314.029 Application of Deficit Reduction Act of 1984 (P.L. 98-369) and Simplification of Imputed Interest Rules of 1985 (P.L. 99-121) to personal income tax

314.031 Application of Deficit Reduction Act of 1984 (P.L. 98-369) and Simplification of Imputed Interest Rules of 1985 (P.L. 99-921) to corporate excise and income tax

314.033 Application of federal Tax Reform Act of 1986 (P.L. 99-514)

314.035 Application of Omnibus Budget Reconciliation Act of 1987 (P.L. 100-203), Family Support Act of 1988 (P.L. 100-485) and Technical and Miscellaneous Revenue Act of 1988 (P.L. 100-647)

314.037 Application of P.L. 101-140, Omnibus Budget Reconciliation Act of 1989 (P.L. 101-239) and Omnibus Budget Reconciliation Act of 1991 (P.L. 101-508)

314.041 Application of Revenue Reconciliation Act of 1993 (P.L. 103-66), the Uruguay Round Agreements Act (P.L. 103-465) and P.L. 104-7

314.047 Application of Tax Relief Extension Act of 1999 (P.L. 106-170) and FSC Repeal and Extraterritorial Income Exclusion Act of 2000 (P.L. 106-519)

314.049 Application of Economic Growth and Tax Relief Reconciliation Act of 2001 (P.L. 107-16) and Job Creation and Worker Assistance Act of 2002 (P.L. 107-147)

314.053 Application of Deficit Reduction Act of 2005 (P.L. 109-171), Tax Increase Prevention and Reconciliation Act of 2005 (P.L. 109-222) and Pension Protection Act of 2006 (P.L. 109-280)

314.075 Evading requirements of law prohibited

314.078 Determination of tax credit amounts

314.080 Venue on failure to comply with law

314.085 Taxable year; rules

314.088 Discharge of tax liability when taxpayer dies while performing military service

314.091 Abeyance of tax during periods of active duty military service

ADJUSTMENT OF RETURNS

314.105 Definitions for ORS 314.105 to 314.135

314.115 Adjustment to correct effect of certain errors; use limited

314.125 When adjustment may be made

314.135 Computation; method of adjustment; credit or setoff limited; recovery after payment limited

314.140 Adjustment of returns of related taxpayers after reallocation of income or deduction on federal return

POLLUTION CONTROL FACILITIES

314.255 Collection of taxes due after revocation of certification of pollution control facility; exceptions to tax relief allowed for pollution control facility

LOBBYING EXPENDITURES

314.256 Lobbying expenditures; proxy tax; rules

CONVEYANCE OF REAL PROPERTY INTEREST

314.258 Conveyance of real property interest; withholding by authorized agent

REMICS AND FASITS

314.260 Taxation of real estate mortgage investment conduits

314.265 Taxation of financial asset securitization investment trusts

METHODS OF ACCOUNTING AND REPORTING INCOME

314.276 Method of accounting

314.287 Costs allocable to inventory

314.295 Apportionment or allocation where two or more organizations, trades or businesses are owned or controlled by the same interests

314.297 Election for alternative determination of farm income; computation of income; rules

314.300 Passive activity loss; determination; treatment; rules

314.302 Interest on deferred tax liabilities with respect to installment obligations; rules

314.306 Income from discharge of indebtedness; bankruptcy; insolvency

314.307 Definitions; reportable transactions

314.308 Reportable transactions; rules

LIABILITY OF TRANSFEREE OR OWNER OF TRUST

314.310 Liability of transferee of taxpayer for taxes imposed on taxpayer

314.330 Lien if grantor or other person determined to be owner of trust

RETURNS

314.355 Returns when tax year changed

314.360 Information returns

314.362 Filing return on magnetic media or other machine-readable form; rules

314.370 Department requiring return or supplementary return

314.380 Furnishing copy of federal or other state return or report; action required when return filed or changed or tax assessed

314.385 Form of returns; time for filing; alternative filing formats; rules

314.395 Time for payment of tax; interest on delayed return

314.397 Manner of payment

314.400 Penalty for failure to file report or return or to pay tax when due; interest; limitation on penalty

314.401 De minimis tax payment not required

314.402 Understatement of taxable income; penalty; waiver of penalty

314.403 Listed transaction understatement; penalty

314.404 Penalty for failure to report reportable transaction

314.406 Penalty for promotion of abusive tax shelter

COLLECTING DELINQUENT TAXES; LIENS; INTEREST AND ADDITIONS TO TAX; REFUNDS

314.407 Assessment of taxes owing but not submitted with return; time of assessment; recording of warrant

314.410 Time limit for notice of deficiency; circumstances when claim for refund may be reduced after time limit; time limit for refund or notice of deficiency for pass-through entity items

314.412 Issuing of notice of deficiency attributable to involuntary conversion; time limit

314.415 Refunds; interest; credits

314.417 Unpaid tax or withholding lien at time of assessment

314.419 Foreclosure of lien

314.421 When lien valid

314.423 Status of lien

314.425 Examining books, records or persons

314.430 Warrant for collection of taxes

314.440 Tax as debt; termination of taxable period and immediate assessment of tax

314.466 Audits, deficiencies, assessments, refunds and appeals governed by ORS chapter 305

314.469 Treatment of moneys collected under ORS 314.406

ESTIMATED TAX PROCEDURE

314.505 Estimate of tax liability by corporations; rules

314.515 Installment schedule for payment of estimated tax

314.518 Estimated tax payments by electronic funds transfer; phase-in; rules

314.520 State agency authority over certain electronic funds transfer payments

314.525 Underpayment of estimated tax; interest; nonapplicability of penalties

DIVISION OF INCOME FOR TAX PURPOSES

(General Provisions)

314.605 Short title; construction

314.606 Status of ORS 314.605 to 314.675 when in conflict with Multistate Tax Compact

314.610 Definitions for ORS 314.605 to 314.675

314.615 When allocation of income from business activity required

314.620 When taxpayer is considered taxable in another state

(Allocation of Nonbusiness Income)

314.625 Certain nonbusiness income to be allocated

314.630 Allocation to this state of net rents and royalties

314.635 Allocation to this state of capital gains and losses

314.640 Allocation to this state of interest and dividends

314.642 Allocation to this state of lottery prizes

314.645 Allocation to this state of patent and copyright royalties

(Apportionment of Business Income)

314.647 Policy

314.650 Business income apportionment

314.655 Determination of property factor

314.660 Determination of payroll factor

314.665 Determination of sales factor; inclusions and exclusions; definitions

(Procedure Where Ordinary Determination Not Satisfactory)

314.670 Additional methods to determine extent of business activity in this state; rules

(Apportionment of Net Loss)

314.675 Apportionment of net loss; net loss deduction; limitations

(Apportionment of Income of Interstate Broadcasters)

314.680 Definitions for ORS 314.680 to 314.690; rules

314.682 Method of apportionment of interstate broadcaster income

314.684 Determination of sales factor

314.686 Determination of net income attributable to business done in state

314.688 Rules

314.690 Scope of provisions

(Application)

314.695 Application of ORS 314.280 and 314.605 to 314.675

EFFECT OF MULTISTATE TAX COMPACT

314.705 Computation of tax when income reported as percentage of sales volume

314.710 Application to allocation and apportionment of income

TAXATION OF PARTNERSHIPS AND S CORPORATIONS

(Partnerships)

314.712 Partnerships not subject to income tax; exceptions

314.714 Character of partnership income; procedure if partner’s treatment of item inconsistent with partnership treatment; rules

314.716 Basis of partner’s interest; gain or loss on sale; election to adjust basis

314.718 Treatment of contributions to partnership

314.720 Treatment of distributions from partnership

314.722 Publicly traded partnerships taxed as corporations

314.723 Electing large partnerships subject to tax; rules

314.724 Information return; penalty; rules

314.726 Application of ORS 314.724

314.727 Disclosure of partnership items to partner

(S Corporations)

314.730 “C corporation” and “S corporation” defined for this chapter and ORS chapters 316, 317 and 318

314.732 Taxation of S corporation; application of Internal Revenue Code; carryforward and carryback

314.734 Taxation of shareholder’s income; computation; character of income, gain, loss or deduction

314.736 Treatment of distributions by S corporation

314.738 Employee fringe benefits; foreign income

314.740 Tax on built-in gain

314.742 Tax on excess net passive income

314.744 S corporation or shareholder elections; rules

314.746 Application of sections 1377 and 1379 of Internal Revenue Code

314.749 Disclosure of S corporation items to shareholder

314.750 Recapture of LIFO benefits

314.752 Business tax credits; allowance to shareholders; rules

(Temporary provisions relating to nonresident return by shareholder or partner are compiled as notes following ORS 314.752)

PASS-THROUGH ENTITIES

314.775 Definitions for ORS 314.775 to 314.784

314.778 Composite returns of pass-through entities; election; effect of election on nonresident owners

314.781 Withholding; required returns and statements; pass-through entity liability

314.784 Circumstances when pass-through entity withholding is not required; rules

ADMINISTRATIVE PROVISIONS

314.805 Department to administer and enforce laws; enforcement districts; branch offices

314.810 Administering oaths and taking acknowledgments

314.815 Rules and regulations

314.835 Divulging particulars of returns and reports prohibited

314.840 Disclosure of information; persons to whom information may be furnished

314.845 Certificate of department as evidence

314.850 Statistics

314.855 Rewards for information

314.860 Disclosure of elderly rental assistance information to assist in recovery of public assistance overpayments; requests for information public record

314.865 Use of certain information for private benefit prohibited

314.870 Time for performing certain acts postponed by reason of service in a combat zone

PENALTIES

314.991 Penalties

314.002 [Repealed by 1953 c.310 §3]

314.004 [Repealed by 1953 c.310 §3]

314.006 [Repealed by 1953 c.310 §3]

314.008 [Repealed by 1953 c.310 §3]

314.010 [Repealed by 1953 c.310 §3]

GENERAL PROVISIONS

314.011 Definitions; conformance with federal income tax law. (1) As used in this chapter, unless the context requires otherwise, “department” means the Department of Revenue.

(2) As used in this chapter:

(a) Any term has the same meaning as when used in a comparable context in the laws of the United States relating to federal income taxes, unless a different meaning is clearly required or the term is specifically defined in this chapter.

(b) Except where the Legislative Assembly has provided otherwise, a reference to the laws of the United States or to the Internal Revenue Code refers to the laws of the United States or to the Internal Revenue Code as they are amended and in effect:

(A) On December 31, 2006; or

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

(c) With respect to ORS 314.105, 314.256 (relating to proxy tax on lobbying expenditures), 314.260 (1)(b), 314.265 (1)(b), 314.302, 314.306, 314.330, 314.360, 314.362, 314.385, 314.402, 314.410, 314.412, 314.525, 314.742 (7), 314.750 and 314.752 and other provisions of this chapter, except those described in paragraph (b) of this subsection, any reference to the laws of the United States or to the Internal Revenue Code means the laws of the United States relating to income taxes or the Internal Revenue Code as they are amended on or before December 31, 2006, even when the amendments take effect or become operative after that date, except where the Legislative Assembly has specifically provided otherwise.

(3) Insofar as is practicable in the administration of this chapter, the department shall apply and follow the administrative and judicial interpretations of the federal income tax law. When a provision of the federal income tax law is the subject of conflicting opinions by two or more federal courts, the department shall follow the rule observed by the United States Commissioner of Internal Revenue until the conflict is resolved. Nothing contained in this section limits the right or duty of the department to audit the return of any taxpayer or to determine any fact relating to the tax liability of any taxpayer.

(4) When portions of the Internal Revenue Code incorporated by reference as provided in subsection (2) of this section refer to rules or regulations prescribed by the Secretary of the Treasury, then such rules or regulations shall be regarded as rules adopted by the department under and in accordance with the provisions of this chapter, whenever they are prescribed or amended.

(5)(a) When portions of the Internal Revenue Code incorporated by reference as provided in subsection (2) of this section are later corrected by an Act or a Title within an Act of the United States Congress designated as an Act or Title making technical corrections, then notwithstanding the date that the Act or Title becomes law, those portions of the Internal Revenue Code, as so corrected, shall be the portions of the Internal Revenue Code incorporated by reference as provided in subsection (2) of this section and shall take effect, unless otherwise indicated by the Act or Title (in which case the provisions shall take effect as indicated in the Act or Title), as if originally included in the provisions of the Act being technically corrected. If, on account of this subsection, any adjustment is required to an Oregon return that would otherwise be prevented by operation of law or rule, the adjustment shall be made, notwithstanding any law or rule to the contrary, in the manner provided under ORS 314.135.

(b) As used in this subsection, “Act or Title” includes any subtitle, division or other part of an Act or Title. [1957 c.632 §40; 1965 c.152 §24; 1971 c.215 §8; 1977 c.870 §39; 1987 c.293 §50; 1989 c.625 §25; 1991 c.457 §16; 1993 c.726 §10; 1995 c.556 §20; 1997 c.325 §32; 1997 c.839 §48; 1999 c.90 §1; 1999 c.224 §9; 2001 c.660 §32; 2003 c.77 §10; 2005 c.94 §74; 2005 c.519 §8; 2005 c.832 §23; 2007 c.614 §10]

314.012 [Repealed by 1953 c.310 §3]

314.013 [2003 c.704 §4; repealed by 2005 c.533 §5]

314.014 [Repealed by 1953 c.310 §3]

314.015 Soccer referees considered independent contractors. Notwithstanding ORS 314.013, for purposes of ORS chapter 316, a person serving as a referee or assistant referee in a youth or adult recreational soccer match shall be considered to be an independent contractor. [2005 c.94 §73]

Note: 314.013 was repealed by section 5, chapter 533, Oregon Laws 2005. The text of 314.015 was not amended by enactment of the Legislative Assembly to reflect the repeal. Editorial adjustment of 314.015 for the repeal of 314.013 has not been made.

314.016 [Repealed by 1953 c.310 §3]

314.018 [Repealed by 1953 c.310 §3]

314.020 [Repealed by 1953 c.310 §3]

314.021 Application of chapter. Except where the context requires otherwise, this chapter is applicable to all laws of this state imposing taxes upon or measured by net income. [1957 c.632 §2; 1961 c.176 §3; 1965 c.152 §25; 1971 c.215 §9; 1977 c.870 §40; 1987 c.293 §51; 1989 c.625 §26; 1995 c.79 §153; 1995 c.556 §21]

Note: Chapter 99, Oregon Laws 2007, is the subject of a referendum petition that may be filed with the Secretary of State not later than September 26, 2007. If the referendum petition is filed with the required number of signatures of electors, chapter 99, Oregon Laws 2007, will be submitted to the people for their approval or rejection at the regular general election held on November 4, 2008. If approved by the people at the general election, chapter 99, Oregon Laws 2007, takes effect December 4, 2008. If the referendum petition is not filed with the Secretary of State or does not contain the required number of signatures of electors, chapter 99, Oregon Laws 2007, takes effect January 1, 2008. Sections 10 and 11, chapter 99, Oregon Laws 2007, provide:

Sec. 10. Section 11 of this 2007 Act is added to and made a part of ORS chapter 314. [2007 c.99 §10]

Sec. 11. This chapter applies to partners in a domestic partnership, as defined in section 3 of this 2007 Act [note under 106.990], and surviving partners as if federal income tax law recognized a domestic partnership in the same manner as Oregon law. [2007 c.99 §11]

314.022 [Repealed by 1953 c.310 §3]

314.024 [Repealed by 1953 c.310 §3]

314.026 [Repealed by 1953 c.310 §3]

314.028 [Repealed by 1953 c.310 §3]

314.029 Application of Deficit Reduction Act of 1984 (P.L. 98-369) and Simplification of Imputed Interest Rules of 1985 (P.L. 99-121) to personal income tax. (1)(a) Notwithstanding ORS 316.012 (1983 Replacement Part), and subject to all other provisions of ORS chapter 316 in effect and applicable to transactions occurring on or after January 1, 1984, the Deficit Reduction Act of 1984 (P.L. 98-369) insofar as it applies to transactions occurring on or after January 1, 1984, shall apply to the same transactions for Oregon tax purposes.

(b) Notwithstanding ORS 316.012 (1985 Replacement Part), and subject to all other provisions of ORS chapter 316 in effect and applicable to transactions occurring on or after January 1, 1985, the Act described as the Simplification of Imputed Interest Rules of 1985 (P.L. 99-121) insofar as it applies to transactions occurring on or after January 1, 1985, shall apply to the same transactions for Oregon tax purposes. The amendments by the Act described as the Simplification of Imputed Interest Rules of 1985 (P.L. 99-121) to section 168 of the Internal Revenue Code apply to property placed in service after May 8, 1985, but do not apply to property to which section 105(b)(2) and (3) of the Act (P.L. 99-121) apply.

(2)(a) If a deficiency is assessed against any taxpayer for a tax year for which subsection (1) of this section applies and the deficiency, or any portion thereof, is attributable to any retroactive treatment for Oregon tax purposes given P.L. 98-369 or 99-121 under subsection (1) of this section, then any interest or penalty assessed under ORS chapter 305, 314 or 316 with respect to the deficiency or portion shall be canceled.

(b) If a refund is due any taxpayer for a tax year for which subsection (1) of this section applies and the refund or any portion thereof is due the taxpayer on account of any retroactive treatment given P.L. 98-369 or 99-121 for Oregon tax purposes under subsection (1) of this section, then notwithstanding ORS 314.415 or other law, the refund shall be paid without interest.

(3)(a)(A) At the election of the taxpayer and if the taxpayer is required to file an Oregon return for a tax year beginning in 1985, any changes required on account of subsection (1)(a) of this section for a tax year beginning prior to January 1, 1985, may be made either by filing an amended return or be made on a tax return filed for a tax year beginning in 1985 in the manner determined by the Department of Revenue by rule. An election made under this paragraph shall apply to all changes required on account of subsection (1)(a) of this section.

(B) Any changes required on account of subsection (1)(b) of this section for a tax year beginning prior to January 1, 1987, shall be made by filing an amended return within the time prescribed by law.

(b) Exercise of the election provided under paragraph (a)(A) of this subsection shall not operate to modify any election made on the return to which the change relates or on the return in which the change is made unless otherwise provided by the department by rule.

(c) For purposes of paragraph (a)(A) of this subsection, if a taxpayer is not required to file an Oregon return for a tax year beginning in 1985, the taxpayer shall reflect the change in an amended return for the tax year to which the change relates.

(d)(A) If a taxpayer fails to make an election under paragraph (a)(A) of this subsection, the department shall make any changes under paragraph (a)(A) of this subsection on the return to which the change or changes relate within the period as specified for assessing a deficiency or claiming a refund as otherwise provided by law with respect to that return, or within one year after a 1985 return is filed, whichever period expires later.

(B) If a taxpayer fails to file an amended return under paragraph (a)(B) of this subsection, the department shall make any changes under paragraph (a)(B) of this subsection on the return to which the change or changes relate within the period as specified for assessing a deficiency or claiming a refund as otherwise provided by law with respect to that return, or within one year after a 1987 return is filed, whichever period expires later. [Formerly 316.021]

Note: 314.029 was enacted into law by the Legislative Assembly but was not added to or made a part of ORS chapter 314 or any series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation.

314.030 [Repealed by 1953 c.310 §3]

314.031 Application of Deficit Reduction Act of 1984 (P.L. 98-369) and Simplification of Imputed Interest Rules of 1985 (P.L. 99-121) to corporate excise and income tax. (1)(a) Notwithstanding ORS 317.010, 317.013 and 317.018 (all 1983 Replacement Part), and subject to all other provisions of ORS chapters 317 and 318 in effect and applicable to transactions occurring on or after January 1, 1984, the Deficit Reduction Act of 1984 (P.L. 98-369) insofar as it applies to transactions occurring on or after January 1, 1984, shall apply to the same transactions for Oregon tax purposes.

(b) Notwithstanding ORS 317.010, 317.013 and 317.018 (all 1985 Replacement Part), and subject to all other provisions of ORS chapters 317 and 318 in effect and applicable to transactions occurring on or after January 1, 1985, the Act described as the Simplification of Imputed Interest Rules of 1985 (P.L. 99-121) insofar as it applies to transactions occurring on or after January 1, 1985, shall apply to the same transactions for Oregon tax purposes. The amendments by the Act described as the Simplification of Imputed Interest Rules of 1985 (P.L. 99-121) to section 168 of the Internal Revenue Code apply to property placed in service after May 8, 1985, but do not apply to property to which section 105 (b)(2) and (3) of the Act (P.L. 99-121) apply.

(2)(a) If a deficiency is assessed against any taxpayer for a tax year for which subsection (1) of this section applies and the deficiency, or any portion thereof, is attributable to any retroactive treatment for Oregon tax purposes given P.L. 98-369 or 99-121 under subsection (1) of this section, then any interest or penalty assessed under ORS chapter 305, 314, 317 or 318 with respect to the deficiency or portion shall be canceled.

Note: 314.031 was enacted into law by the Legislative Assembly but was not added to or made a part of ORS chapter 314 or any series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation.

314.032 [Repealed by 1953 c.310 §3]

314.033 Application of federal Tax Reform Act of 1986 (P.L. 99-514). (1) For purposes of subsections (2) to (15) of this section, “TRA” means the federal Tax Reform Act of 1986 (P.L. 99-514).

(2) Unless the context requires otherwise, the amendments, repeals and new matter contained in chapter 293, Oregon Laws 1987, apply generally to tax years beginning on or after January 1, 1987, or to transactions occurring on or after January 1, 1987, in tax years beginning on or after January 1, 1987. However, certain changes made by the federal Tax Reform Act of 1986 (P.L. 99-514) and adopted by the amendments to ORS 316.007, 316.012, 317.010, 317.013 and 317.018 by sections 1, 2 and 31 to 33, chapter 293, Oregon Laws 1987, apply for federal tax purposes as follows:

(a) To tax years beginning prior to January 1, 1987;

(b) To transactions occurring before, on or after December 31, 1986, in tax years ending after that date; or

(c) To transactions occurring prior to January 1, 1987, but with tax consequences for federal purposes only for tax years beginning after December 31, 1986.

(3) The changes described in subsection (2)(a) of this section, if otherwise applicable for Oregon tax purposes, shall apply to and are specifically adopted for tax years beginning prior to January 1, 1987.

(4) The changes described in subsection (2)(b) and (c) of this section if otherwise applicable for Oregon tax purposes, shall apply to and are specifically adopted for transactions occurring before, on or after December 31, 1986, in tax years ending after December 31, 1986, or beginning after December 31, 1986, whichever is applicable.

(5) The changes described in subsections (3) and (4) of this section are exemplified by, but are specifically not limited to the following:

(a) The amendments made by section 122 of the TRA (relating to charitable and employee achievement awards) which apply to prizes and awards granted after December 31, 1986.

(b) The amendments by section 123 of the TRA (relating to scholarships and fellowships) which apply to tax years beginning after December 31, 1986, but only in the case of scholarships and fellowships granted after August 16, 1986.

(c) The amendments to the Internal Revenue Code relating to depreciation and the expensing of certain depreciable business assets by sections 201 and 202 of the TRA which apply generally for property placed in service on or after January 1, 1987, in tax years ending on or after that date. However, if an election is made under section 203(a)(1)(B) of the TRA, that election shall be considered to be made for Oregon tax purposes. In addition, the transitional rules contained in sections 203 and 204 of the TRA shall apply for Oregon purposes to the extent they can be made applicable, in the same manner as for federal tax purposes.

(d) Section 611 of the TRA (reducing the dividends received deduction for corporations) which applies to dividends received or accrued after December 31, 1986, in tax years ending after that date. In conjunction with this paragraph, the amendments to ORS 317.267 by chapter 293, Oregon Laws 1987, apply to dividends received or accrued after December 31, 1986, in tax years ending after that date.

(e) Section 1103 of the TRA (relating to the deduction for a spousal IRA), which applies to tax years beginning before, on or after December 31, 1985.

(f) Section 1708(a) of the TRA (relating to Vietnam MIA’s) which applies to tax years beginning after December 31, 1982.

(6) If the TRA allows or requires an adjustment to the federal tax return filed for a tax year beginning prior to January 1, 1987, and such an adjustment is made, the adjustment (if adopted for Oregon tax purposes) shall also be made to the corresponding Oregon return notwithstanding any law or rule to the contrary, in the manner provided under ORS 314.135.

(7) If certain transactions are grandfathered by the TRA or the changes in the federal law made by the TRA are otherwise made inapplicable to those transactions, the same treatment shall be given those transactions for Oregon tax purposes unless otherwise provided under ORS chapter 316, 317, 318 or other law governing the determination of Oregon personal income and Oregon corporate excise and income taxes.

(8) Subsections (2) to (6) of this section do not apply to the amendments to ORS 316.021 and 317.021 by chapter 293, Oregon Laws 1987.

(9) Subsections (2) to (6) of this section do not apply to the amendments to ORS 267.380, 307.380 and 310.630 made by sections 65, 66 and 69, chapter 293, Oregon Laws 1987.

(10) The amendments to ORS 310.630 by section 66, chapter 293, Oregon Laws 1987, apply to property taxes billed or rent constituting property taxes paid in calendar years beginning on or after January 1, 1987.

(11) Subsections (2) to (6) of this section do not apply to the amendments creating a new paragraph (c) of subsection (3) of ORS 316.680. The amendments to ORS 316.680 by section 23, chapter 293, Oregon Laws 1987, creating a new paragraph (c) of subsection (3) of ORS 316.680 apply to tax years beginning on or after January 1, 1986.

(12) ORS 316.588 and the amendments to ORS 314.525, 316.579 and 316.587 by sections 22, 22a and 61a, chapter 293, Oregon Laws 1987, first apply to estimated tax payments due for tax years beginning on or after January 1, 1988.

(13) ORS 316.683 first applies to distributions made by regulated investment companies or fiduciaries, including banks, savings associations or credit unions, to the taxpayer for taxable years of the taxpayer beginning on or after January 1, 1987.

(14) Subsections (2) to (6) of this section do not apply to the amendments to ORS 314.385 and 314.395 by sections 59a and 59b, chapter 293, Oregon Laws 1987. The amendments to ORS 314.385 and 314.395 by sections 59a and 59b, chapter 293, Oregon Laws 1987, apply to tax years beginning on or after January 1, 1988.

(15) The amendments to ORS 317.476 by section 45d, chapter 293, Oregon Laws 1987, first apply to losses occurring in tax years beginning on or after January 1, 1987. [Formerly 316.023; 1997 c.99 §17]

Note: 314.033, 314.035, 314.037, 314.039 and 314.041 were enacted into law by the Legislative Assembly but were not added to or made a part of ORS chapter 314 or any series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation.

Note: Legislative Counsel has substituted “chapter 293, Oregon Laws 1987,” for the words “this Act” in sections 71, 72 and 73, chapter 293, Oregon Laws 1987, compiled as 316.023 and renumbered 314.033 in 1993. Specific ORS references have not been substituted, pursuant to 173.160. These sections may be determined by referring to the 1987 Comparative Section Table located in Volume 20 of ORS.

314.034 [Repealed by 1953 c.310 §3]

314.035 Application of Omnibus Budget Reconciliation Act of 1987 (P.L. 100-203), Family Support Act of 1988 (P.L. 100-485) and Technical and Miscellaneous Revenue Act of 1988 (P.L. 100-647). (1) Except as provided in subsections (2) to (4) of this section and sections 83 to 92, chapter 625, Oregon Laws 1989, the amendments by chapter 625, Oregon Laws 1989, apply to transactions or activities occurring on or after January 1, 1989, in tax years beginning on or after January 1, 1989.

(2) The effective and applicable dates, and the exceptions, special rules and coordination with the Internal Revenue Code, as amended by the Tax Reform Act of 1986 (P.L. 99-514) and other Acts, relative to those dates, contained in the Omnibus Budget Reconciliation Act of 1987 (P.L. 100-203) shall apply for Oregon personal income and corporate excise and income tax purposes, to the extent they can be made applicable, in the same manner as they are applied under the federal Internal Revenue Code and related federal law.

(3) The effective and applicable dates, and the exceptions, special rules and coordination with the Internal Revenue Code, as amended by the Tax Reform Act of 1986 (P.L. 99-514) and other Acts, relative to those dates, contained in the Family Support Act of 1988 (P.L. 100-485) shall apply for Oregon personal income and corporate excise and income tax purposes, to the extent they can be made applicable, in the same manner as they are applied under the federal Internal Revenue Code and related federal law.

(4) The effective and applicable dates, and the exceptions, special rules and coordination with the Internal Revenue Code, as amended by the Tax Reform Act of 1986 (P.L. 99-514) and other Acts, relative to those dates, contained in the Technical and Miscellaneous Revenue Act of 1988 (P.L. 100-647) shall apply for Oregon personal income and corporate excise and income tax purposes, to the extent they can be made applicable, in the same manner as they are applied under the federal Internal Revenue Code and related federal law.

(5)(a) If a deficiency is assessed against any taxpayer for a tax year beginning before January 1, 1989, and the deficiency, or any portion thereof, is attributable to any retroactive treatment under chapter 625, Oregon Laws 1989, then any interest or penalty assessed under ORS chapter 305, 314, 316, 317 or 318 with respect to the deficiency or portion thereof shall be canceled.

(b) If a refund is due any taxpayer for a tax year beginning before January 1, 1989, and the refund or any portion thereof is due the taxpayer on account of any retroactive treatment under chapter 625, Oregon Laws 1989, then notwithstanding ORS 314.415 or other law, the refund shall be paid without interest.

(c) Any changes required on account of chapter 625, Oregon Laws 1989, for a tax year beginning prior to January 1, 1989, shall be made by filing an amended return within the time prescribed by law.

(d) If a taxpayer fails to file an amended return under paragraph (c) of this subsection, the Department of Revenue shall make any changes under paragraph (c) of this subsection on the return to which the change or changes relate within the period as specified for issuing a notice of deficiency or claiming a refund as otherwise provided by law with respect to that return, or within one year after a 1989 return is filed, whichever period expires later. [1989 c.625 §82]

Note: See first note under 314.033.

Note: Legislative Counsel has substituted “chapter 625, Oregon Laws 1989,” for the words “this Act” in section 82, chapter 625, Oregon Laws 1989, compiled as 314.035. Specific ORS references have not been substituted, pursuant to 173.160. These sections may be determined by referring to the 1989 Comparative Section Table located in Volume 20 of ORS.

314.036 [Repealed by 1953 c.310 §3]

314.037 Application of P.L. 101-140, Omnibus Budget Reconciliation Act of 1989 (P.L. 101-239) and Omnibus Budget Reconciliation Act of 1991 (P.L. 101-508). (1) Except as provided in subsection (2) of this section and sections 25a to 32, chapter 457, Oregon Laws 1991, the new material and amendments by chapter 457, Oregon Laws 1991, apply to transactions or activities occurring on or after January 1, 1991, in tax years beginning on or after January 1, 1991.

(2) The effective and applicable dates, and the exceptions, special rules and coordination with the Internal Revenue Code, as amended, relative to those dates, contained in P.L. 101-140, the Omnibus Budget Reconciliation Act of 1989 (P.L. 101-239) and the Omnibus Budget Reconciliation Act of 1990 (P.L. 101-508) shall apply for Oregon personal income and corporate excise and income tax purposes, to the extent they can be made applicable, in the same manner as they are applied under the federal Internal Revenue Code and related federal law.

(3)(a) If a deficiency is assessed against any taxpayer for a tax year beginning before January 1, 1991, and the deficiency, or any portion thereof, is attributable to any retroactive treatment under chapter 457, Oregon Laws 1991, then any interest or penalty assessed under ORS chapter 305, 314, 316, 317 or 318 with respect to the deficiency or portion thereof shall be canceled.

(b) If a refund is due any taxpayer for a tax year beginning before January 1, 1991, and the refund or any portion thereof is due the taxpayer on account of any retroactive treatment under chapter 457, Oregon Laws 1991, then notwithstanding ORS 314.415 or other law, the refund or portion thereof shall be paid without interest.

(c) Any changes required on account of chapter 457, Oregon Laws, 1991, for a tax year beginning prior to January 1, 1991, shall be made by filing an amended return within the time prescribed by law.

(d) If a taxpayer fails to file an amended return under paragraph (c) of this subsection, the Department of Revenue shall make any changes under paragraph (c) of this subsection on the return to which the change or changes relate within the period as specified for issuing a notice of deficiency or claiming a refund as otherwise provided by law with respect to that return, or within one year after a 1991 return is filed, whichever period expires later. [1991 c.457 §25]

Note: See first note under 314.033.

Note: Legislative Counsel has substituted “chapter 457, Oregon Laws 1991,” for the words “this Act” in section 25, chapter 457, Oregon Laws 1991, compiled as 314.037. Specific ORS references have not been substituted, pursuant to 173.160. These sections may be determined by referring to the 1991 Comparative Section Table located in Volume 20 of ORS.

314.038 [Repealed by 1953 c.310 §3]

314.039 Application of P.L. 102-2, Comprehensive National Energy Policy Act of 1992 (P.L. 102-486), Unemployment Compensation Amendments of 1992 (P.L. 102-318), Tax Extension Act of 1991 (P.L. 102-227) and Emergency Unemployment Compensation Act of 1991 (P.L. 102-164). (1) Except as specifically provided otherwise, the new material enacted, amendments and repeals made by chapter 726, Oregon Laws 1993, apply to transactions or activities occurring on or after January 1, 1993, in tax years beginning on or after January 1, 1993.

(2) The effective and applicable dates, and the exceptions, special rules and coordination with the Internal Revenue Code, as amended, relative to those dates, contained in P.L. 102-2, the Comprehensive National Energy Policy Act of 1992 (P.L. 102-486), the Unemployment Compensation Amendments of 1992 (P.L. 102-318), the Tax Extension Act of 1991 (P.L. 102-227) and the Emergency Unemployment Compensation Act of 1991 (P.L. 102-164) shall apply for Oregon personal income and corporate excise and income tax purposes, to the extent they can be made applicable, in the same manner as they are applied under the federal Internal Revenue Code and related federal law.

(3)(a) If a deficiency is assessed against any taxpayer for a tax year beginning before January 1, 1993, and the deficiency, or any portion thereof, is attributable to any retroactive treatment under chapter 726, Oregon Laws 1993, then any interest or penalty assessed under ORS chapter 305, 314, 316, 317 or 318 with respect to the deficiency or portion thereof shall be canceled.

(b) If a refund is due any taxpayer for a tax year beginning before January 1, 1993, and the refund or any portion thereof is due the taxpayer on account of any retroactive treatment under chapter 726, Oregon Laws 1993, then notwithstanding ORS 314.415 or other law, the refund or portion thereof shall be paid without interest.

(c) Any changes required on account of chapter 726, Oregon Laws 1993, for a tax year beginning prior to January 1, 1993, shall be made by filing an amended return within the time prescribed by law.

(d) If a taxpayer fails to file an amended return under paragraph (c) of this subsection, the Department of Revenue shall make any changes under paragraph (c) of this subsection on the return to which the change or changes relate within the period as specified for issuing a notice of deficiency or claiming a refund as otherwise provided by law with respect to that return, or within one year after a 1993 return is filed, whichever period expires later. [1993 c.726 §53]

Note: See first note under 314.033.

Note: Legislative Counsel has substituted “chapter 726, Oregon Laws 1993,” for the words “this Act” in section 53, chapter 726, Oregon Laws 1993, compiled as 314.039. Specific ORS references have not been substituted, pursuant to 173.160. These sections may be determined by referring to the 1993 Comparative Section Table located in Volume 20 of ORS.

314.040 [Repealed by 1953 c.310 §3]

314.041 Application of Revenue Reconciliation Act of 1993 (P.L. 103-66), the Uruguay Round Agreements Act (P.L. 103-465) and P.L. 104-7. (1) Except as provided in subsection (2) of this section, ORS 314.304 and sections 7, 7a, 28, 38 and 40, chapter 556, Oregon Laws 1995, the new material enacted and amendments and repeals made by chapter 556, Oregon Laws 1995, apply to transactions or activities occurring on or after January 1, 1995, in tax years beginning on or after January 1, 1995.

(2) The effective and applicable dates, and the exceptions, special rules and coordination with the Internal Revenue Code, as amended, relative to those dates, contained in the Revenue Reconciliation Act of 1993 (P.L. 103-66), the Uruguay Round Agreements Act (P.L. 103-465) or P.L. 104-7 shall apply for Oregon personal income and corporate excise and income tax purposes, to the extent they can be made applicable, in the same manner as they are applied under the federal Internal Revenue Code and related federal law.

(3)(a) If a deficiency is assessed against any taxpayer for a tax year beginning before January 1, 1995, and the deficiency, or any portion thereof, is attributable to any retroactive treatment under chapter 556, Oregon Laws 1995, then any interest or penalty assessed under ORS chapter 305, 314, 315, 316, 317 or 318 with respect to the deficiency or portion thereof shall be canceled.

(b) If a refund is due any taxpayer for a tax year beginning before January 1, 1995, and the refund or any portion thereof is due the taxpayer on account of any retroactive treatment under chapter 556, Oregon Laws 1995, then notwithstanding ORS 314.415 or other law, the refund or portion thereof shall be paid without interest.

(c) Any changes required on account of chapter 556, Oregon Laws 1995, for a tax year beginning before January 1, 1995, shall be made by filing an amended return within the time prescribed by law.

(d) If a taxpayer fails to file an amended return under paragraph (c) of this subsection, the Department of Revenue shall make any changes under paragraph (c) of this subsection on the return to which the change or changes relate within the period specified for issuing a notice of deficiency or claiming a refund as otherwise provided by law with respect to that return, or within one year after a 1995 return is filed, whichever period expires later. [1995 c.556 §39]

Note: See first note under 314.033.

Note: 314.304 was repealed by section 34, chapter 21, Oregon Laws 1999. The text of 314.041 was not amended by enactment of the Legislative Assembly to reflect the repeal. Editorial adjustment of 314.041 for the repeal of 314.304 has not been made.

Note: Legislative Counsel has substituted “chapter 556, Oregon Laws 1995,” for the words “this Act” in section 39, chapter 556, Oregon Laws 1995, compiled as 314.041. Specific ORS references have not been substituted pursuant to 173.160. These sections may be determined by referring to the 1995 Comparative Section Table located in Volume 20 of ORS.

314.042 [Repealed by 1953 c.310 §3]

314.043 Application of ICC Termination Act of 1995 (P.L. 104-88), P.L. 104-117, Omnibus Consolidated Rescissions and Appropriations Act of 1996 (P.L. 104-134), Small Business Job Protection Act of 1996 (P.L. 104-188), Health Insurance Portability and Accountability Act of 1996 (P.L. 104-191) and Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (P.L. 104-193). (1) Except as specifically provided otherwise, the new provisions enacted and amendments and repeals of statutes made by chapter 839, Oregon Laws 1997, apply to transactions or activities occurring on or after January 1, 1997, in tax years beginning on or after January 1, 1997.

(2) The effective and applicable dates, and the exceptions, special rules and coordination with the Internal Revenue Code, as amended, relative to those dates, contained in the ICC Termination Act of 1995 (P.L. 104-88), P.L. 104-117, the Omnibus Consolidated Rescissions and Appropriations Act of 1996 (P.L. 104-134), the Small Business Job Protection Act of 1996 (P.L. 104-188), the Health Insurance Portability and Accountability Act of 1996 (P.L. 104-191) and the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (P.L. 104-193), shall apply for Oregon personal income and corporate excise and income tax purposes, to the extent they can be made applicable, in the same manner as they are applied under the federal Internal Revenue Code and related federal law.

(3)(a) If a deficiency is assessed against any taxpayer for a tax year beginning before January 1, 1997, and the deficiency, or any portion thereof, is attributable to any retroactive treatment under chapter 839, Oregon Laws 1997, then any interest or penalty assessed under ORS chapter 305, 314, 315, 316, 317 or 318 with respect to the deficiency or portion thereof shall be canceled.

(b) If a refund is due any taxpayer for a tax year beginning before January 1, 1997, and the refund or any portion thereof is due the taxpayer on account of any retroactive treatment under chapter 839, Oregon Laws 1997, then notwithstanding ORS 305.270 or 314.415 or other law, the refund or portion thereof shall be paid without interest.

(c) Any changes required on account of chapter 839, Oregon Laws 1997, for a tax year beginning prior to January 1, 1997, shall be made by filing an amended return within the time prescribed by law.

(d) If a taxpayer fails to file an amended return under paragraph (c) of this subsection, the Department of Revenue shall make any changes under paragraph (c) of this subsection on the return to which the change or changes relate within the period specified for issuing a notice of deficiency or claiming a refund as otherwise provided by law with respect to that return, or within one year after a 1997 return is filed, whichever period expires later. [1997 c.839 §70; 1999 c.21 §32]

Note: 314.043 was enacted into law by the Legislative Assembly but was not added to or made a part of ORS chapter 314 or any series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation.

Note: Legislative Counsel has substituted “chapter 839, Oregon Laws 1997,” for the words “this Act” in section 70, chapter 839, Oregon Laws 1997, compiled as 314.043. Specific ORS references have not been substituted, pursuant to 173.160. The sections for which substitution otherwise would be made may be determined by referring to the 1997 Comparative Section Table located in Volume 20 of ORS.

314.044 [Repealed by 1953 c.310 §3]

314.045 Application of Taxpayer Relief Act of 1997 (P.L. 105-34), Taxpayer Browsing Protection Act (P.L. 105-35), Balanced Budget Act of 1997 (P.L. 105-33), Internal Revenue Service Restructuring and Reform Act of 1998 (P.L. 105-206), Transportation Equity Act for the 21st Century (P.L. 105-178) and Tax and Trade Relief Extension Act of 1998 (P.L. 105-277). (1) Except as specifically provided in sections 4, 4b, 20 and 25b, chapter 90, Oregon Laws 1999, the new provisions enacted and amendments to statutes made by chapter 90, Oregon Laws 1999, apply to transactions or activities occurring on or after January 1, 1999, in tax years beginning on or after January 1, 1999.

(2) The effective and applicable dates, and the exceptions, special rules and coordination with the Internal Revenue Code, as amended, relative to those dates, contained in the Taxpayer Relief Act of 1997 (P.L. 105-34), the Taxpayer Browsing Protection Act (P.L. 105-35), the Balanced Budget Act of 1997 (P.L. 105-33), the Internal Revenue Service Restructuring and Reform Act of 1998 (P.L. 105-206), the Transportation Equity Act for the 21st Century (P.L. 105-178) and the Tax and Trade Relief Extension Act of 1998 (P.L. 105-277) shall apply for Oregon personal income and corporate excise and income tax purposes, to the extent they can be made applicable, in the same manner as they are applied under the federal Internal Revenue Code and related federal law.

(3)(a) If a deficiency is assessed against any taxpayer for a tax year beginning before January 1, 1999, and the deficiency, or any portion thereof, is attributable to any retroactive treatment under chapter 90, Oregon Laws 1999, then any interest or penalty assessed under ORS chapter 305, 314, 315, 316, 317 or 318 with respect to the deficiency or portion thereof shall be canceled.

(b) If a refund is due any taxpayer for a tax year beginning before January 1, 1999, and the refund or any portion thereof is due the taxpayer on account of any retroactive treatment under chapter 90, Oregon Laws 1999, then notwithstanding ORS 305.270 or 314.415 or other law, the refund or portion thereof shall be paid without interest.

(c) Any changes required on account of chapter 90, Oregon Laws 1999, for a tax year beginning before January 1, 1999, shall be made by filing an amended return within the time prescribed by law.

(d) If a taxpayer fails to file an amended return under paragraph (c) of this subsection, the Department of Revenue shall make any changes under paragraph (c) of this subsection on the return to which the changes relate within the period specified for issuing a notice of deficiency or claiming a refund as otherwise provided by law with respect to that return, or within one year after a return for a tax year beginning on or after January 1, 1999, and before January 1, 2000, is filed, whichever period expires later. [1999 c.90 §37]

Note: 314.045 was enacted into law by the Legislative Assembly but was not added to or made a part of ORS chapter 314 or any series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation.

Note: Legislative Counsel has substituted “chapter 90, Oregon Laws 1999,” for the words “this 1999 Act” in section 37, chapter 90, Oregon Laws 1999, compiled as 314.045. Specific ORS references have not been substituted, pursuant to 173.160. The sections for which substitution otherwise would be made may be determined by referring to the 1999 Comparative Section Table located in Volume 20 of ORS.

314.046 [Repealed by 1953 c.310 §3]

314.047 Application of Tax Relief Extension Act of 1999 (P.L. 106-170) and FSC Repeal and Extraterritorial Income Exclusion Act of 2000 (P.L. 106-519). (1) The amendments to statutes by sections 23 to 52, chapter 660, Oregon Laws 2001, apply to transactions or activities occurring on or after January 1, 2001, in tax years beginning on or after January 1, 2001.

(2) The effective and applicable dates, and the exceptions, special rules and coordination with the Internal Revenue Code, as amended, relative to those dates, contained in the Tax Relief Extension Act of 1999 (P.L. 106-170) and the FSC Repeal and Extraterritorial Income Exclusion Act of 2000 (P.L. 106-519), apply for Oregon personal income and corporate excise and income tax purposes, to the extent they can be made applicable, in the same manner as they are applied under the Internal Revenue Code and related federal law.

(3)(a) If a deficiency is assessed against any taxpayer for a tax year beginning before January 1, 2001, and the deficiency, or any portion thereof, is attributable to any retroactive treatment under the amendments to statutes by sections 23 to 52, chapter 660, Oregon Laws 2001, then any interest or penalty assessed under ORS chapter 305, 314, 315, 316, 317 or 318 with respect to the deficiency or portion thereof shall be canceled.

(b) If a refund is due any taxpayer for a tax year beginning before January 1, 2001, and the refund or any portion thereof is due the taxpayer on account of any retroactive treatment under the amendments to statutes by sections 23 to 52, chapter 660, Oregon Laws 2001, then notwithstanding ORS 305.270 or 314.415 or other law, the refund or portion thereof shall be paid without interest.

(c) Any changes required on account of the amendments to statutes by sections 23 to 52, chapter 660, Oregon Laws 2001, for a tax year beginning before January 1, 2001, shall be made by filing an amended return within the time prescribed by law.

(d) If a taxpayer fails to file an amended return under paragraph (c) of this subsection, the Department of Revenue shall make any changes under paragraph (c) of this subsection on the return to which the changes relate within the period specified for issuing a notice of deficiency or claiming a refund as otherwise provided by law with respect to that return, or within one year after a return for a tax year beginning on or after January 1, 2001, and before January 1, 2002, is filed, whichever period expires later. [2001 c.660 §53]

Note: 314.047 was enacted into law by the Legislative Assembly but was not added to or made a part of ORS chapter 314 or any series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation.

Note: Legislative Counsel has substituted “chapter 660, Oregon Laws 2001,” for the words “of this 2001 Act” in section 53, chapter 660, Oregon Laws 2001, compiled as 314.047. Specific ORS references have not been substituted, pursuant to 173.160. The sections for which substitution otherwise would be made may be determined by referring to the 2001 Comparative Section Table located in Volume 20 of ORS.

314.048 [Repealed by 1953 c.310 §3]

314.049 Application of Economic Growth and Tax Relief Reconciliation Act of 2001 (P.L. 107-16) and Job Creation and Worker Assistance Act of 2002 (P.L. 107-147). (1) The amendments to statutes by sections 1 to 22, chapter 77, Oregon Laws 2003, apply to transactions or activities occurring on or after January 1, 2003, in tax years beginning on or after January 1, 2003.

(2) The effective and applicable dates, and the exceptions, special rules and coordination with the Internal Revenue Code, as amended, relative to those dates, contained in the Economic Growth and Tax Relief Reconciliation Act of 2001 (P.L. 107-16) and the Job Creation and Worker Assistance Act of 2002 (P.L. 107-147) apply for Oregon personal income and corporate excise and income tax purposes, to the extent they can be made applicable, in the same manner as they are applied under the Internal Revenue Code and related federal law.

(3)(a) If a deficiency is assessed against any taxpayer for a tax year beginning before January 1, 2003, and the deficiency, or any portion thereof, is attributable to any retroactive treatment under the amendments to statutes by sections 1 to 22, chapter 77, Oregon Laws 2003, then any interest or penalty assessed under ORS chapter 305, 314, 315, 316, 317 or 318 with respect to the deficiency or portion thereof shall be canceled.

(b) If a refund is due any taxpayer for a tax year beginning before January 1, 2003, and the refund or any portion thereof is due the taxpayer on account of any retroactive treatment under the amendments to statutes by sections 1 to 22, chapter 77, Oregon Laws 2003, then notwithstanding ORS 305.270 or 314.415 or other law, the refund or portion thereof shall be paid without interest.

(c) Any changes required because of the amendments to statutes by sections 1 to 22, chapter 77, Oregon Laws 2003, for a tax year beginning before January 1, 2003, shall be made by filing an amended return within the time prescribed by law.

(d) If a taxpayer fails to file an amended return under paragraph (c) of this subsection, the Department of Revenue shall make any changes under paragraph (c) of this subsection on the return to which the changes relate within the period specified for issuing a notice of deficiency or claiming a refund as otherwise provided by law with respect to that return, or within one year after a return for a tax year beginning on or after January 1, 2003, and before January 1, 2004, is filed, whichever period expires later. [2003 c.77 §23]

Note: 314.049 was enacted into law by the Legislative Assembly but was not added to or made a part of ORS chapter 314 or any series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation.

Note: Legislative Counsel has substituted “chapter 77, Oregon Laws 2003,” for the words “this 2003 Act” in section 23, chapter 77, Oregon Laws 2003, compiled as 314.049. Specific ORS references have not been substituted, pursuant to 173.160. The sections for which substitution otherwise would be made may be determined by referring to the 2003 Comparative Section Table located in Volume 20 of ORS.

314.050 [Repealed by 1953 c.310 §3]

314.051 Application of Veterans Benefit Act of 2002 (P.L. 107-330), Jobs and Growth Tax Relief Reconciliation Act of 2003 (P.L. 108-27), Military Family Tax Relief Act of 2003 (P.L. 108-121), Working Families Tax Relief Act of 2004 (P.L. 108-311) and American Jobs Creation Act of 2004 (P.L. 108-357). (1) Except as provided in subsections (2) and (3) of this section, ORS 316.821 and the amendments to statutes by sections 13 to 28 and 31, chapter 832, Oregon Laws 2005, apply to transactions or activities occurring on or after January 1, 2005, in tax years beginning on or after January 1, 2005.

(2) The effective and applicable dates, and the exceptions, special rules and coordination with the Internal Revenue Code, as amended, relative to those dates, contained in the Veterans Benefits Act of 2002 (P.L. 107-330), the Jobs and Growth Tax Relief Reconciliation Act of 2003 (P.L. 108-27), the Military Family Tax Relief Act of 2003 (P.L. 108-121), the Working Families Tax Relief Act of 2004 (P.L. 108-311), the American Jobs Creation Act of 2004 (P.L. 108-357) and other federal law amending the Internal Revenue Code apply for Oregon personal income and corporate excise and income tax purposes, to the extent they can be made applicable, in the same manner as they are applied under the Internal Revenue Code and related federal law.

(3)(a) If a deficiency is assessed against any taxpayer for a tax year beginning before January 1, 2005, and the deficiency or any portion thereof is attributable to any retroactive treatment under ORS 316.821 and the amendments to statutes by sections 13 to 28 and 31, chapter 832, Oregon Laws 2005, then any interest or penalty assessed under ORS chapter 305, 314, 315, 316, 317 or 318 with respect to the deficiency or portion thereof shall be canceled.

(b) If a refund is due any taxpayer for a tax year beginning before January 1, 2005, and the refund or any portion thereof is due the taxpayer on account of any retroactive treatment under ORS 316.821 and the amendments to statutes by sections 13 to 28 and 31, chapter 832, Oregon Laws 2005, then notwithstanding ORS 305.270 or 314.415 or other law, the refund or portion thereof shall be paid without interest.

(c) Any changes required because of ORS 316.821 and the amendments to statutes by sections 13 to 28 and 31, chapter 832, Oregon Laws 2005, for a tax year beginning before January 1, 2005, shall be made by filing an amended return within the time prescribed by law.

(d) If a taxpayer fails to file an amended return under paragraph (c) of this subsection, the Department of Revenue shall make any changes under paragraph (c) of this subsection on the return to which the changes relate within the period specified for issuing a notice of deficiency or claiming a refund as otherwise provided by law with respect to that return, or within one year after a return for a tax year beginning on or after January 1, 2005, and before January 1, 2006, is filed, whichever period expires later. [2005 c.832 §32]

Note: 314.051 was enacted into law by the Legislative Assembly but was not added to or made a part of ORS chapter 314 or any series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation.

Note: Legislative Counsel has substituted “chapter 832, Oregon Laws 2005,” for the words “this 2005 Act” in section 32, chapter 832, Oregon Laws 2005, compiled as 314.051. Specific ORS references have not been substituted, pursuant to 173.160. The sections for which substitution otherwise would be made may be determined by referring to the 2005 Comparative Section Table located in Volume 20 of ORS.

314.052 [Repealed by 1953 c.310 §3]

314.053 Application of Deficit Reduction Act of 2005 (P.L. 109-171), Tax Increase Prevention and Reconciliation Act of 2005 (P.L. 109-222) and Pension Protection Act of 2006 (P.L. 109-280). (1) Except as provided in subsections (2) and (3) of this section, the amendments to statutes by sections 1 to 14, chapter 614, Oregon Laws 2007, apply to transactions or activities occurring on or after January 1, 2007, in tax years beginning on or after January 1, 2007.

(2) The effective and applicable dates, and the exceptions, special rules and coordination with the Internal Revenue Code, as amended, relative to those dates, contained in the Deficit Reduction Act of 2005 (P.L. 109-171), the Tax Increase Prevention and Reconciliation Act of 2005 (P.L. 109-222), the Pension Protection Act of 2006 (P.L. 109-280) and other federal law amending the Internal Revenue Code apply for Oregon personal income and corporate excise and income tax purposes, to the extent they can be made applicable, in the same manner as they are applied under the Internal Revenue Code and related federal law.

(3)(a) If a deficiency is assessed against any taxpayer for a tax year beginning before January 1, 2007, and the deficiency or any portion thereof is attributable to any retroactive treatment under the amendments to statutes by sections 1 to 14, chapter 614, Oregon Laws 2007, then any interest or penalty assessed under ORS chapter 305, 314, 315, 316, 317 or 318 with respect to the deficiency or portion thereof shall be canceled.

(b) If a refund is due any taxpayer for a tax year beginning before January 1, 2007, and the refund or any portion thereof is due the taxpayer on account of any retroactive treatment under the amendments to statutes by sections 1 to 14, chapter 614, Oregon Laws 2007, then notwithstanding ORS 305.270 or 314.415 or other law, the refund or portion thereof shall be paid without interest.

(c) Any changes required because of the amendments to statutes by sections 1 to 14, chapter 614, Oregon Laws 2007, for a tax year beginning before January 1, 2007, shall be made by filing an amended return within the time prescribed by law.

(d) If a taxpayer fails to file an amended return under paragraph (c) of this subsection, the Department of Revenue shall make any changes under paragraph (c) of this subsection on the return to which the changes relate within the period specified for issuing a notice of deficiency or claiming a refund as otherwise provided by law with respect to that return, or within one year after a return for a tax year beginning on or after January 1, 2007, and before January 1, 2008, is filed, whichever period expires later. [2007 c.614 §15]

Note: 314.053 was enacted into law by the Legislative Assembly but was not added to or made a part of ORS chapter 314 or any series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation.

Note: Legislative Counsel has substituted “chapter 614, Oregon Laws 2007,” for the words “this 2007 Act” in section 15, chapter 614, Oregon Laws 2007, compiled as 314.053. Specific ORS references have not been substituted, pursuant to 173.160. The sections for which substitution otherwise would be made may be determined by referring to the 2007 Comparative Section Table located in Volume 20 of ORS.

314.054 [Repealed by 1953 c.310 §3]

314.056 [Repealed by 1953 c.310 §3]

314.058 [Repealed by 1953 c.310 §3]

314.060 [Repealed by 1953 c.310 §3]

314.062 [Repealed by 1953 c.310 §3]

314.064 [Repealed by 1953 c.310 §3]

314.066 [Repealed by 1953 c.310 §3]

314.068 [Repealed by 1953 c.310 §3]

314.070 [Repealed by 1953 c.310 §3]

314.072 [Repealed by 1953 c.310 §3]

314.074 [Repealed by 1953 c.310 §3]

314.075 Evading requirements of law prohibited. No person, or officer or employee of a corporation or a member or employee of a partnership, shall, with intent to evade any requirement of any law imposing taxes upon or measured by net income or any lawful requirement of the Department of Revenue thereunder:

(1) Fail to pay any tax or to make, sign or verify any return or to supply any information required;

(2) Make, render, sign or verify any false or fraudulent return or statement; or

(3) Supply any false or fraudulent information. [1957 c.632 §3 (enacted in lieu of 316.025, 316.030, 317.015 and 317.020)]

314.078 Determination of tax credit amounts. For purposes of this chapter and ORS chapters 315, 316, 317 and 318, a taxpayer claiming a credit against tax must claim the maximum amount of any tax credit that is allowed to the taxpayer for the tax year, to the extent of the tax liability of the taxpayer. [2001 c.8 §2]

314.080 Venue on failure to comply with law. The failure to do any act required by or under any law imposing taxes upon or measured by net income shall be deemed an act committed in part at the office of the Department of Revenue in Oregon. [1957 c.632 §3 (enacted in lieu of 316.025, 316.030, 317.015 and 317.020)]

314.085 Taxable year; rules. (1) The taxable year of a partnership, REMIC (real estate mortgage investment conduit), FASIT (financial asset securitization investment trust) or taxpayer shall be the same as its taxable year for federal income tax purposes.

(2) If the taxable year of a partnership, REMIC, FASIT or taxpayer is changed for federal income tax purposes, that change in taxable year shall also apply for purposes of state taxation. If a change in taxable year results in a taxable period of less than 12 months, the personal deductions and the personal exemption credits allowed by ORS chapter 316 shall be prorated under rules adopted by the Department of Revenue.

(3) Notwithstanding subsections (1) and (2) of this section, if the department terminates the taxable year of a taxpayer under ORS 314.440, the tax shall be computed for the period determined by such action. [1987 c.293 §55; 1997 c.839 §52]

314.088 Discharge of tax liability when taxpayer dies while performing military service. (1) This section applies to a taxpayer who was a member of the Armed Forces of the United States who was on active duty for 90 consecutive days or more or who was a member of the Oregon National Guard, the military reserve forces or the organized militia of any other state or territory of the United States who performed service in a status under Title 10 of the United States Code for a period of 90 consecutive days or more, and who died during the performance of that service.

(2) If a taxpayer described in subsection (1) of this section had a tax liability for a tax due under ORS chapter 316, the tax liability, and all interest and penalties associated with any unpaid portion of the tax liability, shall be discharged and shall be deemed wholly satisfied for the taxpayer. [2005 c.519 §2]

Note: Sections 3 and 4, chapter 519, Oregon Laws 2005, provide:

Sec. 3. Section 2 of this 2005 Act [314.088] applies to deaths of taxpayers described in section 2 of this 2005 Act that occurred on or after September 11, 2001. [2005 c.519 §3]

Sec. 4. Notwithstanding ORS 314.415 or any other law limiting the period for which a claim for refund of taxes may be made, the liability discharged under section 2 of this 2005 Act [314.088] may be allowed if filed on or before December 31, 2006. [2005 c.519 §4]

314.091 Abeyance of tax during periods of active duty military service. (1) This section applies to a taxpayer who is a member of the Armed Forces of the United States who is on active duty for 90 consecutive days or more or who is a member of the Oregon National Guard, the military reserve forces or the organized militia of any other state or territory of the United States who performs service in a status under Title 10 of the United States Code for a period of 90 consecutive days or more.

(2) If a taxpayer described in subsection (1) of this section has an unpaid tax liability for a tax due under ORS chapter 316 that arose during a period in which service is performed as described in subsection (1) of this section, the unpaid tax liability, and all interest and penalties associated with the unpaid tax liability, shall be held in abeyance until a date that is six months after the date that the taxpayer’s active duty or status under Title 10 of the United States Code ceases. [2005 c.519 §6]

Note: Section 7, chapter 519, Oregon Laws 2005, provides:

Sec. 7. Section 6 of this 2005 Act [314.091] applies to unpaid tax liability of taxpayers described in section 6 of this 2005 Act that was incurred during periods of military service that occurred on or after September 11, 2001. [2005 c.519 §7]

ADJUSTMENT OF RETURNS

314.105 Definitions for ORS 314.105 to 314.135. For purposes of ORS 314.105 to 314.135:

(1) “Determination” means:

(a) A decision by the Oregon Tax Court that has become final;

(b) A closing agreement made under ORS 305.150;

(c) A final disposition by the Department of Revenue of a claim for refund. For purposes of this paragraph, a claim for refund shall be deemed finally disposed of by the department as to items with respect to which the claim was allowed, on the date of allowance of refund or credit or on the date of mailing notice of disallowance (by reason of offsetting items) of the claim for refund, and as to items with respect to which the claim was disallowed, in whole or in part, or as to items applied by the department in reduction of the refund or credit, on expiration of the time for instituting suit with respect thereto (unless suit is instituted before the expiration of such time); or

(d) Under regulations prescribed by the department, an agreement for purposes of ORS 314.105 to 314.135 signed by the department and by any person, relating to the liability of such person (or the person for whom the person acts) in respect of a tax for any taxable period.

(2) “Related taxpayer” means a taxpayer who, with the taxpayer with respect to whom a determination is made, stood, in the taxable year with respect to which the erroneous inclusion, exclusion, omission, allowance, or disallowance was made, in one of the following relationships:

(a) Husband and wife;

(b) Grantor and fiduciary;

(d) Fiduciary and beneficiary, legatee, or heir;

(e) Decedent and decedent’s estate;

(f) Partner;

(g) Member of an affiliated group of corporations as defined in section 1504 of the Internal Revenue Code; or

(h) Shareholder of an S corporation, as defined in section 1361 of the Internal Revenue Code.

(3) “Taxpayer” means any person or entity subject to tax under an applicable revenue law. [1971 c.248 §2; 1984 c.1 §15; 1985 c.602 §1; 1987 c.758 §11; 2005 c.94 §75]

314.110 [1953 c.702 §1; 1957 c.337 §4; repealed by 1971 c.248 §6]

314.115 Adjustment to correct effect of certain errors; use limited. (1) If a determination is described in ORS 314.125 and, on the date of the determination, correction of the effect of the error referred to in the applicable provision of ORS 314.125 is prevented by the operation of any law or rule of law other than ORS 314.105 to 314.135 and other than ORS 305.150, then the effect of the error shall be corrected by an adjustment made in the amount and in the manner specified in ORS 314.135.

(2) Except in cases described in ORS 314.125 (3)(b) and (4), an adjustment shall be made under this section only if:

(a) In case the amount of the adjustment would be credited or refunded in the same manner as an overpayment under ORS 314.135, there is adopted in the determination a position maintained by the Department of Revenue; or

(b) In case the amount of the adjustment would be assessed and collected in the same manner as a deficiency under ORS 314.135, there is adopted in the determination a position maintained by the taxpayer with respect to whom the determination is made, and the position maintained by the department in the case described in paragraph (a) of this subsection or maintained by the taxpayer in the case described in this paragraph is inconsistent with the erroneous inclusion, exclusion, omission, allowance, disallowance, recognition, or nonrecognition, as the case may be.

(3) In the case of a determination described in ORS 314.125 (3)(b) (relating to certain exclusions from income), adjustment shall be made under this section only if assessment of a deficiency for the taxable year in which the item is includable or against the related taxpayer was not barred, by any law or rule of law, at the time the department first maintained, in a notice of deficiency sent pursuant to ORS 305.265 or before the Oregon Tax Court, that the item described in ORS 314.125 (3)(b) should be included in the gross income of the taxpayer for the taxable year to which the determination relates.

(4) In the case of a determination described in ORS 314.125 (4) (relating to disallowance of certain deductions and credits), adjustment shall be made under ORS 314.105 to 314.135 only if credit or refund of the overpayment attributable to the deduction or credit described in ORS 314.125 that should have been allowed to the taxpayer or related taxpayer was not barred, by any law or rule of law, at the time the taxpayer first maintained before the department or before the Oregon Tax Court, in writing, that the taxpayer was entitled to such deduction or credit for the taxable year to which the determination relates.

(5) In case the amount of the adjustment would be assessed and collected in the same manner as a deficiency (except for cases described in ORS 314.125 (3)(b)), the adjustment shall not be made with respect to a related taxpayer unless the related taxpayer stands in such relationship to the taxpayer at the time the latter first maintains the inconsistent position in a return, claim for refund, or complaint in the Oregon Tax Court for the taxable year with respect to which the determination is made, or if such position is not so maintained, then at the time of determination. [1971 c.248 §3; 1979 c.689 §24; 1997 c.325 §33; 2005 c.94 §76]

314.120 [1953 c.702 §2; repealed by 1971 c.248 §6]

314.125 When adjustment may be made. The circumstances under which the adjustment provided in ORS 314.115 is authorized are as follows:

(1) The determination requires the inclusion in gross income of an item that was erroneously included in the gross income of the taxpayer for another taxable year or in the gross income of a related taxpayer.

(2) The determination allows a deduction or credit that was erroneously allowed to the taxpayer for another taxable year or to a related taxpayer.

(3)(a) The determination requires the exclusion from gross income of an item included in a return filed by the taxpayer or with respect to which tax was paid and that was erroneously excluded or omitted from the gross income of the taxpayer for another taxable year, or from the gross income of a related taxpayer; or

(b) The determination requires the exclusion from gross income of an item not included in a return filed by the taxpayer and with respect to which the tax was not paid but that is includable in the gross income of the taxpayer for another taxable year or in the gross income of a related taxpayer.

(4) The determination disallows a deduction or credit that should have been allowed to, but was not allowed to, the taxpayer for another taxable year, or to a related taxpayer.

(5) The determination allows or disallows any of the additional deductions allowable in computing the taxable income of estates or trusts, or requires or denies any of the inclusions in the computation of taxable income of beneficiaries, heirs or legatees, specified in sections 641 to 679 of the Internal Revenue Code, or corresponding provisions of subsequent internal revenue laws, and the correlative inclusion or deduction, as the case may be, has been erroneously excluded, omitted or included, or disallowed, omitted or allowed, as the case may be in respect of the related taxpayer.

(6) The determination allows or disallows a deduction (including a credit) in computing the taxable income (or, as the case may be, net income, normal tax net income or surtax net income) of a corporation, and a correlative deduction or credit has been erroneously allowed, omitted or disallowed, as the case may be, in respect of a related taxpayer described in ORS 314.105 (2)(g).

(7)(a) The determination determines the basis of property, and in respect of any transaction on which such basis depends, or in respect of any transaction that was erroneously treated as affecting such basis, there occurred, with respect to a taxpayer described in paragraph (b) of this subsection, any of the errors described in paragraph (c) of this subsection.

(b) The taxpayer with respect to whom the erroneous treatment occurred must be:

(A) The taxpayer with respect to whom the determination is made;

(B) A taxpayer who acquired title to the property in the transaction and from whom, mediately or immediately, the taxpayer with respect to whom the determination is made derived title; or

(C) A taxpayer who had title to the property at the time of the transaction and from whom, mediately or immediately, the taxpayer with respect to whom the determination is made derived title, if the basis of the property in the hands of the taxpayer with respect to whom the determination is made is determined under section 1015(a) of the Internal Revenue Code.

(c) With respect to a taxpayer described in paragraph (b) of this subsection, there was an erroneous inclusion in, or omission from, gross income, there was an erroneous recognition, or nonrecognition, of gain or loss, or there was an erroneous deduction of an item properly chargeable to capital account or an erroneous charge to capital account of an item properly deductible. [1971 c.248 §4; 1983 c.162 §50; 1987 c.293 §52; 2005 c.94 §77]

314.130 [1953 c.702 §3; repealed by 1971 c.248 §6]

314.135 Computation; method of adjustment; credit or setoff limited; recovery after payment limited. (1)(a) In computing the amount of an adjustment under ORS 314.105 to 314.135 there shall first be ascertained the tax previously determined for the taxable year with respect to which the error was made. The amount of the tax previously determined shall be the excess of:

(A) The sum of the amount shown as the tax by the taxpayer on the return of the taxpayer, if a return was made by the taxpayer and an amount was shown as the tax by the taxpayer thereon, plus the amounts previously assessed (or collected without assessment) as a deficiency, over

(B) The amount of refunds (as defined in ORS 314.415) made.

(b) There shall then be ascertained the increase or decrease in tax previously determined which results solely from the correct treatment of the item in the computation of gross income, taxable income, and other matters under ORS 316.317 or ORS chapter 317 or 318. A similar computation shall be made for any other taxable year affected, or treated as affected, by an Oregon net loss for prior years (as provided by ORS 317.476 or 317.478 and section 45b, chapter 293, Oregon Laws 1987), by a net operating loss deduction (as defined in the federal Internal Revenue Code) or by a capital loss carryback or carryover (as defined in the federal Internal Revenue Code) determined with reference to the taxable year with respect to which the error was made. The amount so ascertained (together with any amounts wrongfully collected as additions to the tax or interest, as a result of such error) for each taxable year shall be the amount of the adjustment for that taxable year.

(2) The adjustment authorized in ORS 314.115 (1) shall be made by assessing and collecting, or refunding or crediting, the amount thereof in the same manner as if it were a deficiency determined by the Department of Revenue with respect to the taxpayer as to whom the error was made or an overpayment claimed by such taxpayer, as the case may be, for the taxable year or years with respect to which an amount is ascertained under subsection (1) of this section and as if on the date of the determination one year remained before the expiration of the periods of limitation upon assessment or filing claim for refund for such taxable year or years. If, as a result of a determination described in ORS 314.105 (1)(d), an adjustment has been made by the assessment and collection of a deficiency of the refund or credit of an overpayment, and subsequently such determination is altered or revoked, the amount of the adjustment ascertained under subsection (1) of this section shall be redetermined on the basis of such alteration or revocation and any overpayment or deficiency resulting from such redetermination shall be refunded or credited, or assessed and collected, as the case may be, as an adjustment under this part. In the case of an adjustment resulting from an increase or decrease in a net operating loss or net capital loss which is carried back to the year of adjustment, interest shall not be collected or paid for any period prior to the close of the taxable year in which the net operating loss or net capital loss arises.

(3) The amount to be assessed and collected in the same manner as a deficiency, or to be refunded or credited in the same manner as an overpayment, under ORS 314.105 to 314.135, shall not be diminished by any credit or setoff based upon any item other than the one which was the subject of the adjustment. The amount of the adjustment under ORS 314.105 to 314.135, if paid, shall not be recovered by a claim or suit for refund or suit for erroneous refund based upon any item other than the one which was the subject of the adjustment. [1971 c.248 §5; 1983 c.162 §51; 1987 c.293 §52a]

314.140 Adjustment of returns of related taxpayers after reallocation of income or deduction on federal return. (1) Whenever there has been an adjustment of federal income tax liability involving a reallocation of any item of income or deduction between related taxpayers, and when such adjustment results in the assessment of a tax deficiency or the issuance of a refund check or both, then for Oregon income tax purposes, whether or not the Department of Revenue effects a similar reallocation of income or deduction for the same tax year, said federal tax deficiency and additions thereto shall be deducted (to the extent otherwise provided by law) by the taxpayer paying the same, and said federal tax refund, including interest thereon, shall be returned (to the extent otherwise required by law) by the taxpayer receiving the same.

(2) If, however, the related taxpayers involved (or their authorized representatives) so elect in accordance with subsection (3), then the refund of one, with interest thereon, shall be treated as a reduction of the deficiency of the other, including additions thereto, so that only the net amount of deficiency shall be deducted or the net amount of refund shall be returned, as the case may be.

(3) An election under subsection (2) shall be in writing, signed by each related taxpayer or authorized representative, and filed with the department prior to the expiration of the applicable period of limitation with respect to the adjustment of the last open state return of either related taxpayer affected by the federal tax deficiency or refund. Such election shall constitute a waiver of any statute of limitations to permit the adjustment of all returns of the related taxpayers for the purpose only of effecting a reallocation of income or deductions similar to that made by the federal tax authorities and to adjust the federal income tax deductions resulting therefrom. [1953 c.702 §4]

314.155 [1965 c.178 §8; 1969 c.493 §79; repealed by 1983 c.162 §57]

314.160 [1965 c.178 §9; 1969 c.493 §80; repealed by 1983 c.162 §57]

314.165 [1965 c.178 §10; 1969 c.493 §81; repealed by 1983 c.162 §57]

314.170 [1965 c.178 §11; repealed by 1969 c.493 §98]

314.175 [1965 c.178 §12; 1969 c.493 §82; repealed by 1983 c.162 §57]

314.210 [Formerly 317.605; 2003 c.46 §31; repealed by 2005 c.94 §78]

314.220 [Formerly 317.610; repealed by 2005 c.94 §78]

314.230 [Formerly 317.615; repealed by 2005 c.94 §78]

314.250 [1967 c.592 §18; 1987 c.293 §53; repealed by 1989 c.802 §8 (1)]

POLLUTION CONTROL FACILITIES

314.255 Collection of taxes due after revocation of certification of pollution control facility; exceptions to tax relief allowed for pollution control facility. (1) Upon receipt of notice of the revocation of a certification of a pollution control facility pursuant to ORS 468.185 (1), the Department of Revenue immediately shall collect any taxes due by reason of such revocation, and shall have the benefit of all laws of this state pertaining to the collection of income and excise taxes. No assessment of such taxes shall be necessary and no statute of limitation shall preclude the collection of such taxes.

(2) No tax relief shall be allowed under ORS 307.405 or 315.304 for any pollution control facility constructed or used by or for the benefit of any governmental or quasi-governmental body or public corporation or form thereof, except where such facilities are used for resource recovery. [1967 c.592 §§16,17; 1969 c.493 §83; 1979 c.531 §5]

LOBBYING EXPENDITURES

314.256 Lobbying expenditures; proxy tax; rules. (1) If a tax is imposed upon an organization under section 6033(e) of the Internal Revenue Code (proxy tax on lobbying expenditures) for any tax year, a like tax is imposed for the tax year upon the same amount as taxed for federal tax purposes, as allocated or apportioned to Oregon. The rate of the tax shall be the rate specified in ORS 317.061. The tax shall be assessed and collected under the applicable provisions of this chapter and ORS chapter 305.

(2) Any organization that is required to include on a federal return the information described in section 6033(e)(1) of the Internal Revenue Code shall file a copy of the federal return containing the information with the Department of Revenue.

(3) The department may determine by rule the method by which the tax described in subsection (1) of this section is allocated and apportioned to Oregon.

(4) If section 6033(e) of the Internal Revenue Code (relating to the proxy tax on lobbying expenditures) is repealed or otherwise eliminated by Act of the United States, this section is repealed as of the applicable date of the repeal or elimination of the proxy tax under section 6033(e) of the Internal Revenue Code. [1995 c.556 §37; 1997 c.839 §49]

314.257 [1995 c.556 §46; repealed by 1997 c.839 §69]

CONVEYANCE OF REAL PROPERTY INTEREST

314.258 Conveyance of real property interest; withholding by authorized agent. (1) As used in this section:

(a) “Authorized agent” means an agent who is responsible for closing and settlement services in a conveyance of a real property interest.

(b) “Closing and settlement services” means services that are provided for the benefit of a transferor or a transferee in connection with a conveyance of a real property interest, and the receipt or disbursement of moneys in connection with a sale, lease, encumbrance, mortgage or deed of trust in or related to real property.

(d) “Real property interest” means a United States real property interest, as defined in section 897(c) of the Internal Revenue Code, that is located in the State of Oregon.

(2)(a) If there is a conveyance of a real property interest, the authorized agent providing closing and settlement services is required to withhold an amount equal to the least of:

(A) Four percent of the consideration for the real property interest being conveyed;

(B) Four percent of the net proceeds resulting from the conveyance; or

(b) For purposes of this subsection, a transferor is:

(A) An individual who is not a resident of this state at the time of both the closing date of the conveyance and the date on which proceeds of the conveyance are disbursed; or

(B) A C corporation that, immediately after the conveyance of the real property interest, is not doing business in this state.

(3)(a) Notwithstanding subsection (2) of this section, an authorized agent is not required to withhold amounts under this section if the authorized agent obtains a written affirmation executed by the transferor on a form prescribed by the Department of Revenue certifying under penalty of perjury that:

(A) The consideration for the conveyance does not exceed $100,000;

(B) The transferee is acquiring the real property interest through foreclosure; or

(i) If an individual, is a resident of this state;

(ii) If a corporation, has a permanent place of business in this state; or

(iii) Has professionally competent knowledge or advice that the transferor will not owe tax under ORS chapter 316, 317 or 318 for the tax year because the conveyance is an exchange that qualifies for deferral under section 1031 or 1033 of the Internal Revenue Code or is a nontaxable transaction under Oregon tax law.

(b) If withholding is not retained and remitted to the department pursuant to this section, the authorized agent shall retain the written affirmation described in this subsection for six years from the date of the closing of the conveyance transaction and shall present the written affirmation to the department immediately upon request in writing from the department.

(4) For purposes of this section, a corporation is not doing business in this state if:

(a) The corporation has not been issued a certificate of existence or a certificate of authorization by the Secretary of State as described in ORS 60.027; and

(b) The corporation does not maintain a permanent office with a staff of at least one employee in this state or does not own or lease property in this state other than the property that is the subject of the conveyance.

(5)(a) Amounts withheld pursuant to this section are held in trust for the State of Oregon and shall be paid to the department in the time and manner prescribed by the department by rule.

(b) If an authorized agent fails to remit an amount withheld or required to be withheld by the agent under this section by the time remittance is required, the department may enforce collection in the same manner as the department enforces the collection of amounts withheld by employers under ORS 316.162 to 316.221.

(c) Notwithstanding paragraph (b) of this subsection, the department may not proceed with collection actions against the authorized agent if the authorized agent:

(A) Presents the department with the written affirmation described in subsection (3) of this section; and

(B) Demonstrates to the department that the authorized agent obtained the written affirmation prior to disbursal of funds due the transferor resulting from the conveyance. [2007 c.864 §4]

REMICS AND FASITS

314.260 Taxation of real estate mortgage investment conduits. (1)(a) An entity described in section 860D of the Internal Revenue Code (a real estate mortgage investment conduit or REMIC) is not subject to a tax under ORS chapter 316, 317 or 318 (and may not be treated as a corporation, partnership or trust for purposes of ORS chapter 316, 317 or 318).

(b) If a REMIC engages in a prohibited transaction as defined in section 860F(a)(2) of the Internal Revenue Code, the REMIC shall be subject to a tax equal to six and six-tenths percent of the net income derived from the prohibited transaction. The tax imposed under this paragraph shall be assessed and collected under this chapter and ORS chapter 305 and shall be credited to the General Fund to be made available for general governmental expenses.

(2) The income of any REMIC shall be taxable to the holders of the interests in the REMIC under ORS chapter 316, 317 or 318, whichever is applicable.

(3) Taxable income or loss with respect to income received as the holder of any interest in a REMIC shall be determined under sections 860A to 860G of the Internal Revenue Code.

(4) To determine the portion of the income of a REMIC that is taxable to a nonresident holder of an interest in the REMIC, there shall be included only that part derived from or connected with sources in this state, as such part is determined under rules adopted by the Department of Revenue in accordance with the general rules in ORS 316.352 (1987 Replacement Part). [1987 c.293 §63; 2005 c.94 §79]

314.265 Taxation of financial asset securitization investment trusts. (1)(a) An entity described in section 860L of the Internal Revenue Code (a financial asset securitization investment trust, or FASIT) shall not be subject to a tax under ORS chapter 316, 317 or 318 (and shall not be treated as a corporation, partnership, trust or mortgage pool for purposes of ORS chapter 316, 317 or 318).

(b) If a FASIT engages in a prohibited transaction as defined in section 860L(e)(2) of the Internal Revenue Code, the FASIT shall be subject to a tax equal to 6.6 percent of the net income derived from the prohibited transaction. The tax shall be paid by the holder of the ownership interest in the FASIT. The tax imposed under this paragraph shall be assessed and collected under the applicable provisions of this chapter and ORS chapter 305 and shall be credited to the General Fund to be made available for general governmental expenses.

(2) The income of any FASIT shall be taxable to the holders of the ownership interests in the FASIT under ORS chapter 316, 317 or 318, whichever is applicable.

(3) Taxable income or loss, with respect to income received as the holder of any interest in a FASIT, shall be determined under sections 860H to 860L of the Internal Revenue Code, as defined in ORS 316.012 or 317.010 and 317.018, and section 1621(e) of the Small Business Job Protection Act of 1996 (P.L. 104-188), as otherwise determined and modified under ORS chapter 316, 317 or 318, whichever is applicable, to the FASIT interest holder.

(4) To determine the portion of the income of a FASIT that is taxable to a nonresident holder of an interest in the FASIT, there shall be included only that part derived from or connected with sources in this state. [1997 c.839 §51]

314.275 [1957 c.544 §2; 1969 c.493 §84; 1983 c.162 §52; repealed by 1987 c.293 §56]

METHODS OF ACCOUNTING AND REPORTING INCOME

314.276 Method of accounting. (1) The method of accounting of a partnership, REMIC (real estate mortgage investment conduit), FASIT (financial asset securitization investment trust) or taxpayer shall be the same as the method of accounting which the partnership, REMIC, FASIT or taxpayer uses for federal income tax purposes for the taxable year.

(2) Notwithstanding subsection (1) of this section, if the method of accounting used by the partnership, REMIC, FASIT or taxpayer does not clearly reflect income, the computation of taxable income shall be made under such method as the Department of Revenue may prescribe.

(3) If the method of accounting is changed for federal income tax purposes, the partnership, REMIC, FASIT or taxpayer shall adopt the same method of accounting for purposes of ORS chapter 316, 317 or 318 and shall use that method beginning with the return filed which corresponds to the first federal return filed which is required to use the new method. Any adjustments required to prevent amounts from being duplicated or omitted shall be taken into account for state tax purposes in the same manner as for federal tax purposes.

(4) Subsections (1) and (3) of this section shall not apply with respect to methods of accounting which are disallowed for purposes of ORS chapter 316, 317 or 318. [1987 c.293 §57; 1997 c.839 §53]

314.277 [1961 c.176 §§2,4; 1969 c.493 §85; repealed by 1987 c.293 §56]

314.280 Allocation of income of financial organization or public utility from business within and without state; rules; alternative apportionment for electing utilities or telecommunications taxpayers. (1) If a taxpayer has income from business activity as a financial organization or as a public utility (as defined respectively in ORS 314.610 (4) and (6)) which is taxable both within and without this state (as defined in ORS 314.610 (8) and 314.615), the determination of net income shall be based upon the business activity within the state, and the Department of Revenue shall have power to permit or require either the segregated method of reporting or the apportionment method of reporting, under rules and regulations adopted by the department, so as fairly and accurately to reflect the net income of the business done within the state.

(2) The provisions of subsection (1) of this section dealing with the apportionment of income earned from sources both within and without the State of Oregon are designed to allocate to the State of Oregon on a fair and equitable basis a proportion of such income earned from sources both within and without the state. Any taxpayer may submit an alternative basis of apportionment with respect to the income of the taxpayer and explain that basis in full in the return of the taxpayer. If approved by the department that method will be accepted as the basis of allocation.

(3)(a) Apportionment rules adopted by the department under this section must apply the weightings used in ORS 314.650 to comparable factors used to apportion income from business activity of taxpayers subject to this section.

(b) Notwithstanding paragraph (a) of this subsection, a taxpayer primarily engaged in utilities or telecommunications may elect to have income from business activity apportioned by applying the weightings used in ORS 314.650 (1999 Edition) to comparable factors used to apportion such income.

(c) The election shall be made in the time and manner prescribed by the department by rule. The election shall continue in force and effect for the tax year for which the election is made and for each subsequent tax year until the year in which the taxpayer revokes the election.

(d) An electing taxpayer may revoke the taxpayer’s election by filing a revocation of election in the time and manner prescribed by the department. The revocation shall apply to the tax year following the year in which the election is made and to each subsequent tax year.

(e) As used in this subsection:

(A) “Telecommunications” means business operations that conduct, maintain or provide for the transmission of voice data and text between network termination points and telecommunications reselling. Transmission facilities may be based on one technology or a combination of technologies.

(B) “Utilities” means business operations that provide electric power, natural gas, steam supply, water supply or sewage removal through a permanent infrastructure of lines, mains and pipes. [1957 c.632 §4 (enacted in lieu of 316.205 and 317.180); 1963 c.319 §1; 1965 c.152 §22; 2001 c.933 §1]

314.285 [1957 c.632 §5 (enacted in lieu of 316.210 and 317.185); repealed by 1987 c.293 §56]

314.287 Costs allocable to inventory. (1) In the computation of state taxable income, costs allocable to inventory shall be the same as those allocable to inventory under section 263A of the Internal Revenue Code as of the close of the tax year for which a return is filed and shall not be adjusted for any addition, subtraction, modification or other adjustment contained in this chapter or ORS chapter 316, 317 or 318 or other law governing the imposition of state taxes imposed upon or measured by net income.

(2) If any provision of ORS chapter 316, 317 or 318 appears to require an adjustment to inventory costs contrary to the provisions of this section, that adjustment shall not be made.

(3) The additions, subtractions, modifications or other adjustments to federal taxable income required in determining Oregon taxable income under ORS chapter 316, 317 or 318 shall be made to federal taxable income notwithstanding that such adjustments are properly attributable to costs allocable to inventory. [1987 c.293 §57b]

314.290 [1957 c.102 §2; 1979 c.579 §4; 1991 c.457 §16a; 1995 c.556 §22; repealed by 2001 c.509 §19]

314.295 Apportionment or allocation where two or more organizations, trades or businesses are owned or controlled by the same interests. In any case of two or more organizations, trades or businesses (whether or not incorporated, whether or not organized in the United States and whether or not affiliated) owned or controlled directly or indirectly by the same interests, the Department of Revenue may distribute, apportion or allocate gross income, deductions, credits or allowances between or among such organizations, trades or businesses, if it determines that such distribution, apportionment or allocation is necessary in order to prevent evasion of taxes or clearly to reflect the income of any of such organizations, trades or businesses. [1957 c.632 §10 (enacted in lieu of 316.560 and 317.375); 1991 c.457 §16b]

314.297 Election for alternative determination of farm income; computation of income; rules. (1) As used in this section:

(a) “Farm income”:

(A) Means taxable income attributable to a farming business; and

(B) Includes gain from the sale or other disposition of property (other than land) regularly used by the taxpayer in the farming business for a substantial period of time.

(b) “Farming business” has the meaning given that term in section 263A(e)(4) of the Internal Revenue Code.

(d) “Taxpayer” means a person subject to tax under ORS chapter 316, but does not include an estate or trust.

(2) A taxpayer may elect to have personal income taxes for the tax year determined under this section in lieu of ORS chapter 316 if the individual is engaged in a farming business for the tax year and has farm income for the tax year.

(3) The taxpayer shall make the election in the manner provided by the Department of Revenue. In making the election, the taxpayer shall determine the amount of farm income that is to be considered elected farm income. The election shall apply only to the tax year for which the election is made.

(4) Upon making the election, the tax imposed under this section shall equal:

(a) The tax computed under ORS chapter 316 on the taxable income of the taxpayer reduced by the income that is elected farm income under subsection (3) of this section; plus

(b) The cumulative increase in the tax computed under ORS chapter 316 that would result if the taxable income of the taxpayer for each of the three prior tax years were increased by an amount equal to one-third of the income that is elected farm income under subsection (3) of this section.

(5) Any tax credit that would be allowable against the tax computed under ORS chapter 316 may be allowed against the tax computed under this section.

(6) The department shall:

(a) Prescribe the manner in which an election under this section is made; and

(b) Adopt rules on:

(A) The order and manner in which items of income, gain, deduction, loss or limitation on tax shall be taken into account in computing the tax under this section; and

(B) The treatment of a short tax year for purposes of this section. [2001 c.252 §2]

314.300 Passive activity loss; determination; treatment; rules. For purposes of applying section 469 of the Internal Revenue Code to the laws of this state imposing taxes upon or measured by income:

(1) Passive activity loss shall be determined with respect to the activities of the taxpayer under section 469 of the Internal Revenue Code and related federal law and then shall be adjusted by the additions, subtractions, modifications and other adjustments as allocated to passive activity loss under subsection (2) of this section.

(2) Those additions, subtractions, modifications and other adjustments required to be made to federal taxable income under this chapter or ORS chapters 316, 317 and 318, or other law governing the imposition of state taxes imposed upon or measured by income, shall be allocated to passive activity loss as provided by rule of the Department of Revenue.

(3) Passive activity loss, as determined under subsections (1) and (2) of this section, shall not be allowed for the taxable year of the taxpayer. Passive activity loss shall be treated as a deduction allocable to passive activity in the next succeeding year, and except as otherwise adjusted under subsection (1) of this section, shall be treated in the same manner as passive activity loss is treated under section 469 of the Internal Revenue Code, and related sections.

(4) For state personal income tax purposes, in the case of a nonresident, passive activity loss attributable to Oregon sources shall be treated in the same manner as described under subsections (1) to (3) of this section. [1987 c.293 §64; 1995 c.556 §23]

314.302 Interest on deferred tax liabilities with respect to installment obligations; rules. (1) Subject to subsections (2) to (4) of this section, if interest on deferred tax liability with respect to an installment obligation is required to be paid for federal income tax purposes under section 453A of the Internal Revenue Code, then interest on that same deferred tax liability shall be paid in the same manner (including the pledging rules under section 453A(d) of the Internal Revenue Code) for state tax purposes and shall, in the amount added, increase the tax imposed under ORS chapter 316, 317 or 318, whichever is appropriate.

(2) Interest added to tax pursuant to subsection (1) of this section shall be determined in the same manner as interest is determined under section 453A(c) of the Internal Revenue Code except that in determining the interest to be added using section 453A(c) of the Internal Revenue Code:

(a) The interest rate in effect under ORS 305.220 for deficiencies for the month with or within which the taxable year of the taxpayer ends shall be substituted for the underpayment rate referred to in section 453A(c)(2)(B); and

(b) The maximum rate of tax in effect under ORS chapter 316, 317 or 318, whichever is appropriate, shall be substituted for the federal rates of tax referred to in section 453A(c)(3)(B).

(3) The Department of Revenue shall adopt rules consistent with those adopted under section 453A of the Internal Revenue Code and with laws of this state as may be necessary to carry out the provisions of this section, including rules providing for the application of this subsection in the case of contingent payments, short taxable years, pass-thru entities and derivation, attribution or apportionment of installment obligations or income from installment obligations.

(4) In the case of a nonresident subject to taxation under ORS chapter 316, in determining whether or not interest is to be added to tax under this section, and the amount of interest to be added, only those installment obligations that arise from dispositions of property in this state shall be taken into consideration.

(5) For purposes of determining interest under ORS 314.395 or penalties under ORS 314.400 or other law, and for purposes of refund, estimated and other prepayments of tax, credits and all other purposes, the interest added under this section shall be considered as any other increase in the tax imposed under ORS chapter 316, 317 or 318, whichever is appropriate.

(6) The interest added to tax imposed under this section shall be assessed and collected under the applicable provisions of this chapter and ORS chapters 305, 316, 317 and 318 and shall be paid over to the State Treasurer and held in the General Fund as miscellaneous receipts available generally to meet any expense or obligation of the State of Oregon lawfully incurred. [1989 c.625 §57]

314.304 [1995 c.556 §42; 1999 c.21 §33; repealed by 1999 c.21 §34]

Note: 314.304 is repealed June 30, 2008. See section 34, chapter 21, Oregon Laws 1999. 314.304 (2005 Edition) is set forth for the user’s convenience.

314.304 Amortization of goodwill and other intangibles; expensing of depreciable assets; elections before April 15, 1998. (1) Notwithstanding ORS 314.415 or other law, if a taxpayer has made one or both elections under Treas. Reg. §1.197-1T for federal income tax purposes, the election or elections shall apply for Oregon tax purposes. The taxpayer shall amend the taxpayer’s Oregon return to conform the return with the corresponding federal return affected by the election or elections. The amendment must be made on or before April 15, 1998.

(2) If, for taxable years beginning on or after January 1, 1993, and before January 1, 1995, a taxpayer made the election described in section 179(c) of the Internal Revenue Code, as amended by the Revenue Reconciliation Act of 1993 (P.L. 103-66), on the taxpayer’s federal income tax return, the taxpayer may amend the taxpayer’s corresponding Oregon return. The amendment shall conform the return to the taxpayer’s federal income tax return with respect to amounts subject to the section 179(c) election. Notwithstanding the provisions in section 179(c) and the regulations thereunder that set forth the time for making the election, the taxpayer’s amended return must be filed on or before April 15, 1998.

314.306 Income from discharge of indebtedness; bankruptcy; insolvency. (1) If a taxpayer excludes an amount from federal gross income by reason of the discharge of indebtedness of the taxpayer under section 108(a)(1)(A) of the Internal Revenue Code (relating to discharge of indebtedness in a bankruptcy declared under U.S.C. Title 11), then, with respect to that portion of the excluded amount that is apportioned to Oregon, the taxpayer shall apply the rules in 11 U.S.C. 346(j), as amended and in effect on April 15, 1995.

(2) If a taxpayer excludes an amount from federal gross income by reason of the discharge of indebtedness of the taxpayer under section 108(a)(1)(B) or (C) of the Internal Revenue Code (relating to discharge of indebtedness in insolvency or discharge of qualified farm indebtedness), then, with respect to that portion of the excluded amount that is apportioned to Oregon, the following paragraphs shall apply, in the following order:

(a) If the taxpayer has made the election under section 108(b)(5) of the Internal Revenue Code to first reduce the basis of the depreciable property of the taxpayer, the election shall also be effective for Oregon tax purposes. A corresponding reduction in the basis of the depreciable property of the taxpayer shall be made for Oregon tax purposes.

(b) The amount, if any, by which the following attributes are reduced under section 108(b)(1) of the Internal Revenue Code for federal tax purposes shall be added back for Oregon tax purposes:

(A) Federal net operating loss.

(B) Capital loss carryover.

(C) Basis of the property of the taxpayer, excluding amounts subject to the election under section 108(b)(5) of the Internal Revenue Code.

(D) Passive activity loss carryover.

(A) Any Oregon net operating loss of an individual or corporate taxpayer, including a net operating loss carryover to the taxpayer, shall be reduced by the amount of discharged indebtedness.

(B) Any net capital loss for the taxable year of the discharge, and any capital loss carryover to the taxable year, shall be reduced by the amount of discharged indebtedness minus the total amount taken into account under subparagraph (A) of this paragraph.

(C) The basis of the property of the taxpayer shall be reduced by the amount of discharged indebtedness minus the total amount taken into account under subparagraphs (A) and (B) of this paragraph.

(D) The passive activity loss carryover under section 469(b) of the Internal Revenue Code from the taxable year of the discharge shall be reduced by the amount of discharged indebtedness minus the total amount taken into account under subparagraphs (A), (B) and (C) of this paragraph. [1995 c.556 §19]

314.307 Definitions; reportable transactions. As used in this section and ORS 314.308, 314.403, 314.404, 314.406 and 314.469:

(1) “Listed transaction” means any of the following transactions:

(a) A listed transaction under section 6707A of the Internal Revenue Code.

(b) A transaction without economic substance in which an Oregon taxable corporation:

(A) Transfers income-producing assets to a real estate investment trust owned directly or indirectly by the corporation; and

(B) With respect to dividends paid from the real estate investment trust, claims a dividend-received deduction and the real estate investment trust claims a dividend-paid deduction.

(A) Transfers income-producing assets to a regulated investment company owned directly or indirectly by the corporation; and

(B) With respect to dividends paid from the regulated investment company, claims a dividend-received deduction and the regulated investment company claims a dividend-paid deduction.

(2) “Oregon taxable corporation” means a corporation:

(a) That does business in Oregon, is organized in Oregon or has income from Oregon sources; or

(b) That is owned by an Oregon income or corporate excise taxpayer.

(3) “Reportable transaction” means a transaction:

(a) That is a reportable transaction under section 6707A of the Internal Revenue Code; or

(b) That is a listed transaction.

(4) “Transaction without economic substance” means a transaction for which the taxpayer cannot demonstrate a business purpose other than tax savings. [2007 c.568 §2]

Note: Section 21, chapter 568, Oregon Laws 2007, provides:

Sec. 21. Sections 2 [314.307], 8 [314.403], 12 [314.406] and 13 [314.469] of this 2007 Act apply to tax years beginning on or after January 1, 1999. [2007 c.568 §21]

314.308 Reportable transactions; rules. (1) If required by rules adopted by the Department of Revenue:

(a) Any person who engages in a reportable transaction as a buyer or transferor shall report the transaction to the department.

(b) Any person who, as the result of a reportable transaction, acquires an interest in property, a present or future right to income, a present or future right to claim a loss, deduction, credit, exemption or other tax benefit or a present or future right to an adjustment to basis shall report the transaction to the department.

(c) Any person who is associated with a reportable transaction in an association that the department has by rule identified as an association that requires reporting shall report the transaction to the department.

(2) A reportable transaction shall be reported to the department in the time, form and manner prescribed by the department by rule. Rules adopted by the department under this section may not apply to a reportable transaction occurring in a tax year beginning before January 1, 2007. [2007 c.568 §3]

LIABILITY OF TRANSFEREE OR OWNER OF TRUST

314.310 Liability of transferee of taxpayer for taxes imposed on taxpayer. (1) When a taxpayer ceases to exist or is no longer subject to the jurisdiction of this state (although subject to the courts of a state having comity or reciprocity with the State of Oregon), being indebted for taxes upon or measured by net income, the transferee of the money or property of the taxpayer shall be liable for any such tax or deficiency in tax, including penalties and interest, imposed by law on the taxpayer and accruing or accrued upon the date of transfer, to the extent of the amount of money or value of the property received by the transferee. Property received by the transferee shall be valued at the fair market value of said property at the time of transfer to the initial transferee by the taxpayer.

(2) The amount for which a transferee of the property of a taxpayer is liable in respect of any such tax or deficiency in tax, including penalties and interest, whether shown on the return of the taxpayer or determined as a deficiency in the tax, shall be assessed against such transferee and collected and paid in the same manner and subject to the same provisions and limitations as would apply to the taxpayer had the taxpayer or it continued subject to the jurisdiction of this state, except as provided in this section.

(3) As used in this section, the term “transferee” means one not a bona fide purchaser for value and includes an heir, legatee, devisee, distributee of an estate of a deceased person, the shareholder of a dissolved corporation, the assignee or donee of an insolvent person, the successor of a corporation which is a party to a corporate reorganization, and persons acting on behalf of such transferees in a fiduciary capacity.

(4) The period of limitation for assessment of any such liability of a transferee shall be as follows:

(a) In the case of the liability of an initial transferee of the property of the taxpayer, within one year after the expiration of the period of limitation for assessment against the taxpayer.

(b) In the case of the liability of a transferee of a transferee of the property of the taxpayer, within one year after the expiration of the period of limitation for assessment against the preceding transferee, but not more than three years after the expiration of the period of limitation for assessment against the taxpayer.

(c) If, before the expiration of the period of limitation for the assessment of the liability of the transferee, as set forth in paragraph (a) or (b) of this subsection, a court proceeding for the collection of the tax or liability in respect thereof has been filed against the taxpayer or last preceding transferee, then the period of limitation for assessment of the liability of the transferee shall expire one year after final judgment has been rendered in the court proceedings.

(d) If, before the expiration of the time prescribed in paragraph (a), (b) or (c) of this subsection for the assessment of the liability, both the Department of Revenue and the transferee have consented in writing to its assessment after such time, the liability may be assessed at any time prior to the expiration of the period of extension agreed upon. The period so agreed upon may be further extended by subsequent agreements in writing made before the expiration of the period of extension previously agreed upon.

(5) For the purposes of this section, if the taxpayer is deceased, or in the case of a corporation, has terminated its existence, the period of limitation for assessment against the taxpayer shall be the period which would be in effect had death or termination of existence not occurred.

(6) In the absence of notice to the Department of Revenue of the existence of a fiduciary relationship, notice of liability enforceable under this section in respect of a tax or deficiency in tax, including penalties and interest thereon, imposed upon or measured by net income, if mailed to the last-known address of the person subject to the liability, shall be sufficient for the purposes of this section even if such person is deceased, or is under a legal disability, or, in the case of a corporation, has terminated its existence. [1955 c.367 §2; 1969 c.493 §86; 1995 c.453 §4; 1997 c.325 §35]

314.330 Lien if grantor or other person determined to be owner of trust. (1) If a final determination treats the grantor of a trust or any other person as the owner of any portion of a trust pursuant to sections 671 to 679 of the federal Internal Revenue Code or any other law, the lien of the State of Oregon imposed by ORS 314.417 shall attach to all property and rights to property, whether real or personal, of that portion of the trust. The lien may be foreclosed pursuant to ORS 314.419 or collected by warrant pursuant to ORS 314.430.

(2) For the purposes of subsection (1) of this section, “final determination” means:

(a) An assessment which has become final due to failure to exercise or exhaust rights of appeal to the Oregon Tax Court.

(b) A decision of the Oregon Tax Court which has become final.

RETURNS

314.355 Returns when tax year changed. If a taxpayer changes the tax year on the basis of which net income is computed, the taxpayer shall, at the time and in the manner the Department of Revenue prescribes, make a separate return of net income received during the period intervening between the end of the former income year of the taxpayer and the beginning of the new income year. [1957 c.632 §6 (enacted in lieu of 316.520); 1987 c.293 §58]

314.360 Information returns. (1) Fiduciaries required to make returns under laws imposing tax upon or measured by net income, proprietorships, partnerships, corporations, joint stock companies or associations or insurance companies, having places of business in this state, in whatever capacity acting, including lessees or mortgagors of real or personal property, fiduciaries, employers, purchasers of stumpage and all officers and employees of the state or of any political subdivisions of the state, having the control, custody, disposal or payment of interest (other than interest coupons payable to bearer), rent, dividends, salaries, fees, wages, the purchase price of stumpage, emoluments or other fixed or determinable annual or periodical gains, profits and income, paid or payable, during any year to any taxpayer, shall make return thereof, under oath, to the Department of Revenue, under such regulations and in such form and manner and to such extent as it may prescribe.

(2)(a) Every person doing business as a broker shall, when required by the department, render a correct return duly verified under oath, under such rules and regulations as the department may prescribe, showing the names of customers for whom such person has transacted any business, with such details as to the profits, losses, or other information which the department may require, as to each of such customers, as will enable the department to determine whether all income tax due on profits or gains of such customers has been paid.

(b) Every person who is required to file a return with respect to a real estate transaction under section 6045(e) of the Internal Revenue Code shall file a copy of that return with the department.

(3) The department may prescribe circumstances under which the filing requirements under this section are waived. [1957 c.632 §7 (enacted in lieu of 316.535); 1959 c.305 §1; 1987 c.293 §59; 1987 c.366 §3; 1997 c.839 §54]

314.362 Filing return on magnetic media or other machine-readable form; rules. (1) The information return and the employer’s annual return, described in ORS 314.360 and 316.202 (3) shall be filed on magnetic media or other machine-readable form if the corresponding federal return is required to be filed on magnetic media or other machine-readable form by section 6011 (e) of the Internal Revenue Code and the regulations, revenue rulings and revenue procedures adopted pursuant to that section.

(2) The Department of Revenue may, by administrative rule, adopt the regulations, revenue rulings or revenue procedures which are adopted pursuant to section 6011 (e) of the Internal Revenue Code whenever such regulations, revenue rulings or revenue procedures may be adopted.

(3) The department may require that the magnetic media or other machine-readable forms filed with it meet specifications prescribed by the department. The department may allow an alternative method of filing if the person filing the return is unable to meet the specifications prescribed by the department. [1987 c.366 §2; 1991 c.457 §17; 1993 c.726 §12; 1995 c.556 §25; 1997 c.839 §55]

314.363 [1975 c.760 §2; repealed by 1984 c.1 §18]

314.365 [1957 c.632 §8 (enacted in lieu of 316.550 and 317.365); 1961 c.533 §51; repealed by 1985 c.266 §6]

314.370 Department requiring return or supplementary return. If the Department of Revenue is of the opinion that a taxpayer has failed to file a return, or to include in a return filed, either intentionally or through error, items of taxable income, it may require from the taxpayer a return or supplementary return, under oath, in such form as it shall prescribe, of all the items of income which the taxpayer received during the year for which the return is made, whether or not taxable under the provisions of the applicable tax law. If from a supplementary return, or otherwise, the department finds that any items of taxable income have been omitted from the original return it may require the items so omitted to be disclosed under oath of the taxpayer, and to be added to the original return. Such supplementary return and the correction of the original return shall not relieve the taxpayer from any of the penalties to which the taxpayer may be liable under any provisions of law whether or not the department required a return or a supplementary return under this section. [1957 c.632 §9 (enacted in lieu of 316.555)]

314.380 Furnishing copy of federal or other state return or report; action required when return filed or changed or tax assessed. (1) Every taxpayer shall, upon request of the Department of Revenue, furnish a copy of the return for the corresponding year, which the taxpayer has filed or may file with the federal government, showing the taxpayer’s net income and how obtained and the several sources from which derived. Every taxpayer shall, upon request of the department, furnish a copy of any federal revenue agent’s report or other audit report made upon any audit or adjustment of the taxpayer’s federal income tax return or income tax return of another state.

(2)(a) The taxpayer shall report to the department any change in the taxpayer’s taxable income that is subject to tax by this state or any change in the taxpayer’s tax liability paid to or owing this state because:

(A) The Internal Revenue Service or other competent authority has changed or corrected the amount of a taxpayer’s taxable income, tax credit or other amount taken into account in determining the taxpayer’s tax liability as reported on a federal income tax return or an income tax return of another state for any taxable year; or

(B) The taxpayer:

(i) Files an original or amended return that is accepted by the Internal Revenue Service or the taxing authority of another state; or

(ii) Is assessed tax by the Internal Revenue Service or the taxing authority of another state for the failure to file a return as required.

(b) In the case of a change or correction made by the Internal Revenue Service or by the taxing authority of another state, the report shall either concede the accuracy of the determination or state wherein the taxpayer believes it to be erroneous. The report may be treated by the department as a claim for refund pursuant to ORS 314.415 if the department determines that the taxpayer’s correct Oregon tax liability is a reduction from the taxpayer’s Oregon tax liability prior to the filing of the report. Notwithstanding the limitations of ORS 314.415, a claim for refund under this paragraph shall be deemed timely if received by the department within two years after the federal or other state correction was made.

(c) In the case of a taxpayer filing an original or amended federal or other state return that reports a change in the taxpayer’s taxable income that is subject to tax by this state or that results in a change in the taxpayer’s tax liability paid to or owing this state, the report required by this subsection shall be an amended Oregon return. The taxpayer shall file the amended return with the department within 90 days thereafter.

(3) For purposes of this section:

(a) A change or correction of a taxpayer’s taxable income is deemed to be made on the date of the audit report making the change or correction; and

(b) The date on which an original or amended return is accepted by the Internal Revenue Service or other state taxing authority is the date the original or amended return is filed if the return is subsequently accepted by the Internal Revenue Service or other state taxing authority.

(4) The provisions of ORS 305.305 shall constitute the exclusive remedy of a person whose notice of deficiency or assessment is based upon a change or correction of the person’s taxable income under this section. [1957 c.632 §11 (enacted in lieu of 316.565 and 317.380); 1963 c.509 §1; 1985 c.602 §3; 1989 c.414 §7; 1997 c.100 §2; 1999 c.74 §1; 2001 c.9 §4]

314.385 Form of returns; time for filing; alternative filing formats; rules. (1)(a) For purposes of ORS chapter 316, returns shall be filed with the Department of Revenue on or before the due date of the corresponding federal return for the tax year as prescribed under the Internal Revenue Code and the regulations adopted pursuant thereto, except that the final return of a decedent shall be filed at any time following the death of the decedent, to and including the 15th day of the fourth month after expiration of the regular tax year of the decedent.

(b) For purposes of ORS chapters 317 and 318, returns shall be filed with the department on or before the 15th day of the month following the due date of the corresponding federal return for the tax year, as prescribed under the Internal Revenue Code and the regulations adopted pursuant thereto.

(c) The department may allow further time for filing returns equal in length to the extension periods allowed under the Internal Revenue Code and its regulations.

(d) If no return is required to be filed for federal income tax purposes, the due date or extension period for a return shall be the same as the due date, or extension period, would have been if the taxpayer had been required to file a return for federal income tax purposes for the tax year. However, the due date for returns filed for purposes of ORS chapter 317 or 318 shall be on or before the 15th day of the month following what would have been the federal return due date for the tax year.

(2) There shall be annexed to the return a statement verified as provided under ORS 305.810 by a declaration of the taxpayer making the return to the effect that the statements contained therein are true.

(3) Returns shall be in such form as the department may, from time to time, prescribe. The department shall prepare blank forms for the returns and distribute them throughout the state. Such forms shall be furnished the taxpayer upon request, but failure to receive or secure a form shall not relieve the taxpayer from the obligation of making any return required by law.

(4)(a) The department may by rule authorize the filing of a return in alternative formats to those described in subsection (3) of this section and may prescribe the conditions, requirements and technical standards for a filing under this subsection.

(b) Notwithstanding subsections (1) to (3) of this section, the department may by rule prescribe a different due date for a return filed in an alternative format.

(c) The policy of the Legislative Assembly in granting the department rulemaking authority under paragraph (b) of this subsection is to have the department prescribe due dates that mirror the due dates that apply to federal returns filed in alternative formats for federal tax purposes. [1957 c.632 §12 (enacted in lieu of 316.545 and 317.355); 1959 c.156 §1; last sentence of subsection (1) derived from 1959 c.156 §3; 1963 c.281 §1; 1987 c.293 §59a; 1989 c.625 §55; 1991 c.457 §17a; 1997 c.84 §1; 1997 c.839 §56; 2003 c.77 §10a]

314.395 Time for payment of tax; interest on delayed return. (1) The tax shall be paid to the Department of Revenue at the time fixed by ORS 314.385 for filing the return without regard to extensions.

(2) When the time for filing a return of income is extended at the request of the taxpayer, interest at the rate established under ORS 305.220 for each month or fraction of a month from the time the return was originally required to be filed to the time of payment shall be added and paid. [1969 c.166 §2; 1971 c.354 §3; 1973 c.402 §17; 1975 c.593 §13; 1980 c.20 §24; 1982 s.s.1 c.16 §6; 1987 c.293 §59b]

314.397 Manner of payment. The tax may be paid with uncertified check under any rules as the Department of Revenue shall adopt, but if a check so received is not paid by the financial institution on which it is drawn, the taxpayer by whom the check is tendered remains liable for the payment of the tax and for all legal penalties the same as if the check had not been tendered. [1989 c.625 §61 (enacted in lieu of 316.407); 1997 c.631 §451]

314.400 Penalty for failure to file report or return or to pay tax when due; interest; limitation on penalty. (1) If a taxpayer fails to file a report or return or fails to pay a tax by the date on which the filing or payment is due, the Department of Revenue shall add to the amount required to be shown as tax on the report or return a delinquency penalty of five percent of the amount of the unpaid tax.

(2) In the case of a report or return that is required to be filed annually or for a one-year period, if the failure to file the report or return continues for a period in excess of three months after the due date:

(a) There shall be added to the amount of tax required to be shown on the report or return a failure to file penalty of 20 percent of the amount of the tax; and

(b) Thereafter the department may send a notice and demand to the person to file a report or return within 30 days of the mailing of the notice. If after the notice and demand no report or return is filed within the 30 days, the department may determine the tax according to the best of its information and belief, assess the tax with appropriate penalty and interest plus an additional penalty of 25 percent of the tax deficiency determined by the department and give written notice of the determination and assessment to the person required to make the filing.

(3) In the case of a report or return that is required to be filed more frequently than annually and the failure to file the report or return continues for a period in excess of one month after the due date:

(a) There shall be added to the amount of tax required to be shown on the report or return a failure to file penalty of 20 percent of the amount of the tax; and

(4) Notwithstanding subsections (2) and (3) of this section, if a taxpayer is required to file a federal income tax return for a period of less than 12 months under section 443 of the Internal Revenue Code, the Oregon personal income or corporate excise or income tax return required to be filed for that period shall be subject to subsection (2) of this section.

(5) If a report or return that is subject to a failure to file penalty described in subsection (2) or (3) of this section is filed before a notice of determination and assessment is issued by the department, the failure to file penalty referred to in subsection (2)(a) or (3)(a) of this section shall be added to the amount of tax shown on the report or return.

(6) A penalty equal to 100 percent of any deficiency determined by the department shall be assessed and collected if:

(a) There is a failure to file a report or return with intent to evade the tax;

(b) A report or return was falsely prepared and filed with intent to evade the tax; or

(7) Interest shall be collected on the unpaid tax at the rate established under ORS 305.220 for each month or fraction of a month, computed from the time the tax became due, during which the tax remains unpaid.

(8) Each penalty imposed under this section is in addition to any other penalty imposed under this section. However, the total amount of penalty imposed under this section and ORS 305.265 (13) with respect to any deficiency shall not exceed 100 percent of the deficiency.

(9) For purposes of subsections (1) to (3) of this section, the amount of tax required to be shown or that is shown on the report or return shall be reduced by the amount that is paid on or before the date prescribed for payment of the tax and by the amount of any credit against the tax that is claimed on the report or return. If the amount required to be shown as tax on the report or return is less than the amount that is actually shown as tax on the report or return, this subsection shall be applied by substituting the lower amount.

(10) Notwithstanding subsection (1) of this section, the five percent penalty for failure to file a report or return or pay a tax at the time the tax becomes due may not be imposed if:

(a) The taxpayer pays the full amount of the tax plus accrued interest within 30 days of the date shown on the department’s notice sent to the taxpayer; and

(b)(A) The taxpayer had filed an amended individual tax return or an amended corporate return of income or excise tax accompanied by less than full payment of the tax shown on the return plus accrued interest; or

(B) The department issues a notice of tax deficiency to the taxpayer under ORS 305.265. [1971 c.354 §2; 1975 c.593 §14; 1977 c.870 §41; 1980 c.7 §25; 1981 c.724 §4; 1982 s.s.1 c.16 §7; 1985 c.602 §4; 1987 c.158 §48a; 1993 c.726 §13; 1995 c.780 §5; 1997 c.170 §26; 2005 c.335 §1; 2007 c.322 §1]

Note: Section 3 (1), chapter 322, Oregon Laws 2007, provides:

Sec. 3. (1) The amendments to ORS 314.400 by section 1 of this 2007 Act apply to reports or returns required to be filed on or after January 1, 2008. [2007 c.322 §3(1)]

314.401 De minimis tax payment not required. Notwithstanding ORS 314.395 and 314.400, if the balance of tax due as shown on the report or return filed by the taxpayer for the tax year is less than $1, payment of the amount shown shall not be required. [1999 c.73 §2]

314.402 Understatement of taxable income; penalty; waiver of penalty. (1) If the Department of Revenue determines that there is a substantial understatement of taxable income for any taxable year under any law imposing a tax on or measured by net income, there shall be added to the amount of tax required to be shown on the return a penalty equal to 20 percent of the amount of any underpayment of tax attributable to the understatement of taxable income.

(2) A substantial understatement of taxable income exists for any taxable year if the amount of the understatement for the taxable year exceeds:

(a) Except as provided in paragraph (b) of this subsection, $15,000.

(b) In the case of a corporation other than an S corporation, as defined in section 1361 of the Internal Revenue Code, or a personal holding company, as defined in section 542 of the Internal Revenue Code, $25,000.

(3) In the case of any item attributable to an abusive tax shelter:

(a) No reduction of the amount of the understatement shall be made with regard to that item regardless of the existence of substantial authority for the treatment of the item by the taxpayer.

(b) No reduction of the amount of the understatement shall be made with regard to that item regardless of the disclosure of the facts affecting the tax treatment of the item unless, in addition to the disclosure, the taxpayer reasonably believed that the tax treatment of the item was more likely than not the proper treatment.

(4) As used in this section:

(a) “Abusive tax shelter” means any partnership, corporation or other organization or entity, any investment plan or arrangement or any other plan or arrangement, which has as its principal purpose the evasion or improper avoidance of federal or state income tax. “Abusive tax shelter” includes any investment or activity in connection with which tax benefits derived by investors are not clearly intended under the tax laws or any investment or activity that involves little or no economic reality, making use of unrealistic allocations of income or expenses, inflated appraisals of asset values, losses substantially in excess of investment, mismatching of income and expenses, financing techniques that do not conform to standard commercial business practice or mischaracterization of the substance of the investment or activity.

(b) “Understatement” means the excess of the amount of the taxable income required to be shown on the return for the taxable year over the amount of the taxable income which is shown on the return, reduced by any portion of the understatement that is attributable to:

(A) The tax treatment of any item by the taxpayer if there is or was substantial authority for such treatment; or

(B) Any item with respect to which:

(i) The relevant facts affecting the item’s tax treatment are adequately disclosed in the return or in a statement attached to the return; and

(ii) There is a reasonable basis for the tax treatment of the item by the taxpayer.

(5) The penalty imposed under this section is in addition to any other penalty imposed by law. A penalty imposed under this section shall be treated for all purposes as an additional deficiency subject to the provisions of ORS 305.265, but shall not bear interest.

(6) The department may waive all or any part of the penalty imposed under this section on a showing by the taxpayer that there was reasonable cause for the understatement, or any portion thereof, and that the taxpayer acted in good faith. [1987 c.843 §9; 1995 c.556 §25a]

314.403 Listed transaction understatement; penalty. (1) If a taxpayer has a listed transaction understatement for a tax year, there shall be added to the tax liability of the taxpayer for the tax year a penalty equal to 60 percent of the amount of the understatement.

(2) The penalty imposed under this section applies to listed transaction understatements discovered or reported on or after January 1, 2008, and is in addition to and not in lieu of any other penalty.

(3) As used in this section, “listed transaction understatement” means the sum of:

(a) The amount determined by multiplying the highest rate of tax imposed on the taxpayer under ORS chapter 316 or, if the taxpayer is a corporation, under ORS chapter 317 or 318, by any net increase in taxable income that results from a difference between the proper tax treatment of a listed transaction and the treatment of the transaction on the return of the taxpayer; and

(b) The amount of any decrease in the aggregate amount of credits determined for purposes of ORS chapter 316 or, if the taxpayer is a corporation, for purposes of ORS chapter 317 or 318, that results from the taxpayer’s treatment of a listed transaction and the proper tax treatment of that transaction.

(4) The Department of Revenue may by rule further define “listed transaction understatement” consistent with ORS 314.307 and subsection (3) of this section. [2007 c.568 §8]

Note: See note under 314.307.

314.404 Penalty for failure to report reportable transaction. (1) If a taxpayer fails to report to the Department of Revenue a reportable transaction as required by ORS 314.308, there shall be added to the tax liability of the taxpayer for the tax year a penalty as follows:

(a) Individual taxpayers, $3,300.

(b) Corporation taxpayers, $16,700.

(2) If the reportable transaction is a listed transaction, in lieu of the penalty provided in subsection (1) of this section, the penalty shall be as follows:

(a) Individual taxpayers, $33,000.

(b) Corporation taxpayers, $66,000.

(3) This section applies to tax years beginning on or after January 1, 2007. [2007 c.568 §9]

314.405 [1957 c.632 §13 (enacted in lieu of 316.605 and 317.405); 1959 c.212 §1; subsection (8) derived from 1959 c.212 §3; 1961 c.504 §1; 1965 c.554 §1; 1969 c.166 §3; 1969 c.493 §87; 1971 c.333 §1; 1971 c.354 §4; 1973 c.402 §29; 1975 c.593 §15; repealed by 1977 c.870 §22 (314.466 enacted in lieu of 314.405)]

314.406 Penalty for promotion of abusive tax shelter. (1) A penalty shall be imposed on a person who promotes a tax shelter if:

(a) The person is or would be subject to a penalty for promoting an abusive tax shelter under section 6700 of the Internal Revenue Code; and

(b) The tax shelter satisfies any of the following conditions:

(A) The tax shelter is organized in this state.

(B) The tax shelter is doing business in this state.

(D) At least one investor in the tax shelter is an Oregon personal income taxpayer or an Oregon corporate excise or income taxpayer.

(2) The amount of the penalty shall equal 100 percent of the amount of gross income derived by the person in promoting the tax shelter.

(3) A penalty imposed under this section shall be in addition to and not in lieu of any other penalty. [2007 c.568 §12]

Note: See note under 314.307.

COLLECTING DELINQUENT TAXES; LIENS; INTEREST AND ADDITIONS TO TAX; REFUNDS

314.407 Assessment of taxes owing but not submitted with return; time of assessment; recording of warrant. For the purposes of ORS 314.407 and 314.417 to 314.423:

(1) In the case of a return submitted to the Department of Revenue with payment of less than the amount of tax computed to be due, the difference between the tax computed to be owing by the taxpayer and the tax submitted with the return is considered as “assessed” on the due date of the return (determined with regard to any extension of time granted for the filing of the return) or the date the return is filed, whichever is later.

(2) The term “time of assessment” means:

(a) In the case of an assessment made under ORS 305.265 and 314.410, 30 days after the date the notice of assessment is mailed to the taxpayer;

(b) In the case of an assessment made under ORS 314.440, five days after the date the notice of assessment is mailed to the taxpayer; or

(c) In the case of a tax assessed as described in subsection (1) of this section, the due date of the return (determined with regard to any extension of time granted for the filing of the return) or the date the return is filed, whichever is later.

(3) Unless a warrant has been recorded in the County Clerk Lien Record in the county in which property is located, no warrant shall be considered as a lien with respect to that property. [1971 c.215 §2; 1977 c.870 §42; 1987 c.586 §39; 1995 c.79 §154]

314.410 Time limit for notice of deficiency; circumstances when claim for refund may be reduced after time limit; time limit for refund or notice of deficiency for pass-through entity items. (1) At any time within three years after the return was filed, the Department of Revenue may give notice of deficiency as prescribed in ORS 305.265.

(2) If the department finds that gross income equal to 25 percent or more of the gross income reported has been omitted from the taxpayer’s return, notice of the deficiency may be given at any time within five years after the return was filed.

(3) If the department finds that a return reports or reflects the use of a listed transaction, as defined in ORS 314.307, and that use of that listed transaction results in a deficiency in tax paid, notice of that deficiency may be given at any time within nine years after the return was filed.

(4)(a) The limitations to the giving of notice of a deficiency provided in this section do not apply to a deficiency resulting from false or fraudulent returns, or in cases where no return has been filed.

(b)(A) If the Commissioner of Internal Revenue or other authorized officer of the federal government or an authorized officer of another state’s taxing authority makes a change or correction as described in ORS 314.380 (2)(a)(A) and, as a result of the change or correction, an assessment of tax or issuance of a refund is permitted under any provision of the Internal Revenue Code or applicable law of the other state, or pursuant to an agreement between the taxpayer and the federal or other state taxing authority that extends the period in which an assessment of federal or other state tax may be made, then notice of a deficiency under any Oregon law imposing tax upon or measured by income for the corresponding tax year may be mailed within two years after the department is notified by the taxpayer or the commissioner or other tax official of the correction, or within the applicable period prescribed in subsections (1) to (3) of this section, whichever period expires later.

(B) A notice of deficiency mailed pursuant to this paragraph may assert any adjustment necessary to arrive at the correct amount of Oregon taxable income and Oregon tax liability for the tax year for which the federal or other state change or correction is made.

(c) If the taxpayer files an original or amended federal or other state return as described in ORS 314.380 (2)(a)(B), the department may reduce any claim for refund as a result of a change in Oregon tax liability related to the original or amended federal or other state return, but may not give notice of a deficiency for an adjustment to Oregon tax liability following the expiration of the applicable period prescribed in subsections (1) to (3) of this section and paragraph (a) of this subsection.

(5) The tax deficiency must be assessed and notice of tax assessment mailed to the taxpayer or authorized representative, who is authorized in writing, within one year from the date of the notice of deficiency unless an extension of time is agreed upon as prescribed in subsection (7) of this section.

(6) Notwithstanding other provisions of this section, the period for the assessment of any deficiency attributable to any part of the gain realized upon the sale or exchange of the taxpayer’s principal residence, as provided in section 1034 of the Internal Revenue Code (as in effect prior to the repeal of section 1034 of the Internal Revenue Code by the Taxpayer Relief Act of 1997 (P.L. 105-34)), does not expire prior to the expiration of three years from the date the department is notified by the taxpayer of:

(a) The cost of purchasing the new residence which the taxpayer claims results in nonrecognition of any part of such gain;

(b) The taxpayer’s intention not to purchase a new residence; or

(c) A failure to purchase a new residence within the period prescribed in section 1034 of the Internal Revenue Code (as in effect prior to the repeal of section 1034 of the Internal Revenue Code by the Taxpayer Relief Act of 1997 (P.L. 105-34)).

(7) If, prior to the expiration of any period of time prescribed in this section for giving of notice of deficiency or of assessment, the department and the taxpayer consent in writing to the notice of deficiency being mailed or deficiency being assessed after the expiration of such prescribed period, notice of such deficiency may be mailed or the deficiency assessed at any time prior to the expiration of the period agreed upon. The period so agreed upon may be extended by subsequent agreements in writing made before the expiration of the period agreed upon.

(8) In the case of a deficiency attributable to the application to the taxpayer of a net operating loss carryback, notice of such deficiency may be mailed at any time before the expiration of the period within which notice of a deficiency for the taxable year of the net operating loss which results in such carryback may be mailed.

(9) Notwithstanding the other provisions of this section, if any taxpayer agreed with the United States Commissioner of Internal Revenue or the taxing authority of another state for an extension, or renewals thereof, of the period for giving notices of deficiencies and assessing deficiencies in income tax for any year, the period for mailing notices of deficiencies of tax for such years and the period for filing a claim for refund under ORS 314.380 (2)(b) shall expire on the later of:

(a) The expiration of an applicable period described in subsections (1) to (8) or (10) of this section; or

(b) Six months after the date of the expiration of the agreed period for assessing a deficiency.

(10)(a) Notwithstanding the other provisions of this section and ORS 314.415, the period for claiming a refund or giving a notice of deficiency with respect to an item that is shown or required to be shown on a taxpayer’s return and that is attributable to a pass-through entity does not expire prior to three years from the date of the filing of the pass-through entity return to which the item on the taxpayer’s return relates.

(b) As used in this subsection, “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. [1957 c.632 §14 (enacted in lieu of 316.610 and 317.410); 1959 c.212 §2; 1959 c.591 §20; subsection (8) derived from 1959 c.212 §3 and 1959 c.591 §21; 1963 c.509 §2; 1963 c.627 §1 (referred and rejected); 1969 c.405 §1; 1969 c.493 §§88,88a; 1971 c.507 §1; 1977 c.870 §43; 1983 c.162 §53; 1985 c.602 §5; 1993 c.726 §14; 1997 c.100 §3; 1999 c.74 §3; 1999 c.90 §4a; 2001 c.9 §5; 2005 c.54 §1; 2007 c.568 §18]

314.412 Issuing of notice of deficiency attributable to involuntary conversion; time limit. Notwithstanding ORS 314.410, the period for issuing any notice of deficiency attributable to any part of the gain realized upon an involuntary conversion as provided in the federal Internal Revenue Code which applies to the Personal Income Tax Act of 1969 or as provided in the corporate excise tax or corporate income tax laws, shall not expire prior to the expiration of three years from the date the Department of Revenue is notified by the taxpayer of:

(1) The replacement of the converted property which the taxpayer claims results in nonrecognition of any part of such gains; or

(2) The taxpayer’s intention not to replace such property; or

(3) A failure of the taxpayer to replace the property within the period prescribed in the federal Internal Revenue Code which applies to the Personal Income Tax Act of 1969, in the corporation excise tax laws or in the corporation income tax laws, whichever is applicable. [1975 c.705 §2; 1989 c.626 §3]

314.415 Refunds; interest; credits. (1) If the Department of Revenue determines pursuant to ORS 305.270 that the amount of the tax due is less than the amount theretofore paid, the excess shall be refunded by the department with interest at the rate established under ORS 305.220, for each month or fraction of a month during a period beginning 45 days after the due date of the return or the date the tax was paid, whichever is the later, to the time the refund is made.

(2)(a) The department may not allow or make a refund after three years from the time the return was filed, or two years from the time the tax (or a portion of the tax) was paid, whichever period expires later, unless before the expiration of this period a claim for refund is filed by the taxpayer in compliance with ORS 305.270. In any case, if the original return is not filed within three years of the due date, excluding extensions, of the return, the department may allow or make a refund only of amounts paid within two years from the date of the filing of the claim for refund. If a refund is disallowed for the tax year during which excess tax was paid for any reason set forth in this subsection, the department may not allow the excess as a credit against any tax occurring on a return filed for a subsequent year.

(b) The department may not make a refund if the tax owed after offsets for all amounts owed the state, or a county pursuant to a judgment obtained under ORS 169.151, is less than $1.

(c) If a taxpayer would qualify under section 6511(h) of the Internal Revenue Code for a suspension of the running of the periods specified for filing a claim for refund of federal income tax, the period specified in paragraph (a) of this subsection shall also be suspended.

(d) The department may not pay an employee interest on a refund of a tax withheld by an employer if the interest would be for any period prior to the time the employee files a personal income tax return for the tax year involved or for any period prior to the day that is 45 days after the date when the employee’s annual return for that year was filed or was due, whichever is later.

(e) The department may not pay interest on a refund of estimated tax paid under ORS 314.505 to 314.525 or 316.557 to 316.589 if the interest would be for any period prior to the time the taxpayer files a tax return for the tax year involved or for any period prior to the day that is 45 days after the date when the tax return for that year was filed or was due, whichever is later.

(f) The amount of the refund, exclusive of interest on the refund, may not exceed the portion of the tax paid during the period preceding the filing of the claim or, if no claim is filed, then during the period preceding the allowance of the refund during which a claim might have been filed. Where there has been an overpayment of any tax imposed, the amount of the overpayment and interest on the overpayment shall be credited against any tax, penalty or interest then due from the taxpayer, and only the balance shall be refunded.

(g) Except as provided in ORS 305.265 (12), if, pursuant to a notice of deficiency or assessment, the taxpayer pays the amount specified in the notice, or any part thereof, and if, upon appeal, the Oregon Tax Court or the Oregon Supreme Court orders that all or any part of the deficiency amount specified in the notice and paid by the taxpayer be refunded, the amount so ordered to be refunded shall bear interest at the rate established for refunds in ORS 305.220. Interest shall be computed from the date of payment to the department. Nothing in this subsection shall require that interest be paid upon any amount for any period for which interest upon the same amount for the same period is required to be paid under ORS 305.419.

(3)(a) Notwithstanding any provision to the contrary in ORS 305.265 or 305.270 or subsection (1) or (2) of this section, if, prior to the expiration of the period prescribed in subsection (2) of this section, the department and the taxpayer consent in writing to the refund of tax after the expiration of the period prescribed:

(A) The department shall make the refund prior to the expiration of the period agreed upon; and

(B) The department may not make or allow a refund after the expiration of the period agreed upon unless a claim for refund is filed by the taxpayer before the expiration of the period agreed upon in compliance with the manner prescribed by the department. The period so agreed upon may be extended by subsequent agreements in writing made before the expiration of the period previously agreed upon.

(b) The department may consent to extend the period during which a refund may be made only if the taxpayer has consented to the assessment of additional tax, if additional taxes are determined upon audit, after the expiration of the applicable period prescribed in ORS 314.410 (1) to (3).

(4)(a) If the claim for credit or refund relates to an overpayment on account of the deductibility by the taxpayer, or by a partnership, of the worthlessness of a share of stock in a corporation, of the right to subscribe for or to receive a share of stock in a corporation, or of a debt, in lieu of the three-year period of limitation prescribed in subsection (2) of this section, the period shall be seven years from the date prescribed by law for the filing of the return for the year with respect to which the claim is made.

(b) If the claim described in paragraph (a) of this subsection is made after the expiration of the three-year period prescribed in subsection (2) of this section, the department may not allow interest with respect to any credit or refund determined to be due upon the claim for the period beginning at the close of the three-year period prescribed in subsection (2) of this section and ending at the expiration of six months after the date on which the claim is filed.

(5)(a) If the claim for credit or refund relates to an overpayment attributable to a net operating loss carryback or a net capital loss carryback, in lieu of the three-year period of limitation prescribed in subsection (2) of this section, the period shall be the period that ends three years after the time prescribed by law for filing the return (including extensions) for the taxable year of the net operating loss or net capital loss that results in such carryback. In the case of such a claim, the amount of the credit or refund may exceed the portion of the tax paid within the period provided in subsection (1), (2) or (3) of this section, whichever is applicable, to the extent of the amount of the overpayment attributable to the carryback. If the allowance of a credit or refund of an overpayment of tax attributable to a net operating loss carryback or a net capital loss carryback is otherwise prevented by the operation of any law or rule of law other than ORS 305.150, relating to closing agreements, the credit or refund may be allowed or made if the claim for credit or refund is filed within the period provided in this subsection. To the extent that the carryback was not an issue in any proceeding in which the determination of a court, including the Oregon Tax Court, has become final, the claimed credit or refund applicable to that carryback may be allowed or made under this subsection.

(b) For purposes of subsection (1) or (2) of this section, if any overpayment of tax results from a carryback of a net operating loss or net capital loss, the overpayment shall be deemed not to have been made prior to the later of:

(A) The due date of the return for the taxable year in which such net operating loss or net capital loss arises;

(B) The date the return for the year in which the net operating loss or net capital loss arises is filed; or

(6) Notwithstanding any provision to the contrary in ORS 305.265 or 305.270 or this section, if the taxpayer has agreed with the United States Commissioner of Internal Revenue for an extension, or a renewal of an extension, of the period for proposing and assessing deficiencies in federal income tax for any year, the period within which a claim for credit or refund may be filed or credit or refund allowed or made if no claim is filed shall be the period provided within subsections (1) to (5) of this section or six months after the date of the expiration of the agreed period for assessing deficiency in federal income tax, whichever period expires later.

(7) If a joint return is filed, the department may make separate refunds at the request of either spouse. The separate refunds shall bear the same proportion to the total refund as the adjusted gross income of each spouse bears to the adjusted gross income of both spouses, or as otherwise determined by the department.

(8) If a taxpayer entitled to a refund under subsection (1) of this section dies, the department may issue a draft for payment of such refund under the terms and conditions set out in ORS 293.490 to 293.500 exercising the same powers and subject to the same restrictions pursuant to which the State Treasurer is authorized to pay the amounts of warrants, checks or orders under those statutes. [1957 c.632 §15 (enacted in lieu of 316.615 and 317.415); 1969 c.166 §4; 1969 c.405 §2; 1971 c.354 §5; 1971 c.507 §2; 1975 c.593 §16; 1977 c.870 §44; 1982 s.s.1 c.16 §8; 1983 c.162 §54; 1985 c.61 §3; 1985 c.602 §6; 1985 c.603 §1; 1985 c.802 §19; 1987 c.293 §60; 1987 c.647 §1; 1989 c.626 §4; 1991 c.457 §17b; 1993 c.726 §16; 1995 c.650 §32; 1999 c.73 §4; 1999 c.90 §1a; 2001 c.641 §3; 2005 c.48 §1; 2005 c.210 §2; 2007 c.568 §20]

Note: Sections 2 and 3, chapter 605, Oregon Laws 2007, provide:

Sec. 2. (1) Notwithstanding ORS 305.270 or 314.415 or other law limiting the period of time within which a refund of personal income tax may be made, a taxpayer may file a claim for refund of tax paid for a tax year beginning on or after January 1, 2001, and before January 1, 2005, if the claim for refund is based on the inclusion within gross income of compensation described in ORS 316.791, for military service performed on or after September 11, 2001.

(2) The Department of Revenue shall refund amounts due for a claim described in subsection (1) of this section if the claim is allowable and the claim has been filed with the department before July 1, 2008. [2007 c.605 §2]

Sec. 3. Section 2 of this 2007 Act is repealed on January 2, 2010. [2007 c.605 §3]

314.417 Unpaid tax or withholding lien at time of assessment. If any person neglects or refuses to pay an income tax at the time of assessment, or fails to pay to the Department of Revenue any amount required to be withheld under ORS 316.167 and 316.172, the amount of the unpaid tax including interest and penalty thereon shall be a lien in favor of the State of Oregon upon all property and rights to property, whether real or personal, belonging to the person. The lien shall arise at the time of assessment or the time the amount withheld is to be paid to the department and the lien shall continue until the liability for the taxes, with interest and penalty, is satisfied. [1971 c.215 §3; 1981 c.546 §1]

314.419 Foreclosure of lien. In addition to any other remedy provided by law the lien created by ORS 314.417 may be foreclosed in the following manner:

(1) The Director of the Department of Revenue shall issue an order directed to the sheriff of the county in which the property or interest in property subject to the lien is located, describing the property subject to the lien, and commanding the sheriff to seize the property specified and sell it to pay the amount shown on the order to be due. In the discretion of the director an order of like terms, force and effect may be issued and directed to any agent authorized to collect income taxes, and in the execution thereof the agent shall have all the powers conferred by law upon sheriffs but is entitled to no fee or compensation in excess of actual expenses paid in the performance of such duty.

(2) If the property seized by the sheriff is personal property the sheriff shall utilize the procedures under ORS 311.640 to effect collection of the amount due.

(3) If the property seized by the sheriff is real property the sheriff shall proceed to sell the real property in the same manner that real property is sold under a writ of execution.

(4) Any property which has been sold under this section may be redeemed from the purchaser by the taxpayer or any junior lienor within 120 days from the date of the sale by paying to the purchaser the full purchase price paid plus an additional 20 percent of the purchase price.

(5) In any proceeding under this section to sell property to foreclose a lien, the taxpayer may claim any exemption to which the taxpayer is entitled under the laws of this state relating to property exempt from execution. [1971 c.215 §4]

314.420 [1957 c.632 §16 (enacted in lieu of 316.620, 317.370 and 317.420); 1969 c.166 §5; repealed by 1971 c.354 §7]

314.421 When lien valid. The lien imposed by ORS 314.417 shall not be valid as against any purchaser, holder of a security interest, mechanic’s lienor or judgment creditor until a warrant is issued and recorded under ORS 314.430. [1971 c.215 §5; 1987 c.586 §40]

314.423 Status of lien. (1) After a warrant has been recorded under ORS 314.430, the lien imposed by ORS 314.417 shall be subordinate to:

(a) Any interest in real property to the same extent that a judgment recorded in the County Clerk Lien Record under ORS 18.152 at the same time the warrant was recorded would be subordinate to the interest; and

(b) Any interest in personal property to the same extent that a security agreement filed under the Uniform Commercial Code at the same time the warrant was filed would be subordinate to the interest.

(2) After a warrant has been recorded under ORS 314.430, the lien imposed by ORS 314.417 shall not be valid as to a purchaser, security interest holder or lienholder in a sale, security agreement or lien arising out of the following types of property or property transactions unless the purchaser, security interest holder or lienholder had actual knowledge of the lien:

(a) Securities as defined in ORS 78.1020;

(b) Retail purchases in the ordinary course of business;

(d) Attorney’s liens;

(e) Insurance contract loans; or

(f) Passbook loans. [1971 c.215 §§6,7; 1987 c.586 §41; 1997 c.325 §36; 2003 c.576 §230]

314.425 Examining books, records or persons. (1) The Department of Revenue, for the purpose of ascertaining the correctness of any return or for the purpose of making an estimate of the taxable income of any taxpayer, may examine or cause to be examined by an agent or representative designated by it for the purpose, any books, papers, records or memoranda bearing upon the matter required to be included in the return, and may require the attendance of the taxpayer or officer or agent or any other person having knowledge in the premises, and may take testimony and require proof material for the information, with power to administer oaths to such persons. The department shall have authority, by order or subpoena to be served with the same force and effect and in the same manner that a subpoena is served in a civil action in the tax court, to require the production at any time and place it may designate of any books, papers, accounts or other information necessary to the carrying out of any law imposing tax on or measured by net income.

(2) If any person fails to comply with any subpoena or order of the department or to produce or permit the examination or inspection of any books, papers or documents pertinent to any investigation or inquiry under this section, or to testify to any matter regarding which the person may be lawfully interrogated, the department may apply to the tax court for the county in which the person resides for an order to the person to attend and testify, or otherwise comply with the demand or request of the department. The application to the court shall be by ex parte motion upon which the court shall make an order requiring the person against whom it is directed to comply with the request on demand of the department within 10 days after service of the order (or such further time as the court may grant) or to justify the failure within that time. The order shall be served upon the person to whom it is directed in the manner required by this state for service of process, which service shall be required to confer jurisdiction upon the court. Failure to obey any order issued by the court under this section is contempt of court. The remedy provided by this section shall be in addition to other remedies, civil or criminal, existing under the tax laws or other laws of this state. [1957 c.632 §17 (enacted in lieu of 316.625 and 317.425); 1995 c.650 §33]

314.430 Warrant for collection of taxes. (1) If any tax imposed under ORS chapter 118, 316, 317 or 318 or any portion of the tax is not paid within 30 days after the date that the written notice and demand for payment required under ORS 305.895 is mailed (or within five days after the tax becomes due, in the case of the termination of the tax year by the Department of Revenue under the provisions of ORS 314.440) and no provision is made to secure the payment thereof by bond, deposit or otherwise, pursuant to regulations promulgated by the department, the department may issue a warrant directed to the sheriff of any county of the state commanding the sheriff to levy upon and sell the real and personal property of the taxpayer found within that county, for the payment of the amount of the tax, with the added penalties, interest, collection charge and the sheriff’s cost of executing the warrant, and to return such warrant to the department and pay to it the money collected by virtue thereof by a time to be therein specified, not less than 60 days from the date of the warrant. A copy of the warrant shall be mailed or delivered to the taxpayer by the department at the taxpayer’s last-known address.

(2) The sheriff shall, within five days after the receipt of the warrant, record with the clerk of the county a copy thereof, and thereupon the clerk shall enter in the County Clerk Lien Record the name of the taxpayer mentioned in the warrant, and the amount of the tax or portion thereof and penalties for which the warrant is issued and the date when such copy is recorded. Thereupon the amount of the warrant so recorded shall become a lien upon the title to and interest in property of the taxpayer against whom it is issued in the same manner as a judgment duly recorded. The sheriff thereupon shall proceed upon the same in all respects, with like effect and in the same manner prescribed by law in respect to executions issued against property upon judgment of a court of record, and shall be entitled to the same fees for services in executing the warrant, to be added to and collected as a part of the warrant liability.

(3) In the discretion of the department a warrant of like terms, force and effect may be issued and directed to any agent authorized to collect taxes, and in the execution thereof the agent shall have all the powers conferred by law upon sheriffs, but is entitled to no fee or compensation in excess of actual expenses paid in the performance of such duty.

(4) If a warrant is returned not satisfied in full, the department shall have the same remedies to enforce the claim for taxes against the taxpayer as if the people of the state had recovered judgment against the taxpayer for the amount of the tax, and shall balance the assessment record of the taxpayer by transferring the unpaid deficiency to the taxpayer’s delinquent record. [1957 c.632 §18 (enacted in lieu of 316.630 and 317.430); 1959 c.74 §1; 1959 c.234 §1; 1975 c.593 §17; 1983 c.696 §12; 1985 c.85 §12; 1985 c.761 §15; 1987 c.586 §42; 1989 c.625 §62; 1997 c.99 §52]

314.432 [1989 c.1036 §2; 1995 c.53 §2; renumbered 305.182 in 1995]

314.434 [1989 c.1036 §3; 1995 c.53 §3; renumbered 305.184 in 1995]

314.435 [1957 c.632 §19 (enacted in lieu of 316.635 and 317.435); 1959 c.147 §1; repealed by 1961 c.573 §2 (305.140 enacted in lieu of 314.435, 315.635 and 321.085)]

314.440 Tax as debt; termination of taxable period and immediate assessment of tax. (1) Every tax imposed by any law imposing a tax upon or measured by net income, and all increases, interest and penalties thereon shall become, from the time such liability is incurred, a personal debt, due the State of Oregon, from the person or persons liable therefor.

(2) If the Department of Revenue finds that a taxpayer designs quickly to depart from the state or to remove the property of the taxpayer therefrom, or to do any other act tending to prejudice or to render wholly or partially ineffectual proceedings to collect the tax for any past tax year or the tax year then current unless such proceedings be brought without delay, the department shall declare the current taxable period for such taxpayer immediately terminated and shall cause notice of such finding and declaration to be given the taxpayer. Simultaneously, the department, on the basis of the best information available to it, shall assess a tax for such terminated period and for the preceding tax year (if no return has been filed therefor, whether or not the time otherwise allowed by law for filing such return and paying the tax has expired), and shall assess additional tax for any years open to assessment under the provisions of the applicable law. The department shall give notice to the taxpayer of all taxes so assessed. Such taxes shall thereupon become immediately due and payable as soon as the notice and findings are issued to the taxpayer or mailed to the last-known address of the taxpayer. In any proceeding in court brought to enforce payment of taxes made due and payable by virtue of the provisions of this section the findings of the department, made as provided in this section, whether made after notice to the taxpayer or not, shall be for all purposes presumptive evidence of the taxpayer’s design and the certificate of the department of the mailing or issuing of the notice and findings specified in this section is presumptive evidence that the notice and findings were mailed or issued. [1957 c.632 §20 (enacted in lieu of 316.640, 317.440 and 317.445)]

314.445 [1957 c.632 §21 (enacted in lieu of 316.650 and 317.455); 1959 c.234 §2; repealed by 1973 c.402 §30]

314.450 [Subsections (1) and (2) enacted as 1957 c.632 §22 (enacted in lieu of 316.655 and 317.460); subsection (3) enacted as 1957 c.545 §2; 1959 c.650 §1; 1969 c.520 §40; 1971 c.418 §11; repealed by 1973 c.402 §30]

314.455 [1957 c.632 §23 (enacted in lieu of 316.660 and 317.465); 1971 c.507 §3; repealed by 1977 c.870 §22 (314.466 enacted in lieu of 314.455)]

314.460 [1957 c.632 §24 (enacted in lieu of 316.665 and 317.470); 1961 c.533 §52; 1967 c.78 §2; 1975 c.381 §4; repealed by 1977 c.870 §22 (314.466 enacted in lieu of 314.460)]

314.465 [1957 c.632 §25 (enacted in lieu of 316.670 and 317.475); 1961 c.533 §53; repealed by 1977 c.870 §22 (314.466 enacted in lieu of 314.465)]

314.466 Audits, deficiencies, assessments, refunds and appeals governed by ORS chapter 305. The provisions of ORS chapter 305 as to the audit and examination of reports and returns, determination of deficiencies, assessments, claims for refund, conferences and appeals to the Oregon Tax Court, and the procedures relating thereto, shall apply to the determination of taxes, penalties and interest imposed under this chapter and ORS chapters 315, 316, 317 and 318, except where the context requires otherwise. [1977 c.870 §23 (enacted in lieu of 314.405, 314.455, 314.460 and 314.465); 1995 c.650 §34]

314.469 Treatment of moneys collected under ORS 314.406. Moneys collected under ORS 314.406 shall be considered net revenue from the tax imposed under ORS chapter 316 for purposes of ORS 316.502. [2007 c.568 §13]

Note: See note under 314.307.

314.470 [1957 c.632 §26 (enacted in lieu of 316.675 and 317.480); repealed by 1961 c.20 §1]

ESTIMATED TAX PROCEDURE

314.505 Estimate of tax liability by corporations; rules. (1) Every corporation expecting to have a tax liability under either ORS chapter 317 or 318 of $500 or more shall make an estimate of tax liability for the corporation’s tax year and pay the amount of tax determined as provided in ORS 314.515.

(2) The Department of Revenue shall by rule provide for the payment of estimated tax liability by a group of affiliated corporations filing a consolidated return.

(3) As used in ORS 314.505 to 314.525, the term “estimated tax liability” means the tax computed under ORS chapter 317 or 318 less the credits allowed for purposes of ORS chapter 317 or 318. [1973 c.292 §1; 1984 c.1 §16; 1993 c.730 §41; 1997 c.299 §5]

314.515 Installment schedule for payment of estimated tax. (1) A corporation required under ORS 314.505 to make payments of estimated tax shall make the payments to the Department of Revenue in installments as follows:

(a) One-quarter or more of the estimated tax shall be paid on or before the 15th day of the fourth month of the taxable year.

(b) One-quarter or more of the estimated tax shall be paid on or before the 15th day of the sixth month of the taxable year.

(c) One-quarter or more of the estimated tax shall be paid on or before the 15th day of the ninth month of the taxable year.

(d) The balance of the estimated tax shall be paid on or before the 15th day of the 12th month of the taxable year.

(2) Any payment of estimated tax received by the department for which the corporation has made no designation of the quarterly installment to which the payment is to be applied, shall first be applied to underpayments of estimated tax due for any prior quarter of the taxable year. Any excess amount shall be applied to the installment that next becomes due after the payment was received. [1973 c.292 §2; 1981 c.678 §4; 1985 c.603 §2]

314.518 Estimated tax payments by electronic funds transfer; phase-in; rules. (1) A corporation required to make a payment of estimated tax under ORS 314.505 to 314.525 shall make the payment by means of electronic funds transfer if:

(a) For payment periods beginning on or after July 1, 2001, and before January 1, 2002, the corporation’s annual total amount of estimated tax liability exceeds $50,000.

(b) For payment periods beginning on or after January 1, 2002, the corporation is required to make federal estimated tax payments electronically.

(2) The Department of Revenue may adopt rules that provide exemptions from the requirement that estimated tax 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 a corporation that is not required to pay by means of electronic funds transfer.

(4) As used in this section, “electronic funds transfer” has the meaning given that term in ORS 293.525. [1997 c.299 §4; 1999 c.21 §35; 2001 c.28 §5; 2001 c.114 §30]

314.520 State agency authority over certain electronic funds transfer payments. ORS 314.505, 314.518 and 316.198 do not alter the authority under ORS 293.525 of a state agency to require by rule that certain payments to the agency be made by electronic funds transfer. [1997 c.299 §6; 2001 c.114 §39; 2005 c.28 §2]

Note: 314.520 was enacted into law by the Legislative Assembly but was not added to or made a part of ORS chapter 314 or any series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation.

314.525 Underpayment of estimated tax; interest; nonapplicability of penalties. (1) An underpayment of estimated tax under ORS 314.505 to 314.525 will be considered to have occurred if the estimated tax is not paid as required.

(2) Notwithstanding subsection (1) of this section, there shall be no underpayment of estimated tax if the estimated tax paid equals or exceeds the amount described in any one of the following paragraphs:

(a) The amount which would be required to be paid if the estimated tax liability were equal to 100 percent of the tax shown on the return for the taxable year or, if no return was filed, 100 percent of the tax for such taxable year.

(b) The amount which would be required to be paid if the estimated tax liability were equal to 100 percent of the tax shown on the return for the preceding taxable year, and the preceding taxable year was a taxable year of 12 months.

(c)(A) An amount equal to 100 percent of the tax for the taxable year computed by placing on an annualized basis the taxable income:

(i) For the first three months of the taxable year, in the case of the installment required to be paid in the fourth month;

(ii) For the first three months or for the first five months of the taxable year, in the case of the installment required to be paid in the sixth month;

(iii) For the first six months or for the first eight months of the taxable year in the case of the installment required to be paid in the ninth month; and

(iv) For the first nine months or for the first 11 months of the taxable year, in the case of the installment required to be paid in the 12th month of the taxable year.

(B) For purposes of this paragraph the taxable income shall be placed on an annualized basis by:

(i) Multiplying by 12 the taxable income referred to in subparagraph (A) of this paragraph; and

(ii) Dividing the resulting amount by the number of months in the taxable year (3, 5, 6, 8, 9 or 11, as the case may be) referred to in subparagraph (A) of this paragraph.

(d) An amount equal to 100 percent of the amount obtained by applying section 6655(e) (3)(C) of the Internal Revenue Code to Oregon taxable income.

(e) An election made under section 6655(e) (2)(C) of the Internal Revenue Code (relating to annualization periods) for federal tax purposes shall also apply for purposes of estimated tax under ORS 314.505 to 314.525.

(3) Interest shall accrue on the underpayment of estimated tax under ORS 314.505 to 314.525 at the rate established under ORS 305.220, for each month or fraction thereof during which period the estimated tax or any installment thereof remains unpaid. The penalty provisions contained in this chapter and ORS chapters 317 and 318 for underpayment of tax shall not apply to underpayments of estimated tax under ORS 314.505 to 314.525.

(4) For purposes of subsection (3) of this section, the underpayment of estimated tax shall be the excess of:

(a) The amount of the installment which would be required to be paid if the estimated tax were equal to the lowest of the payments required under subsection (2) of this section (and allowed to be made by the taxpayer under subsection (5) of this section), over

(b) The amount, if any, of the installment paid on or before the last date prescribed for payment.

(5) In the case of a large corporation, subsection (2)(b) of this section shall apply only to determine the amount of the first required installment for any taxable year. Any reduction in the first installment by reason of this subsection shall be added to the amount of the next required installment determined without regard to subsection (2)(b) of this section. For purposes of this subsection, a “large corporation” is any corporation that had federal taxable income, determined without regard to any amount carried to any of the three taxable years under section 172 or 1212(a) of the Internal Revenue Code, of $1 million or more in any of the three taxable years immediately preceding the taxable year involved.

(6) The application of this section to taxable years of less than 12 months shall be in accordance with rules adopted by the Department of Revenue. [1973 c.292 §3; 1981 c.678 §5; 1982 s.s.1 c.16 §9; 1983 c.162 §78; 1985 c.603 §3; 1987 c.293 §61a; 1989 c.625 §63; 1995 c.556 §26; 1997 c.839 §57; 2001 c.660 §33]

DIVISION OF INCOME FOR TAX PURPOSES

(General Provisions)

314.605 Short title; construction. (1) ORS 314.605 to 314.675 may be cited as the Uniform Division of Income for Tax Purposes Act.

(2) ORS 314.610 to 314.670 shall be so construed as to effectuate its general purpose to make uniform the law of those states which enact it. [1965 c.152 §§20,21]

314.606 Status of ORS 314.605 to 314.675 when in conflict with Multistate Tax Compact. In any case in which the provisions of ORS 314.605 to 314.675 are inconsistent with the provisions of ORS 305.655, the provisions of ORS 314.605 to 314.675 shall control. [1993 c.726 §20]

314.610 Definitions for ORS 314.605 to 314.675. As used in ORS 314.605 to 314.675, unless the context otherwise requires:

(1) “Business income” means income arising from transactions and activity in the regular course of the taxpayer’s trade or business and includes income from tangible and intangible property if the acquisition, the management, use or rental, and the disposition of the property constitute integral parts of the taxpayer’s regular trade or business operations.

(2) “Commercial domicile” means the principal place from which the trade or business of the taxpayer is directed or managed.

(3) “Compensation” means wages, salaries, commissions and any other form of remuneration paid to employees for personal services.

(4) “Financial organization” means any financial institution or trust company, as those terms are defined in ORS 706.008, any industrial bank, land bank, safe deposit company, private banker, cooperative bank, investment company, or any type of insurance company.

(5) “Nonbusiness income” means all income other than business income.

(6) “Public utility” means any business entity whose principal business is ownership and operation for public use of any plant, equipment, property, franchise, or license for the transmission of communications, transportation of goods or persons, or the production, storage, transmission, sale, delivery, or furnishing of electricity, water, steam, oil, oil products or gas.

(7) “Sales” means all gross receipts of the taxpayer not allocated under ORS 314.615 to 314.645.

(8) “State” means any state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any territory or possession of the United States, and any foreign country or political subdivision thereof. [1965 c.152 §2; 1997 c.631 §452]

314.615 When allocation of income from business activity required. Any taxpayer having income from business activity which is taxable both within and without this state, other than activity as a financial organization or public utility or the rendering of purely personal services by an individual, shall allocate and apportion the net income of the taxpayer as provided in ORS 314.605 to 314.675. Taxpayers engaged in activities as a financial organization or public utility shall report their income as provided in ORS 314.280 and 314.675. [1965 c.152 §3; 2001 c.793 §6; 2001 c.933 §5]

314.620 When taxpayer is considered taxable in another state. For purposes of allocation and apportionment of income under ORS 314.280 and 314.605 to 314.675, a taxpayer is taxable in another state if:

(1) In that state the taxpayer is subject to a net income tax, a franchise tax measured by net income, a franchise tax for the privilege of doing business, or a corporate stock tax; or

(2) That state has jurisdiction to subject the taxpayer to a net income tax regardless of whether, in fact, the state does or does not. [1965 c.152 §4]

(Allocation of Nonbusiness Income)

314.625 Certain nonbusiness income to be allocated. Rents and royalties from real or tangible personal property, capital gains, interest, dividends, patent or copyright royalties, or prizes awarded by the Oregon State Lottery, to the extent that they constitute nonbusiness income, shall be allocated as provided in ORS 314.625 to 314.645. [1965 c.152 §5; 1995 c.79 §155; 1999 c.143 §1]

314.630 Allocation to this state of net rents and royalties. (1) Net rents and royalties from real property located in this state are allocable to this state.

(2) Net rents and royalties from tangible personal property are allocable to this state (a) if and to the extent that the property is utilized in this state, or (b) in their entirety if the taxpayer’s commercial domicile is in this state and the taxpayer is not organized under the laws of or taxable in the state in which the property is utilized.

(3) The extent of utilization of tangible personal property in a state is determined by multiplying the rents and royalties by a fraction, the numerator of which is the number of days of physical location of the property in the state during the rental or royalty period in the taxable year and the denominator of which is the number of days of physical location of the property everywhere during all rental or royalty periods in the taxable year. If the physical location of the property during the rental or royalty period is unknown or unascertainable by the taxpayer, tangible personal property is utilized in the state in which the property was located at the time the rental or royalty payer obtained possession. [1965 c.152 §6]

314.635 Allocation to this state of capital gains and losses. (1) Capital gains and losses from sales of real property located in this state are allocable to this state.

(2) Capital gains and losses from sales of tangible personal property are allocable to this state if (a) the property had a situs in this state at the time of the sale, or (b) the taxpayer’s commercial domicile is in this state and the taxpayer is not taxable in the state in which the property had a situs.

(3) Except in the case of the sale of a partnership interest, capital gains and losses from sales of intangible personal property are allocable to this state if the taxpayer’s commercial domicile is in this state.

(4) Gain or loss from the sale of a partnership interest is allocable to this state in the ratio of the original cost of partnership tangible property in the state to the original cost of partnership tangible property everywhere, determined at the time of the sale. In the event that more than 50 percent of the value of a partnership’s assets consists of intangibles, gain or loss from the sale of the partnership interest shall be allocated to this state in accordance with the sales factor of the partnership for its first full tax year immediately preceding its tax year during which the partnership interest was sold. [1965 c.152 §7; 1989 c.625 §64]

314.640 Allocation to this state of interest and dividends. Interest and dividends are allocable to this state if the taxpayer’s commercial domicile is in this state. [1965 c.152 §8]

314.642 Allocation to this state of lottery prizes. (1) Prizes awarded by the Oregon State Lottery are allocable to this state.

(2) A prize awarded by a multistate lottery association of which the Oregon State Lottery is a member is allocable to this state if the ticket upon which the prize is awarded was sold in this state. [1999 c.143 §2]

314.645 Allocation to this state of patent and copyright royalties. (1) Patent and copyright royalties are allocable to this state (a) if and to the extent that the patent or copyright is utilized by the payer in this state, or (b) if and to the extent that the patent or copyright is utilized by the payer in a state in which the taxpayer is not taxable and the taxpayer’s commercial domicile is in this state.

(2) A patent is utilized in a state to the extent that it is employed in production, fabrication, manufacturing, or other processing in the state or to the extent that a patented product is produced in the state. If the basis of receipts from patent royalties does not permit allocation to states or if the accounting procedures do not reflect states of utilization, the patent is utilized in the state in which the taxpayer’s commercial domicile is located.

(3) A copyright is utilized in a state to the extent that printing or other publication originates in the state. If the basis of receipts from copyright royalties does not permit allocation to states or if the accounting procedures do not reflect states of utilization, the copyright is utilized in the state in which the taxpayer’s commercial domicile is located. [1965 c.152 §9]

(Apportionment of Business Income)

314.647 Policy. The Legislative Assembly finds and declares it to be the policy of this state to carry out a comprehensive review of business income apportionment whenever federal legislation changes the nexus standard for state imposition of taxes based on business activity within state borders. [2001 c.793 §12]

Note: 314.647 was enacted into law by the Legislative Assembly but was not added to or made a part of ORS chapter 314 or any series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation.

314.650 Business income apportionment. (1) All business income shall be apportioned to this state by multiplying the income by the sales factor.

(2)(a) Notwithstanding subsection (1) of this section, the business income of a taxpayer that is in the forest products industry, that owns and manages 300,000 or more acres in this state, but less than 400,000 acres, and that processes at least 20 percent of the taxpayer’s total wood chip supply for papermaking from sawmill residue generated within this state, shall be apportioned to this state by multiplying the income by a fraction, the numerator of which is the property factor plus the payroll factor plus two times the sales factor, and the denominator of which is four.

(b) If the denominator of the property factor, payroll factor or sales factor, as determined under ORS 314.650 to 314.665, is zero, then the denominator specified in paragraph (a) of this subsection shall be reduced by the number of factors with a denominator of zero. [1965 c.152 §10; 1989 c.626 §5; 1989 c.1088 §1; 1995 c.79 §156; 2001 c.793 §1; 2003 c.739 §§1,5; 2005 c.832 §§48,49]

314.655 Determination of property factor. (1) As used in ORS 314.650, the property factor is a fraction, the numerator of which is the average value of the taxpayer’s real and tangible personal property owned or rented and used in this state during the tax period and the denominator of which is the average value of all the taxpayer’s real and tangible personal property owned or rented and used during the tax period.

(2) Property owned by the taxpayer is valued at its original cost. Property rented by the taxpayer is valued at eight times the net annual rental rate. Net annual rental rate is the annual rental rate paid by the taxpayer less any annual rental rate received by the taxpayer from subrentals.

(3) The average value of property shall be determined by averaging the values at the beginning and ending of the tax period but the Department of Revenue may require the averaging of monthly values during the tax period if reasonably required to reflect properly the average value of the taxpayer’s property. [1965 c.152 §§11,12,13; 2001 c.793 §3; 2001 c.933 §2]

314.660 Determination of payroll factor. (1) As used in ORS 314.650, the payroll factor is a fraction, the numerator of which is the total amount paid in this state during the tax period by the taxpayer for compensation, and the denominator of which is the total compensation paid everywhere during the tax period.

(2) Compensation is paid in this state if:

(a) The individual’s service is performed entirely within the state; or

(b) The individual’s service is performed both within and without the state, but the service performed without the state is incidental to the individual’s service within the state; or

(c) Some of the service is performed in the state and (A) the base of operations or, if there is no base of operations, the place from which the service is directed or controlled is in the state, or (B) the base of operations or the place from which the service is directed or controlled is not in any state in which some part of the service is performed, but the individual’s residence is in this state. [1965 c.152 §§14,15; 2001 c.793 §4; 2001 c.933 §3]

314.665 Determination of sales factor; inclusions and exclusions; definitions. (1) As used in ORS 314.650, the sales factor is a fraction, the numerator of which is the total sales of the taxpayer in this state during the tax period, and the denominator of which is the total sales of the taxpayer everywhere during the tax period.

(2) Sales of tangible personal property are in this state if:

(a) The property is delivered or shipped to a purchaser, other than the United States Government, within this state regardless of the f.o.b. point or other conditions of the sale; or

(b) The property is shipped from an office, store, warehouse, factory, or other place of storage in this state and the purchaser is the United States Government or the taxpayer is not taxable in the state of the purchaser. For purposes of this paragraph:

(A) The sale of goods shipped from a public warehouse is not considered to take place in this state if:

(i) The taxpayer’s only activity in Oregon is the storage of the goods in the public warehouse prior to shipment; or

(ii) The taxpayer’s only activities in Oregon are the storage of the goods in the public warehouse prior to shipment and the presence of employees within this state solely for purposes of soliciting sales of the taxpayer’s products; and

(B) “Taxpayer” means a taxpayer as defined in section 7701 of the Internal Revenue Code, an affiliate of the person storing goods in a public warehouse or a person that is related under section 267 of the Internal Revenue Code to the person storing goods in a public warehouse.

(3) Subsection (2)(b) of this section shall not apply to sales of tangible personal property if:

(a) The sales are included in the numerator of a formula used to apportion business income to another state of the United States, a foreign country or the District of Columbia; and

(b) The other state, a foreign country or the District of Columbia has imposed a tax on or measured by the apportioned business income.

(4) Sales, other than sales of tangible personal property, are in this state if (a) the income-producing activity is performed in this state; or (b) the income-producing activity is performed both in and outside this state and a greater proportion of the income-producing activity is performed in this state than in any other state, based on costs of performance.

(5) Where the sales apportionment factor is determined by administrative rule pursuant to ORS 314.682, 314.684, 317.660 or other law, the Department of Revenue shall adopt rules that are consistent with the determination of the sales factor under this section.

(6) For purposes of this section, “sales”:

(a) Excludes gross receipts arising from the sale, exchange, redemption or holding of intangible assets, including but not limited to securities, unless those receipts are derived from the taxpayer’s primary business activity.

(b) Includes net gain from the sale, exchange or redemption of intangible assets not derived from the primary business activity of the taxpayer but included in the taxpayer’s business income.

(c) Excludes gross receipts arising from an incidental or occasional sale of a fixed asset or assets used in the regular course of the taxpayer’s trade or business if a substantial amount of the gross receipts of the taxpayer arise from an incidental or occasional sale or sales of fixed assets used in the regular course of the

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Oregon Chapter 314

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