US Laws, Codes, Statutes & Cases

Chapter 316 — Personal Income Tax

 

2007 EDITION

 

PERSONAL INCOME TAX

 

REVENUE AND TAXATION

 

GENERAL PROVISIONS

 

316.002     Short title

 

316.003     Goals

 

316.007     Policy

 

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

 

316.013     Determination of federal adjusted gross income

 

316.014     Determination of net operating loss, carryback and carryforward

 

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

 

316.022     General definitions

 

316.024     Application of federal law to determination of taxable income

 

316.027     “Resident” defined

 

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

 

316.037     Imposition and rate of tax

 

316.042     Amount of tax where joint return used

 

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

 

316.047     Transitional provision to prevent doubling income or deductions

 

316.048     Taxable income of resident

 

316.054     Social Security benefits to be subtracted from federal taxable income

 

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

 

316.074     Exemption for service in Vietnam on missing status

 

316.076     Deduction for physician in medically disadvantaged area

 

CREDITS

 

316.078     Tax credit for dependent care expenses necessary for employment

 

316.079     Credit for certain disabilities

 

316.082     Credit for taxes paid another state; rules

 

316.085     Personal exemption credit

 

316.087     Credit for the elderly or permanently and totally disabled

 

316.095     Credit for sewage treatment works connection costs

 

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

 

316.102     Credit for political contributions

 

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

 

316.116     Credit for alternative energy device or alternative fuel vehicle

 

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

 

TAXATION OF NONRESIDENTS

 

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

 

316.118     Pro rata share of S corporation income of nonresident shareholder

 

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

 

316.122     Separate or joint determination of income for husband and wife

 

316.124     Determination of adjusted gross income of nonresident partner

 

316.127     Income of nonresident from Oregon sources

 

316.130     Determination of taxable income of full-year nonresident

 

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

 

ADDITIONAL CREDITS

 

(Costs in Lieu of Nursing Home Care)

 

316.147     Definitions for ORS 316.147 to 316.149

 

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

 

316.149     Evidence of eligibility for credit

 

(Retirement Income)

 

316.157     Credit for retirement income

 

316.158     Effect upon ORS 316.157 of determination of invalidity; severability

 

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

 

COLLECTION OF TAX AT SOURCE OF PAYMENT

 

(Generally)

 

316.162     Definitions for ORS 316.162 to 316.221

 

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

 

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

 

316.168     Employer required to file combined quarterly tax report

 

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

 

316.171     Application of tax and report to administration of tax laws

 

316.172     Tax withholding tables to be prepared by department

 

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

 

316.182     Exemption certificate

 

316.187     Amount withheld is in payment of employee’s tax

 

316.189     Withholding of state income taxes from certain periodic payments

 

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

 

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

 

316.194     Withholding from lottery prize payments; rules

 

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

 

316.197     Payment to department by employer; interest on delinquent payments

 

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

 

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

 

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

 

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

 

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

 

(Professional Athletic Teams)

 

316.213     Definitions for ORS 316.213 to 316.219

 

316.214     Withholding requirements for members of professional athletic teams

 

316.218     Annual report of compensation paid to professional athletic team members

 

316.219     Rules

 

(Qualifying Film Productions)

 

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

 

316.221     Disposition of withheld amounts

 

NONRESIDENT REPORTING

 

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

 

ESTATES AND TRUSTS

 

(Generally)

 

316.267     Application of chapter to estates and certain trusts

 

316.272     Computation and payment on estate or trust

 

316.277     Associations taxable as corporations exempt from chapter

 

316.279     Treatment of business trusts and business trusts income

 

(Resident Estates and Trusts)

 

316.282     Definitions related to trusts and estates; rules

 

316.287     “Fiduciary adjustment” defined; shares proportioned; rules

 

316.292     Credit for taxes paid another state

 

316.298     Accumulation distribution credit

 

(Nonresident Estates and Trusts)

 

316.302     “Nonresident estate or trust” defined

 

316.307     Income of nonresident estate or trust

 

316.312     Determination of Oregon share of income

 

316.317     Credit to beneficiary for accumulation distribution

 

RETURNS; PAYMENTS; REFUNDS

 

316.362     Persons required to make returns

 

316.363     Returns; instructions

 

316.364     Flesch Reading Ease Score form instructions

 

316.367     Joint return by husband and wife

 

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

 

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

 

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

 

316.377     Individual under disability

 

316.382     Returns by fiduciaries

 

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

 

316.392     Notice of qualification of receiver and others

 

316.417     Date return considered made or advance payment made

 

316.457     Department may require copy of federal return

 

316.462     Change of election

 

316.472     Tax treatment of common trust fund; information return required

 

316.490     Refund as contribution to Alzheimer’s Disease Research Fund

 

316.491     Refund as contribution to Oregon Military Emergency Financial Assistance Program

 

316.493     Refund as contribution for prevention of child abuse and neglect

 

DISTRIBUTION OF REVENUE

 

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

 

PAYMENT OF ESTIMATED TAXES

 

316.557     Definition of “estimated tax”

 

316.559     Application of ORS 316.557 to 316.589 to estates and trusts

 

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

 

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

 

316.569     When declaration required of nonresident

 

316.573     When individual not required to file declaration

 

316.577     Date of filing declaration

 

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

 

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

 

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

 

316.588     When interest on underpayment not imposed

 

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

 

MODIFICATIONS OF TAXABLE INCOME

 

(Generally)

 

316.680     Modification of taxable income

 

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

 

316.683     State exempt-interest dividends; rules

 

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

 

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

 

316.690     Foreign income taxes

 

316.695     Additional modifications of taxable income; rules

 

316.697     Fiduciary adjustment

 

316.698     Subtraction for qualifying film production labor rebates

 

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

 

316.707     Computation of depreciation of property under federal law; applicability

 

316.716     Differences in basis on federal and state return

 

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

 

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

 

316.744     Cash payments for energy conservation

 

(Additional Personal Exemption Credits)

 

316.752     Definitions for ORS 316.752 to 316.771

 

316.758     Additional personal exemption credit for persons with severe disabilities

 

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

 

316.771     Proof of status for exemption credit

 

(Exemptions)

 

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

 

316.778     Small city business development exemption; rules

 

316.783     Amounts received for condemnation of Indian tribal lands

 

316.785     Income derived from exercise of Indian fishing rights

 

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

 

316.789     Persian Gulf Desert Shield active military service

 

316.791     Compensation for active duty military service

 

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

 

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

 

(Additional Modifications of Taxable Income)

 

316.806     Definitions for ORS 316.806 to 316.818

 

316.812     Certain traveling expenses

 

316.818     Proof of expenses

 

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

 

316.824     Definitions for ORS 316.824 and 316.832

 

316.832     Travel expenses for loggers

 

316.834     Underground storage tank pollution prevention or essential services grant

 

316.836     Qualified production activities income

 

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

 

316.838     Art object donation

 

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

 

316.845     Exception to ORS 316.844

 

316.846     Scholarship awards used for housing expenses

 

316.848     Individual development accounts

 

316.852     Qualified donations and sales to educational institutions

 

DEFERRAL OF REINVESTED GAIN

 

316.871     Definitions for ORS 316.872

 

316.872     Deferral of gain on sale of small business securities

 

316.873     Definitions for ORS 316.873 to 316.884

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

316.970     Effect of chapter 493, Oregon Laws 1969

 

PENALTIES

 

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

 

GENERAL PROVISIONS

 

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

 

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

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

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

      (2) Those guiding principles are:

      (a) Ability to pay;

      (b) Fairness;

      (c) Efficiency;

      (d) Even distribution;

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

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

      (B) That it is not regressive; and

      (C) That it imposes approximately the same tax burden on all households earning the same income;

      (f) Adequacy; and

      (g) Flexibility.

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

 

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

 

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

 

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

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

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

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

 

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

 

      316.012 Terms have same meaning as in federal laws; federal law references. Any term used in this chapter has the same meaning as when used in a comparable context in the laws of the United States relating to federal income taxes, unless a different meaning is clearly required or the term is specifically defined in this chapter. Except where the Legislative Assembly has provided otherwise, any reference in this chapter to the laws of the United States or to the Internal Revenue Code refers to the laws of the United States or to the Internal Revenue Code as they are amended and in effect:

      (1) On December 31, 2006; or

      (2) If related to the definition of taxable income, as applicable to the tax year of the taxpayer. [1969 c.493 §3; 1971 s.s. c.4 §2; 1975 c.672 §3; 1983 c.162 §59; 1985 c.802 §1; 1987 c.293 §2; 1989 c.625 §2; 1991 c.457 §1; 1993 c.726 §27; 1995 c.556 §1; 1997 c.839 §1; 1999 c.224 §7; 2001 c.660 §35; 2003 c.77 §14; 2005 c.519 §9; 2005 c.832 §27; 2007 c.614 §12]

 

      316.013 Determination of federal adjusted gross income. Unless the context requires otherwise and notwithstanding ORS 316.012, whenever, in the calculation of Oregon taxable income, reference to the taxpayer’s federal adjusted gross income is required to be made, the taxpayer’s federal adjusted gross income shall be as determined under the provisions of the Internal Revenue Code as they may be in effect for the tax year of the taxpayer without any of the additions, subtractions or other modifications or adjustments required under this chapter and other laws of this state applicable to personal income taxation. [1985 c.802 §3a; 1999 c.580 §3]

 

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

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