US Laws, Codes, Statutes & Cases

Chapter 315 — Personal and Corporate Income or Excise Tax Credits

 

2007 EDITION

 

INCOME OR EXCISE TAX CREDITS

 

REVENUE AND TAXATION

 

GENERAL PROVISIONS

 

315.004     Definitions; adoption of parts of Internal Revenue Code and application of federal laws and regulations; technical corrections

 

315.054     Federal tax credits allowable only as specified

 

315.063     Waiver of substantiation by Department of Revenue; rules

 

315.068     Claim of right income repayment adjustments

 

AGRICULTURE; FISHERIES; FORESTRY

 

315.104     Reforestation; rules

 

315.106     Reforestation credit preliminary certificate; application; limitation calculation; rules; fee

 

315.108     Annual reforestation credit cost limitation

 

315.111     Legislative declarations regarding riparian land conservation

 

315.113     Voluntary removal of riparian land from farm production; rules

 

315.117     Legislative findings and declarations regarding on-farm processing

 

315.119     On-farm processing facilities

 

315.123     Minimum production and processing volume requirements; recordkeeping requirements

 

315.134     Fish habitat improvement

 

315.138     Screening devices, by-pass devices or fishways; rules

 

315.141     Biomass production or collection

 

315.144     Transfer of biomass credit

 

315.154     Definitions for crop donation credit

 

315.156     Crop donation; forms

 

315.163     Definitions for ORS 315.163 to 315.172

 

315.164     Farmworker housing projects; rules

 

315.167     Farmworker housing credit application; procedure; limitation; rules

 

315.169     Farmworker housing contributor credit; transfer of farmworker housing owner or operator credit; continued eligibility; rules

 

315.172     Collection of taxes upon disallowance of farmworker housing credit

 

CHILDREN AND FAMILIES; POVERTY RELIEF

 

315.204     Dependent care assistance; rules

 

315.208     Dependent care facilities

 

315.213     Child Care Division contributions

 

315.237     Employee and dependent scholarship program payments

 

315.254     Youth apprenticeship sponsorship

 

315.259     First Break Program; rules

 

315.262     Working family child care; rules

 

315.266     Earned income; rules

 

315.271     Individual development accounts

 

315.272     Certain individual development account withdrawals

 

315.274     Qualified adoption expenses

 

ENVIRONMENT AND ENERGY

 

315.304     Pollution control facilities

 

315.311     Emission reducing production technology or process

 

315.324     Plastics recycling

 

315.354     Energy conservation facilities

 

315.356     Other grants as offset to cost of energy conservation facility; changes in credit eligibility when taxpayer participates in other programs

 

(Temporary provisions relating to low emission truck engines are compiled as notes following ORS 315.356)

 

(Temporary provisions relating to diesel engines are compiled as notes following ORS 315.356)

 

315.357     Time limit applicable to energy conservation tax credit

 

315.465     Biofuels and fuel blends

 

315.469     Biodiesel used in home heating

 

ECONOMIC DEVELOPMENT

 

315.507     Electronic commerce in designated enterprise zone

 

315.508     Recordkeeping requirements for electronic commerce credit; disallowance of credit

 

315.511     Advanced telecommunications facilities

 

315.514     Film production development contributions; rules

 

315.517     Water transit vessels

 

315.521     University venture development fund contributions

 

HEALTH

 

315.604     Bone marrow donor expense

 

315.610     Long term care insurance

 

315.613     Credit available to persons providing rural medical care and affiliated with certain rural hospitals

 

315.616     Additional providers who may qualify for credit

 

315.619     Credit for medical staff at type C hospital

 

315.622     Rural emergency medical technicians

 

315.624     Medical care to residents of Oregon Veterans’ Home

 

315.628     Health care services under TRICARE contract

 

315.631     Certification of health care providers; reports

 

CULTURE

 

315.675     Trust for Cultural Development Account contributions

 

      315.001 [Enacted as 1953 c.308 §1; repealed by 1965 c.26 §6]

 

      315.002 [Enacted as 1953 c.308 §2; repealed by 1965 c.26 §6]

 

      315.003 [Enacted as 1953 c.308 §3; repealed by 1965 c.26 §6]

 

GENERAL PROVISIONS

 

      315.004 Definitions; adoption of parts of Internal Revenue Code and application of federal laws and regulations; technical corrections. (1) Except when the context requires otherwise, the definitions contained in ORS chapters 314, 316, 317 and 318 are applicable in the construction, interpretation and application of the personal and corporate income and excise tax credits contained in this chapter.

      (2)(a) For purposes of the tax credits contained in this chapter, 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 for purposes of construing, interpreting and applying the credit.

      (b) With respect to the tax credits contained in this chapter, 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.

      (3) Insofar as is practicable in the administration of this chapter, the Department of Revenue 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. [1993 c.730 §2; 1995 c.556 §34; 1997 c.839 §64; 1999 c.90 §7; 2001 c.660 §34; 2003 c.77 §11; 2005 c.832 §24; 2007 c.614 §11]

 

      315.005 [Repealed by 1965 c.26 §6]

 

      315.010 [Amended by 1953 c.325 §3; repealed by 1965 c.26 §6]

 

      315.015 [Repealed by 1965 c.26 §6]

 

      315.020 [Repealed by 1965 c.26 §6]

 

      315.025 [Repealed by 1965 c.26 §6]

 

      315.030 [Repealed by 1965 c.26 §6]

 

      315.035 [Repealed by 1965 c.26 §6]

 

      315.040 [Repealed by 1965 c.26 §6]

 

      315.045 [Repealed by 1965 c.26 §6]

 

      315.054 Federal tax credits allowable only as specified. No credits applied directly to the income tax calculated for federal purposes pursuant to the Internal Revenue Code shall be applied in calculating the tax due under ORS chapter 314, 316, 317 or 318 except those prescribed in this chapter or ORS chapter 314, 316, 317 or 318. [1993 c.730 §4 (enacted in lieu of 316.107)]

 

      315.055 [Repealed by 1965 c.26 §6]

 

      315.060 [Repealed by 1965 c.26 §6]

 

      315.063 Waiver of substantiation by Department of Revenue; rules. The Department of Revenue, by rule, may waive partially, conditionally or absolutely requirements for proof or substantiation of claims for subtractions, exclusions, exemptions or credits allowable for purposes of taxes imposed upon or measured by net income. [1995 c.54 §2]

 

      315.065 [Repealed by 1965 c.26 §6]

 

      315.068 Claim of right income repayment adjustments. (1) A credit against the taxes otherwise due under ORS chapter 316 (or, if the taxpayer is a corporation, under ORS chapter 317 or 318) shall be allowed to a taxpayer for a claim of right income repayment adjustment.

      (2) The credit shall be allowed under this section only if the taxpayer’s federal tax liability is determined under section 1341(a) of the Internal Revenue Code.

      (3) The amount of the credit shall equal the difference between:

      (a) The taxpayer’s actual Oregon state tax liability for the tax year for which the claim of right income was included in gross income for federal tax purposes; and

      (b) The taxpayer’s Oregon state tax liability for that tax year, had the claim of right income not been included in gross income for federal tax purposes.

      (4) A credit under this section shall be allowed only for the tax year for which the taxpayer’s federal tax liability is determined under section 1341 of the Internal Revenue Code for federal tax purposes.

      (5) If the amount allowable as a credit under this section, when added to the sum of the amounts allowable as a payment of tax under ORS 314.505 to 314.525, 316.187 and 316.583, other payments of tax and other refundable credit amounts, exceeds the taxes imposed by ORS chapters 314 to 318 (reduced by any nonrefundable credits allowed for the tax year), the excess shall be treated as an overpayment of tax and shall be refunded or applied in the same manner as other tax overpayments.

      (6) As used in this section, “claim of right income” means:

      (a) An item included in federal gross income for a prior tax year because it appeared that the taxpayer had an unrestricted right to the item; and

      (b) An item for which the taxpayer’s federal tax liability is adjusted under section 1341 of the Internal Revenue Code because the taxpayer did not have an unrestricted right to the item of gross income. [1999 c.1007 §2; 2001 c.660 §19]

 

      315.070 [Repealed by 1965 c.26 §6]

 

      315.075 [Repealed by 1965 c.26 §6]

 

      315.080 [Repealed by 1965 c.26 §6]

 

      315.085 [Repealed by 1965 c.26 §6]

 

      315.090 [Repealed by 1965 c.26 §6]

 

      315.095 [Repealed by 1965 c.26 §6]

 

AGRICULTURE; FISHERIES; FORESTRY

 

      315.104 Reforestation; rules. (1) A credit against the taxes otherwise due under ORS chapter 316 (or if the taxpayer is a corporation, under ORS chapter 317 or 318) shall be allowed in an amount equal to 50 percent of reforestation project costs actually paid or incurred to reforest underproductive Oregon forestlands. Such costs include, but are not limited to, any fees established by the State Forester under ORS 315.106 (4), site preparation, tree planting and other silviculture treatments considered necessary by the State Forester to establish commercial, hardwood or softwood stands on appropriate sites. Subject to subsection (5) of this section:

      (a) One-half of the credit shall be taken in the tax year for which the State Forester, after physical inspection of the forestland, issues a preliminary certificate under ORS 315.106 certifying that the land qualifies as underproductive Oregon forestland and that the reforestation project undertaken meets the requirements of this section and the specifications established by the State Forester and the costs appear to be reasonable; and

      (b) One-half of the credit shall be taken in the tax year for which the State Forester, after further physical inspection of the land and project, certifies that the new forest is established in accordance with the specifications of the State Forester.

      (2) No credit shall be allowed under either subsection (1)(a) or (b) of this section unless written certification containing the following statements accompanies the claim for the credit or is otherwise filed with the Department of Revenue:

      (a) A preliminary certificate issued by the State Forester under ORS 315.106 that the land and project meet the preliminary specifications established by the State Forester or that the new forest is established, whichever is applicable at the time.

      (b) A statement by the landowner or person in possession of the land that the land within the project area will be used for the primary purpose of growing and harvesting trees of an acceptable species.

      (c) A statement that the landowner or person in possession of the land is aware that maintenance practices, including release, may be needed to insure that a new forest is established and will remain established.

      (3) For purposes of this section, reforestation project costs shall not include:

      (a) Costs paid or incurred to reforest any forestland that has been commercially logged to the extent that reforestation is required under the Oregon Forest Practices Act, except costs paid or incurred to reforest forestland following a hardwood harvest, conducted for the purposes of converting underproductive forestlands, as determined by administrative rule.

      (b) That portion of costs or expenses paid through a federal or state cost share, financial assistance or other incentive program.

      (c) Those costs paid or incurred to grow Christmas trees, ornamental trees, shrubs or plants, or those costs paid or incurred to grow hardwood timber described under ORS 321.267 (3) or 321.824 (3).

      (d) Any costs paid or incurred to purchase or otherwise acquire the land.

      (e) The cost of purchase or other acquisition of tools and equipment with a useful life of more than one year.

      (4) To qualify for the credit:

      (a) The project must be completed to specifications approved by the State Forester.

      (b) The taxpayer’s portion of the project costs must be $500 or more.

      (c) The taxpayer must be a private individual, corporation, group, Indian tribe or other native group, association or other nonpublic legal entity owning, purchasing under recorded contract of sale or leasing at least five acres of Oregon commercial forestland.

      (d) Prior to December 31, 2022, the taxpayer must file with the State Forester a written request for preliminary certification under ORS 315.106.

      (5) Any tax credit otherwise allowable under this section which is not used by the taxpayer in a particular year may be carried forward and offset against the taxpayer’s tax liability for the next succeeding tax year. Any credit remaining unused in such next succeeding tax year may be carried forward and used in the second succeeding tax year, and likewise, any credit not used in that second succeeding tax year may be carried forward and used in the third succeeding tax year, but may not be carried forward for any tax year thereafter. In all cases the taxpayer must be the person who made the investment into the project.

      (6) The credit provided by this section shall be in addition to and not in lieu of any depreciation or amortization deduction to which the taxpayer otherwise may be entitled with respect to the reforestation project and the credit shall not affect the computation of basis for the property.

      (7) In compliance with ORS chapter 183, the Department of Revenue and the State Forestry Department may adopt rules consistent with law for carrying out the provisions of this section.

      (8) As used in this section, “underproductive Oregon forestlands” means Oregon commercial forestlands not meeting the minimum stocking standards of the Oregon Forest Practices Act.

      (9) If, for any reason other than those specified in subsection (10) of this section, a new forest is not established by the last day of the second taxable year following the taxable year for which the preliminary certificate was issued, the State Forester shall so report to the Department of Revenue. The report filed under this subsection shall be the basis for the department to recover any credit granted under subsection (1)(a) of this section. If, however, the new forest is not established within the time required by this subsection on account of the reasons specified in subsection (10) of this section, any credit allowed under subsections (1)(a) and (5) of this section shall not be recovered but no further credit as provided under subsections (1)(b) and (5) of this section shall be allowed.

      (10) Subject to requalification under this section in the manner applicable for the original claim, including obtaining a new preliminary certificate, a taxpayer may claim an additional credit or credits for reestablishing a new planting in the event that the new forest is destroyed by a natural disaster or is not established for reasons beyond the control of the taxpayer, if the measures taken in completing the original or earlier project would normally have resulted in establishing the minimum number of trees per acre anticipated by the project.

      (11) Any owner affected by a determination, regarding the reforestation tax credit made by:

      (a) The State Forester, except for a denial of a request for a preliminary certificate due to the annual reforestation credit cost limitation calculated under ORS 315.108, may appeal that determination in the manner provided for in ORS 526.475 (1).

      (b) The Department of Revenue, may appeal that determination in the manner provided for in ORS 526.475 (2). [1993 c.730 §8 (enacted in lieu of 316.094, 317.102 and 318.110); 1995 c.746 §23; 2001 c.359 §1; 2003 c.454 §122; 2003 c.621 §97a; 2007 c.883 §1]

 

      Note: Section 2, chapter 883, Oregon Laws 2007, provides:

      Sec. 2. The amendments to ORS 315.104 by section 1 of this 2007 Act apply to tax credits claimed for tax years beginning on or after January 1, 2008. [2007 c.883 §2]

 

      Note: Section 5, chapter 605, Oregon Laws 1987, provides:

      Sec. 5. No tax credit shall be allowed under ORS 315.104 based upon reforestation project costs if the preliminary certificate is not issued on or before December 31, 2011. [1987 c.605 §5; 1989 c.887 §4; 1995 c.746 §28; 2001 c.359 §3]

 

      Note: 315.104 is repealed January 2, 2028. See section 9, chapter 883, Oregon Laws 2007.

 

      315.105 [Repealed by 1965 c.26 §6]

 

      315.106 Reforestation credit preliminary certificate; application; limitation calculation; rules; fee. (1) A taxpayer claiming the credit provided under ORS 315.104 shall file a written request with the State Forester for a preliminary certificate. The request shall contain:

      (a) Information that is required by the State Forester by rule;

      (b) An estimate of the amount of the credit the taxpayer expects to claim under ORS 315.104 (1)(a); and

      (c) Payment of any fee required by the State Forester by rule adopted under subsection (4) of this section.

      (2) The State Forester shall consider requests for preliminary certificates in the chronological order in which the requests are filed with the State Forester. If the State Forester determines that the request complies with ORS 315.104 (1)(a), the State Forester shall issue the preliminary certificate to the taxpayer, to the extent the total amount of estimated claims for credit under ORS 315.104 (1)(a) for all preliminary certificates issued for the calendar year do not exceed the annual reforestation credit cost limitation calculated under ORS 315.108.

      (3) The State Forester may not issue a preliminary certificate to a taxpayer to the extent the estimated claim for credit under ORS 315.104 (1)(a) contained in the request for a preliminary certificate, when added to the total of estimated claims for credit under ORS 315.104 (1)(a) for all preliminary certificates issued by the State Forester for the calendar year, exceeds the annual reforestation credit cost limitation calculated under ORS 315.108.

      (4) The State Forester shall establish by rule a fee for filing a written request for a preliminary certificate under this section. The fee shall be adequate to recover the costs incurred by the State Forestry Department in administering the reforestation tax credit program established under this section and ORS 315.104 and 315.108.

      (5) Moneys collected from fees established by the State Forester under rules adopted under this section shall be deposited in the State Forestry Department Account to be used for the purposes of administering the reforestation tax credit program. [1995 c.746 §25; 2005 c.796 §3]

 

      Note: 315.106 is repealed January 2, 2028. See section 9, chapter 883, Oregon Laws 2007.

 

      315.108 Annual reforestation credit cost limitation. (1) On or before January 1, 1996, the State Forester shall determine an average annual amount of estimated reforestation project costs for which credit was claimed under ORS 315.104 (1)(a) during the period from July 1, 1992, to July 1, 1994.

      (2) The annual reforestation credit cost limitation shall be:

      (a) Equal to the average annual amount of estimated reforestation project costs determined under subsection (1) of this section for the calendar year beginning January 1, 1996.

      (b) Twice the average annual amount of estimated reforestation project costs determined under subsection (1) of this section for years beginning on or after January 1, 1997. [1995 c.746 §26]

 

      Note: 315.108 is repealed January 2, 2028. See section 9, chapter 883, Oregon Laws 2007.

 

      315.110 [Amended by 1953 c.665 §2; repealed by 1965 c.26 §6]

 

      315.111 Legislative declarations regarding riparian land conservation. The Legislative Assembly declares that the purpose of ORS 315.113 is to encourage taxpayers that have riparian land in farm production to voluntarily remove the riparian land from farm production and employ conservation practices applicable to the riparian land that minimize contributions to undesirable water quality, habitat degradation and stream bank erosion. [2001 c.912 §2]

 

      315.113 Voluntary removal of riparian land from farm production; rules. (1) As used in this section:

      (a) “Crop” means the total yearly production of an agricultural commodity, not including livestock, that is harvested from a specified area.

      (b) “Riparian land” means land in this state that:

      (A) Borders both a river, stream or other natural watercourse and land that is in farm production; and

      (B) Does not exceed a width of 35 feet between the land that is in farm production and the bank of the river, stream or other natural watercourse.

      (c) “Share-rent agreement” means an agreement in which the person who engages in farming operations and the person who owns the land where the farming operations are conducted share the crop grown on that land or the profits from that crop.

      (2) A taxpayer may claim a credit against the taxes otherwise due under ORS chapter 316, 317 or 318 for 75 percent of the market value of crops forgone when riparian land is voluntarily taken out of farm production.

      (3) A credit under this section may be claimed only if:

      (a) The taxpayer owns the riparian land that is the basis of the credit;

      (b) The taxpayer is actively engaged in farming operations on land adjacent to the riparian land;

      (c) The riparian land was in farm production for the previous tax year or a credit under this section was claimed during the previous tax year;

      (d) The conservation practices employed on the riparian land are consistent with the agricultural water quality management plan administered by the State Department of Agriculture in the applicable river basin management area; and

      (e) The decision to remove the riparian land from farm production was a voluntary decision and not the result of a federal, state or local law or government decision requiring the riparian land to be taken out of farm production. For purposes of this paragraph, action taken by a taxpayer under an agricultural water quality management plan administered by the State Department of Agriculture is not the result of a government decision requiring the land to be taken out of farm production.

      (4)(a) The amount of the credit shall be calculated by multiplying the market value per acre of the forgone crop by the acreage of the riparian land that is not in farm production and multiplying that product by 75 percent.

      (b) For the first tax year for which a credit is claimed under this section, the forgone crop for which a value is determined under this section shall be the crop grown on the land in the previous tax year.

      (c) For a tax year following the first tax year for which a credit is claimed under this section, the forgone crop for which a value is determined under this section shall be the crop for which the value was determined for the previous tax year.

      (d) If a taxpayer does not claim a credit under this section for a tax year, any credit claimed in a subsequent tax year shall be treated as the first tax year for which a credit is claimed under this section.

      (5) Notwithstanding subsection (3)(a) and (b) of this section, if the riparian land that is the basis of a credit under this section is adjacent to land that is in farm production under a share-rent agreement, the taxpayer that is engaged in farming operations and the taxpayer that is the landowner may each claim a credit under this section. The amount of the credit shall be allocated to each taxpayer in the proportion that the share-rent agreement allocates crop proceeds to each of those taxpayers. The total amount of credit allowed to both taxpayers under this subsection may not exceed the amount of the credit otherwise allowable under this section if the farming operations were not subject to a share-rent agreement.

      (6) Notwithstanding subsections (3)(a) and (5) of this section, if the taxpayer is actively engaged in farming operations and pays the landowner in cash, the taxpayer may claim all of the credit available under this section.

      (7) The credit allowed in any one tax year may not exceed the tax liability of the taxpayer.

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

      (9) In the case of a credit allowed under this section for purposes of ORS chapter 316:

      (a) A nonresident shall be allowed the credit in the same manner and subject to the same limitations as a resident. However, the credit shall be prorated using the proportion provided in ORS 316.117.

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

      (c) If a change in the status of a taxpayer from resident to nonresident or from nonresident to resident occurs, the credit allowed by this section shall be determined in a manner consistent with ORS 316.117.

      (10) If a taxpayer that has claimed a credit under this section places the riparian land for which the credit is claimed back in farm production, the taxpayer may not claim a credit under this section for five tax years following the year the riparian land was placed back in farm production.

      (11) The Department of Revenue may adopt rules prescribing procedures for identifying forgone crops and for establishing the market value of forgone crops. [2001 c.912 §3; 2003 c.46 §32]

 

      315.115 [Repealed by 1965 c.26 §6]

 

      315.117 Legislative findings and declarations regarding on-farm processing. The Legislative Assembly finds that farming and related agricultural activities make significant contributions to the economy of this state and that the contributions of family farms are important in maintaining the agricultural diversity upon which consistent economic performance is based. The Legislative Assembly further finds that changes in the marketplace and in the expectations of consumers of agricultural products have resulted in a need for greater vertical integration and on-farm processing of agricultural commodities. The Legislative Assembly declares that an income tax credit for property taxes paid on on-farm processing machinery and equipment encourages the continued operation and expansion of on-farm processing and results in a greater share of the value of agricultural products being retained by the farms in this state. The Legislative Assembly further declares that an incentive in the form of an income tax credit does not adversely impact the revenues of local governments in this state. [2001 c.725 §2]

 

      315.119 On-farm processing facilities. (1) As used in this section:

      (a) “Effective property tax rate” means:

      (A) The ratio of the total amount of property taxes imposed on the account that contains the machinery and equipment for which a credit is being claimed (after application of ORS 310.150 but prior to discount under ORS 311.505) over the assessed value of the property tax account; and

      (B) The ratio determined under subparagraph (A) of this paragraph for the property tax year that begins in the income tax year for which the credit is claimed.

      (b) “Farm operator” means a person that operates a farming business as defined in section 263A of the Internal Revenue Code.

      (c) “Machinery and equipment” means machinery and equipment that meets the definition of section 1245 property in section 1245 of the Internal Revenue Code.

      (d) “Processing”:

      (A) Means any activity that is directly related and necessary to clean, sort, grade, produce, prepare, manufacture, handle, package, store or ship a farm crop or livestock product after the point of harvest and before the point of sale, in a modified state or altered form.

      (B) Does not include an activity primarily associated with the promotion or retail sale of a product for personal or household use that is normally sold through consumer retail distribution.

      (e) “Qualified machinery and equipment” means machinery and equipment used in processing that meets the requirements of subsections (3) and (4) of this section for the tax year.

      (2) A taxpayer who is a farm operator may claim a credit against the taxes that are otherwise due under ORS chapter 316 or, if the taxpayer is a corporation, under ORS chapter 317 or 318 for ad valorem property taxes paid or incurred on qualified machinery and equipment.

      (3) A credit under this section may be claimed only if:

      (a) The machinery and equipment is owned by the farm operator or by a person who is related to the farm operator under section 267 of the Internal Revenue Code;

      (b) The machinery and equipment is used for processing primarily occurring on land described in subsection (4) of this section; and

      (c)(A) The farm operator has grown or raised at least one-half of the total volume of farm crop or livestock products processed with the machinery and equipment for which the credit is being claimed in three of the five previous income tax years; or

      (B)(i) The farm operator has grown or raised at least one-tenth of the total volume of farm crop or livestock products processed with the machinery and equipment for which the credit is being claimed in three of the five previous income tax years; and

      (ii) The farm operator has used the machinery and equipment to process at least one-half of the volume of the applicable farm crop or livestock products grown or raised by the farm operator in three of the five previous income tax years.

      (4) In addition to the requirements under subsection (3) of this section, a credit under this section may be claimed only if:

      (a) The machinery and equipment is located on land that is specially assessed for farm use under ORS 308A.050 to 308A.128 and the machinery and equipment is owned or otherwise controlled by the farm operator; or

      (b) The machinery and equipment is located on land that is contiguous to land that is specially assessed for farm use under ORS 308A.050 to 308A.128 and the machinery and equipment is owned or otherwise controlled by the farm operator.

      (5) A credit may be claimed under this section only for qualified machinery and equipment that was subject to assessment and property taxation for the property tax year beginning in the income tax year for which the credit is being claimed.

      (6) The amount of the credit shall be the lesser of:

      (a) The effective property tax rate multiplied by the adjusted basis of the qualified machinery and equipment; or

      (b) $30,000.

      (7) The adjusted basis of the qualified machinery and equipment shall be the adjusted basis of the qualified machinery and equipment for personal income or corporate excise or income tax purposes as of the last day of the income tax year for which the credit is being claimed, except that the adjusted basis shall be increased by the cost of any qualified machinery and equipment that the taxpayer elected to expense under section 179 of the Internal Revenue Code, until the qualified machinery and equipment is fully depreciated for personal income or corporate excise or income tax purposes. The adjusted basis shall reflect any depreciation allowable for the current tax year. A credit under this section may not be allowed for a tax year in which the qualified machinery and equipment is fully depreciated for personal income or corporate excise or income tax purposes.

      (8) The credit allowed under this section for any one tax year may not exceed the tax liability of the taxpayer.

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

      (10) The credit allowed under this section is not in lieu of any depreciation or amortization deduction to which the taxpayer otherwise may be entitled under ORS chapter 316, 317 or 318 for the tax year.

      (11) The taxpayer’s adjusted basis for determining gain or loss may not be further decreased by any amount of credit allowed under this section.

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

      (13) If a change in the status of a taxpayer from resident to nonresident or from nonresident to resident occurs, the credit allowed under this section shall be determined in a manner consistent with ORS 316.117.

      (14) If a change in the taxable year of a taxpayer occurs as described in ORS 314.085, or if the Department of Revenue terminates the taxpayer’s taxable year under ORS 314.440, the credit allowed under this section shall be prorated or computed in a manner consistent with ORS 314.085. [2001 c.725 §3]

 

      Note: Section 5, chapter 725, Oregon Laws 2001, provides:

      Sec. 5. (1) Sections 3 and 4 of this 2001 Act [315.119 and 315.123] apply to tax years beginning on or after January 1, 2002.

      (2) Except as provided in section 3 (9) of this 2001 Act [315.119 (9)], credits allowed under section 3 of this 2001 Act apply to tax years beginning before January 1, 2008. [2001 c.725 §5]

 

      315.120 [Amended by 1953 c.132 §3; repealed by 1965 c.26 §6]

 

      315.123 Minimum production and processing volume requirements; recordkeeping requirements. (1) For the first three tax years in which a taxpayer claims a credit under ORS 315.119, a taxpayer shall be deemed to have complied with the applicable minimum production and processing volume requirements of ORS 315.119 (3)(c) if the taxpayer has satisfied these requirements for the preceding tax year.

      (2) For the fourth tax year in which a taxpayer claims a credit under ORS 315.119, the taxpayer shall be deemed to have complied with the applicable minimum production and processing volume requirements of ORS 315.119 (3)(c) if the taxpayer has satisfied these requirements for the preceding tax year and at least one of the three tax years immediately prior to the preceding tax year.

      (3) For each tax year in which a credit is claimed under ORS 315.119, the taxpayer shall maintain records sufficient to determine the taxpayer’s production and processing volume for purposes of ORS 315.119 (3)(c). A taxpayer shall maintain the records required under this subsection for at least 10 years. [2001 c.725 §4]

 

      Note: See note under 315.119.

 

      315.125 [Enacted as 1953 c.197 §2; repealed by 1965 c.26 §6]

 

      315.134 Fish habitat improvement. (1) A resident individual shall be allowed a credit against the taxes otherwise due under ORS chapter 316 (or if the taxpayer is a corporation, the corporation shall be allowed a credit against the taxes otherwise due under ORS chapter 317 or 318), based upon the cost of a fish habitat improvement project certified under ORS 496.260. The amount of the credit shall be 25 percent of the amount certified.

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

      (a) The fish habitat improvement project must have been given final certification by the State Department of Fish and Wildlife as provided in ORS 496.260.<