cash) for the performance of the services described in paragraph (a) of this subsection is directly related to sales or other output (including the performance of services) rather than to the number of hours worked; and

(c) The services performed by the individual are performed pursuant to a written contract between the individual and the person for whom the services are performed and the contract provides that the individual will not be treated as an employee with respect to the services for Oregon tax purposes. [1983 c.597 §3; 2001 c.300 §61]

316.210 [1953 c.304 §28; repealed by 1957 c.632 §1 (314.285 enacted in lieu of 316.210 and 317.185)]

316.212 Application of penalties, misdemeanors and jeopardy assessment; employer as taxpayer. The provisions of the income tax laws in ORS chapters 305 and 314 and this chapter, relating to penalties, misdemeanors and jeopardy assessments, apply to employers subject to the provisions of ORS 316.162 to 316.221, and for these purposes any amount deducted or required to be deducted and remitted to the Department of Revenue under ORS 316.162 to 316.221 is considered the tax of the employer and with respect to such amount the employer is considered as a taxpayer. [1969 c.493 §34; 1982 s.s.1 c.16 §10; 1985 c.87 §5]