Oregon Revised Statutes

(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; 2017 c.315 §22]

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316.005 [1953 c.304 §1; repealed by 1969 c.493 §99]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316.010 [1953 c.304 §2; 1953 c.552 §1; repealed by 1969 c.493 §99]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, 2023; 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; 2008 c.45 §13; 2009 c.5 §23; 2009 c.909 §§24,25; 2010 c.82 §§24,25; 2011 c.7 §23; 2012 c.31 §22; 2013 c.377 §22; 2014 c.52 §24; 2015 c.442 §16; 2016 c.33 §19; 2017 c.527 §20; 2018 c.101 §20; 2019 c.319 §20; 2021 c.456 §21; 2022 c.83 §21; 2023 c.171 §21; 2024 c.75 §21]

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; 2009 c.5 §29; 2009 c.909 §§31,32; 2010 c.82 §26]

316.014 [1985 c.802 §18; 1997 c.839 §2; 2003 c.77 §15; renumbered 316.028 in 2011]

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c.304 §3; 1953 c.552 §2; 1959 c.211 §3; 1959 c.593 §1 (referred and rejected); 1963 c.627 §2 (referred and rejected); repealed by 1969 c.493 §99; amended by 1969 c.520 §41]

316.016 [1973 c.119 §2; repealed by 1975 c.672 §8]

316.017 [1969 c.493 §3a; repealed by 1969 c.493 §3b]

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

316.019 [1985 c.802 §46; repealed by 1997 c.839 §69]

316.020 [1953 c.304 §4; repealed by 1969 c.493 §99]

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

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

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

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

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

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

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

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

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

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

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

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

316.026 Charitable contributions or activities not to be used for domicile or resident status determination. The Department of Revenue may not use the charitable contributions or activities of an individual or the individual’s spouse, whether performed inside or outside this state, for the purposes of determining the individual’s domicile or resident status under this chapter. [2018 c.52 §2]

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

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

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

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

(vi) Life insurance proceeds.

(vii) Accident and health insurance proceeds, except reimbursement of incurred medical expenses.

(viii) Personal injury damages.

(ix) Sick pay that is not included in federal adjusted gross income.

(x) Strike benefits excluded from federal gross income.

(xi) Worker’s compensation, except for reimbursement of medical expense.

(xii) Military pay and benefits.

(xiii) Veteran’s benefits.

(xiv) Payments received under the federal Social Security Act that are excluded from federal gross income.

(xv) Welfare payments, except as follows:

(I) Payments for medical care, drugs and medical supplies, if the payments are not made directly to the welfare recipient;

(II) In-home services authorized and approved by the Department of Human Services; and

(III) Direct or indirect reimbursement of expenses paid or incurred for participation in work or training programs.

(xvi) Nontaxable dividends.

(xvii) Nontaxable interest not included in federal adjusted gross income.

(xviii) Rental allowance paid to a minister that is excluded from federal gross income.

(xix) Income from sources without the United States that is excluded from federal gross income.

(B) Adjusted gross income shall be increased due to the disallowance of the following deductions:

(i) The amount of the net loss, in excess of $1,000, from all dispositions of tangible or intangible properties.

(ii) The amount of the net loss, in excess of $1,000, from the operation of a farm or farms.

(iii) The amount of the net loss, in excess of $1,000, from all operations of a trade or business, profession or other activity entered into for the production or collection of income.

(iv) The amount of the net loss, in excess of $1,000, from tangible or intangible property held for the production of rents, royalties or other income.

(v) The amount of any net operating loss carryovers or carrybacks included in federal adjusted gross income.

(vi) The amount, in excess of $5,000, of the combined deductions or other allowances for depreciation, amortization or depletion.

(vii) The amount added or subtracted, as required within the context of this section, for adjustments made under ORS 316.680 (2)(d) and 316.707 to 316.737.

(C) “Income” does not include the following:

(i) Any governmental grant that must be used by the taxpayer for rehabilitation of the homestead of the taxpayer.

(ii) Any refund of Oregon personal income taxes that were imposed under this chapter.

(d) “Net pension income” means:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(4) If a change in the status of the eligible individual from resident to nonresident or from nonresident to resident occurs, the credit allowed by this section shall be determined in a manner consistent with subsection (1) of this section. [1991 c.823 §5; 1997 c.839 §13; 1999 c.90 §12; 2001 c.660 §39; 2015 c.348 §19; 2015 c.480 §9; 2016 c.33 §22; 2017 c.315 §24; 2017 c.527 §22; 2018 c.101 §22; 2019 c.319 §23; 2021 c.456 §23; 2022 c.83 §23; 2023 c.171 §23; 2024 c.75 §23]

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

Sec. 36. A credit may not be claimed under ORS 316.157 for tax years beginning on or after January 1, 2032. [2009 c.913 §36; 2013 c.750 §9; 2019 c.579 §27; 2025 c.562 §5]

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

(2) Except as provided in subsection (1) of this section, it is the intent of the Legislative Assembly that the provisions of this section and ORS 238.445, 316.087, 316.157, 316.680 and 316.695 be severable as provided in ORS 174.040. [1991 c.823 §9; 2015 c.348 §22; 2015 c.480 §10]

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

COLLECTION OF TAX AT SOURCE OF PAYMENT

(Generally)

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

(1) “Employer” means:

(a) A person who is in relation to another person such that the person may control the work of that other person and direct the manner in which the work is to be done; or

(b) An officer or employee of a corporation, or a member or employee of a partnership, who as an officer, employee or member is under a duty to perform the acts required of employers by ORS 316.167, 316.182, 316.197, 316.202 and 316.207.

(2) “Wages” means remuneration for services performed by an employee for an employer, including the cash value of all remuneration paid in any medium other than cash, except that “wages” does not include remuneration paid:

(a) For active service in the Armed Forces of the United States as to which no withholding is required by the Internal Revenue Code.

(b) To an employee of a common carrier to the extent that 49 U.S.C. 14503 and 40116 prohibit the remuneration from withholding for state income taxes.

(c) For domestic service in a private home, a local college club or a local chapter of a college fraternity or sorority.

(d) For casual labor not in the course of the employer’s trade or business.

(e) To an employee whose services to the employer consist solely of labor in connection with the planting, cultivating or harvesting of seasonal agricultural crops if the total amount paid to the employee is less than $300 annually.

(f) To seamen who are exempt from garnishment, attachment or execution under title 46 of the United States Code.

(g) To persons temporarily employed as emergency forest fire fighters.

(h) To employees’ trusts exempt from tax under provisions of the federal Internal Revenue Code.

(i) For services performed by a duly ordained, commissioned or licensed minister of a church in the exercise of the minister’s ministry or by a member of a religious order in the exercise of religious duties required by the order, which duties are not commercial in nature.

(j) For services provided by an independent contractor, as defined in ORS 670.600.

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

(L) When the remuneration is exempt from taxation under this chapter. [1969 c.493 §24; 1971 c.690 §1; 1973 c.229 §1; 1977 c.604 §1; 1981 c.705 §3; 1985 c.87 §3; 1989 c.762 §2; 1997 c.839 §15; 1999 c.21 §42; 1999 c.90 §13; 1999 c.580 §9; 2001 c.660 §40; 2003 c.77 §16; 2003 c.704 §6; 2005 c.533 §7; 2019 c.134 §1]

316.164 When surety bond or letter of credit required of employer; enforcement. (1) Except as provided in subsection (3) of this section, if the Department of Revenue makes the findings required under subsection (2) of this section, the department may require any employer subject to ORS 316.162 to 316.221, except the state or its political subdivisions, to post a surety bond, or irrevocable letter of credit issued by an insured institution, as defined in ORS 706.008, with the department, to secure future payment of amounts required to be withheld and paid over to the department under ORS 316.162 to 316.221 or 320.550. The bond or letter of credit shall be in an amount equal to the amounts required to be withheld upon the wages paid or estimated to be paid by the employer for a period of four calendar quarters. The bond or letter of credit shall be in a form acceptable to the department. Posting of the bond or letter of credit shall not relieve the employer from withholding and paying over amounts based on wages paid by the employer under any provision of ORS 316.162 to 316.221 or 320.550. The department may, in its discretion, at any time apply such bond or letter of credit or part thereof to the delinquencies or indebtedness of the employer arising under any provision of ORS 316.162 to 316.221 and 320.550 and accruing after the date the bond or letter of credit was posted. Appeal of an action of the department under this section shall not relieve an employer of the requirement during the pendency of the appeal.

(2) Before requiring an employer to post a bond or irrevocable letter of credit under subsection (1) of this section, the department shall determine that the employer has failed to make payment to the department of amounts required to be withheld and paid over under any provision of ORS 316.162 to 316.221 or 320.550 for at least three calendar quarters, and the total amount of delinquent payments exceeds $2,500, exclusive of interest or penalties. For purposes of this subsection, a payment shall not be considered delinquent if the employer’s liability to withhold is subject to appeal to the tax court.

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

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

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

(6) If an employer ceases to be an employer subject to ORS 316.162 to 316.221 or 320.550, the department shall, upon receipt of all payments due from the employer for withheld amounts, cancel any bond or irrevocable letter of credit given under this section. Such bonds or letters of credit held for the benefit of the State of Oregon shall first be applied to any indebtedness or deficiencies due from the employer under ORS 316.162 to 316.221 and 320.550 and accruing after the date the bond or letter of credit was posted before any return is made to the employer. The employer shall have no interest in such bond or letter of credit prior to full compliance with this section and all provisions of ORS 316.162 to 316.221 and 320.550.

(7) If an employer required to post a bond or irrevocable letter of credit or make payment of amounts withheld in the manner prescribed under this section makes full payment of all delinquent amounts due and owing at the time the bond, letter of credit or accelerated payment schedule was required and makes payment of amounts due under ORS 316.162 to 316.221 and 320.550 and files returns required in connection with those payments in a timely manner for the succeeding four calendar quarters, the department shall release the employer from the requirement to post the bond or letter of credit or make accelerated payments of amounts withheld.

(8) If any employer fails to comply with subsections (1) to (7) of this section, the Oregon Tax Court, upon commencement of an action by the department for that purpose, may order the employer to post the required bond or irrevocable letter of credit or make accelerated payments of amounts withheld. The employer’s failure to obey an order of the court is punishable by contempt. If the Oregon Tax Court determines that an order of compliance enforceable by contempt proceedings will not assure the payment of withheld taxes by the employer, the court may enjoin the employer from further employing individuals in this state or continuing in business therein until the employer has complied with subsections (1) to (7) of this section. [1985 c.406 §§2,3; 1991 c.331 §143; 1995 c.650 §36; 1997 c.631 §§453,454; 2017 c.750 §122b]

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

316.167 Withholding of tax required; elective provisions for agricultural employees; liability of supplier of funds to employer for taxes. (1) Every employer at the time of the payment of wages to any employee shall deduct and retain from the wages an amount determined by the Department of Revenue under ORS 316.172. However, in the case of wages paid to an employee whose services to the employer consist solely of labor in connection with the planting, cultivating or harvesting of seasonal agricultural crops, the employer may elect to withhold two percent of the total wages paid without regard to any exemption from withholding requirements.

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

(3) With the approval of the Oregon Department of Administrative Services, the department may enter into contracts with banking institutions including but not limited to Federal Reserve Banks, incorporated banks, trust companies, domestic building and loan associations, savings and loan associations or credit unions authorizing them to receive as financial agents of the department any tax required to be withheld and paid to the department. [1969 c.493 §25; 1975 c.394 §1; 1977 c.604 §2; 1982 s.s.1 c.1 §1; 2019 c.134 §2]

316.168 Employer required to file combined quarterly tax report. (1) Except as otherwise provided by law, every employer subject to the provisions of ORS 316.162 to 316.221, 320.550 and 656.506 and ORS chapters 657 and 657B, or a payroll-based tax imposed by a mass transit district and administered by the Department of Revenue under ORS 305.620, shall make and file a combined quarterly tax and assessment report upon a form prescribed by the department.

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

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

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

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

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

(7) The Department of Revenue, the Employment Department and the Department of Consumer and Business Services shall develop a system of account numbers and assign to each employer a single account number representing all of the tax and assessment programs included in the combined quarterly tax and assessment report. [1989 c.901 §2; 1993 c.760 §2; 2009 c.33 §20; 2025 c.27 §2]

316.169 Circumstances in which person other than employer required to withhold tax. (1) If a lender, surety or other person who is not an employer with respect to an employee pays wages directly to the employee, or to an agent on behalf of the employee, the lender, surety or other person shall deduct and retain from the wages, and shall be liable to this state for, an amount equal to the amount required to be withheld from the employee’s wages by the employer under ORS 316.167 and 320.550.

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

(3) Amounts paid under this section shall be credited against the liability of the employer under ORS 316.167 and 320.550.

(4) A lender, surety or other person described under this section shall be considered to be an employer with respect to withholdings made under this section or required to be made under this section for purposes of ORS 316.191, 316.197, 316.202, 316.207, 316.212 and 320.550.

(5) The employer of an employee that receives wages from a lender, surety or other person shall not be discharged from any liability or other obligation under ORS 316.162 to 316.221 or 320.550 except as provided for in subsection (3) of this section. [1997 c.133 §6; 2017 c.750 §122c]

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

316.171 Application of tax and report to administration of tax laws. Except as provided in this section and ORS 314.840, 316.168, 316.197, 316.202 and 657.571, the statutes and regulations applicable to each agency, requiring a report and imposing a tax, shall govern as to the audit and examination of returns, periods of limitation, determinations of and notices of deficiencies, assessments, collections, liens, delinquencies, claims for refund and refunds, conferences, judicial appeals, stays of collection pending appeal, confidentiality of returns and the related penalties, and the related procedures. [1989 c.901 §3; 2019 c.134 §3]

316.172 Department to provide deduction and withholding information and determine amount, form and manner of withholding by employers. (1) The Department of Revenue shall specify and disseminate information providing for the deduction and withholding of tax in an amount substantially equivalent to the amount of the tax that each employee will be required to pay under this chapter upon wages or other income. The amount shall be determined based upon wages for a given daily, weekly, biweekly, semimonthly, monthly or other payroll period. To accomplish this purpose, the department may make special provision for employees who are in the state for limited periods of time.

(2) The department shall determine the amount, form and manner of withholding of tax by employers on behalf of employees for purposes of ORS 316.162 to 316.221. [1969 c.493 §26; 1973 c.402 §20; 2019 c.134 §4]

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

316.177 Reliance on withholding statement or exemption certificate; penalty for statement without reasonable basis. (1) If an employee provides the employer with a withholding statement or exemption certificate under ORS 316.182, the employer may rely upon the instruction provided by the employee. If the employee instructs the employee’s employer to withhold an amount of tax from the employee’s pay or claim exemption from withholding, and as of the time the instruction was made there was no reasonable basis for the instruction, the Department of Revenue shall assess and collect from the employee a penalty of $500.

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

(3) The department may waive all or any part of the penalty imposed under subsection (1) of this section if the income tax liability of the employee for the taxable year is equal to or less than the sum of:

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

(b) The payments of estimated tax which are considered payments on account of the tax liability of the employee under ORS 316.579 and 316.583. [1969 c.493 §27; 1987 c.293 §19; 1987 c.843 §20; 1993 c.730 §42; 1995 c.650 §37; 2019 c.134 §5]

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

316.182 Withholding statement of exemption certificate; default withholding rate. (1) The Department of Revenue may require a withholding statement or an exemption certificate to be filed on a form prescribed by the department for purposes of an employee instructing the employee’s employer of the proper amount of tax to withhold from the employee’s pay, or of the employee’s exemption from withholding requirements.

(2) A withholding statement or exemption certificate need not be procured from an employee whose wages consist of wages as defined in ORS 316.162 (2)(e).

(3) If a statement or certificate is not provided to the employer as required under subsection (1) of this section, the employer shall withhold tax from the wages paid to the employee at the rate of eight percent of the wages. [1969 c.493 §28; 1987 c.293 §20; 1997 c.839 §16; 2001 c.660 §41; 2019 c.134 §6]

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(7) Any designated distribution shall be treated as if it were wages paid by an employer to an employee within the meaning of ORS 316.162 to 316.221 for all other purposes of ORS 316.162 to 316.221. In the case of any designated distribution not subject to withholding by reason of an election under subsection (4) of this section, the amount withheld shall be treated as zero. [1985 c.87 §9; 2003 c.77 §17; 2017 c.750 §122d; 2018 c.93 §17; 2019 c.134 §7]

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

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

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

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

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

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

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

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

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

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

(4) As used in this section:

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

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

(c) “Uniformed services” means the Army, Navy, Air Force, Marine Corps, Coast Guard, Space Force, commissioned corps of the United States Public Health Service and the commissioned corps of the National Oceanic and Atmospheric Administration. [1985 c.87 §8; 2025 c.453 §6]

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

316.194 Withholding from lottery prize payments; rules. (1) If a lottery prize payment for a prize is $1,500 or more, and the payment is made to an individual, the Oregon State Lottery Commission shall withhold eight percent of the payment. A payment made to a partnership, estate, trust or corporation shall not be subject to the withholding of tax.

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

(3) If a prize exceeds $600, the commission shall provide the prize recipient an income reporting form indicating the amount of the prize payment being made. At the request of the prize recipient or the department, the commission shall provide the requester a copy of an income reporting form provided under this subsection. [1997 c.849 §4; 1999 c.43 §1; 1999 c.143 §5; 2003 c.48 §1; 2017 c.19 §1]

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

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

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

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

(4) As used in this section:

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

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

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

316.197 Payment to department by employer; interest on delinquent payments. (1)(a) Except as provided under ORS 316.191 or paragraph (b) of this subsection, within the time that each employer is required to pay over taxes withheld for federal income tax purposes for any period, the employer shall pay over to the Department of Revenue or to a financial agent of the department the amounts required to be withheld under ORS 316.167, 316.172 and 320.550 for the same period. Any employer not required to withhold federal income taxes for any period but who is required to deduct and retain amounts from wages paid to an employee under ORS 316.167, 316.172 and 320.550 for the same period shall pay over to the department, or financial agent of the department, taxes withheld for the period, within the time and in the manner, as if the employer were required to withhold taxes for the period under federal law.

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

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

(3) If any amount required to be withheld and paid over to the department is delinquent, interest shall accrue at the rate prescribed under ORS 305.220 on that amount from the last day of the month following the end of the calendar quarter within which the amount was required to be paid to the department to the date of payment. The provisions of this subsection shall not relieve any employer from liability for a late payment penalty under any other provision of law. [1969 c.493 §31; 1975 c.594 §1; 1982 s.s.1 c.1 §2; 1983 c.697 §1; 1985 c.87 §4; 1989 c.901 §7; 2017 c.750 §122e]

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

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

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

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

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

316.202 Reports by employer; waiver; indication of qualified retirement plan offer; penalty for failure to substantiate report; rules. (1) With each payment made to the Department of Revenue, every employer shall deliver to the department, on a form prescribed by the department showing the total amount of withheld taxes in accordance with ORS 316.167, 316.172 and 320.550, and supply any other information as the department may require. The employer is charged with the duty of advising the employee of the amount of moneys withheld, in accordance with any regulations as the department may prescribe, using printed forms furnished or approved by the department for this purpose.

(2) Except as provided in subsection (5) of this section, every employer shall submit a combined quarterly return to the department on a form provided by it showing the number of payments made and the withheld taxes paid during the quarter. The report shall be filed with the department on or before the last day of the month following the end of the quarter.

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

(4) The employer shall indicate on the return required by subsection (3) of this section whether the employer offers a qualified retirement plan, as listed in ORS 178.215 (8), that would allow the employer to obtain an exemption from offering employees enrollment in the retirement plan developed under ORS 178.205. The department shall provide a means on the return by which the employer may make this indication.

(5) Notwithstanding the provisions of subsection (2) of this section, employers of agricultural employees may submit returns annually showing the number of payments made and the withheld taxes paid. However, such employers shall make and file a combined quarterly tax report with respect to other tax programs, as required by ORS 316.168.

(6) In addition to any other penalty required by law:

(a) A person who fails to substantiate a report required under subsection (3) of this section, or who files incomplete or incorrect substantiation, shall be subject to a penalty of $50 per federal form W-2 after the date on which the substantiation is due, up to a maximum penalty of $2,500.

(b) A person who knowingly fails to substantiate a report required under subsection (3) of this section, or who knowingly files incomplete or incorrect substantiation, shall be subject to a penalty of $250 per federal form W-2 after the date on which the substantiation is due, up to a maximum penalty of $25,000. [1969 c.493 §32; 1973 c.83 §1; 1982 s.s.1 c.1 §3; 1983 c.697 §2; 1987 c.366 §4; 1989 c.901 §8; 1993 c.593 §5; 1995 c.815 §1; 2013 c.734 §2; 2014 c.114 §14; 2017 c.750 §122f; 2019 c.134 §8; 2019 c.317 §1]

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

316.207 Liability for tax; warrant for collection; conference; appeal. (1) Every employer who deducts and retains any amount under ORS 316.162 to 316.221 and 320.550 shall hold the same in trust for the State of Oregon and for the payment thereof to the Department of Revenue in the manner and at the time provided in ORS 316.162 to 316.221.

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

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

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

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

(4)(a) In the case of a failure to file a withholding tax report on the due date, governed by the provisions of ORS 305.265 (10) and 314.400, the department, in addition to the provisions of ORS 305.265 (10) and 314.400, may send notices of determination and assessment to any officer, employee or member described in ORS 316.162 (1)(b) any time within three years after the assessment of an employer described in ORS 316.162 (1)(a). The time of assessment against the officer, employee or member shall be 30 days after the date the notice of determination and assessment is mailed. Within 30 days from the date the notice of determination and assessment is mailed to the officer, employee or member, the officer, employee or member shall pay the assessment, plus penalties and interest, or advise the department in writing of objections to the assessment, and if desired, request a conference. Any conference shall be governed by the provisions of ORS 305.265 pertaining to a conference requested from a notice of deficiency.

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

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

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

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

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

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

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

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

(e) Nothing in this section shall be construed to preclude a determination by the department or the Oregon Tax Court that more than one officer, employee or member are jointly and severally liable for unpaid withholding taxes. [1969 c.493 §33; 1985 c.406 §4; 1989 c.423 §3; 1993 c.593 §6; 1995 c.650 §38; 1997 c.839 §17; 2001 c.660 §42; 2005 c.688 §4; 2017 c.750 §122g; 2019 c.134 §9]

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

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

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

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

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

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

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

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

(a) The individual is:

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

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

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

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

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

316.212 Applicability of other provisions of tax law; employer as taxpayer. The provisions of the income tax laws in ORS chapters 305 and 314 and this chapter, as to the audit and examination of returns, periods of limitation, determinations of and notices of deficiencies, assessments, collections, liens, delinquencies, claims for refund and refunds, conferences, judicial appeals, stays of collection pending appeal, confidentiality of returns and the related penalties, and the related procedures, apply to employers subject to the provisions of ORS 316.162 to 316.221 and 320.550, and for these purposes any amount deducted or required to be deducted and remitted to the Department of Revenue under ORS 316.162 to 316.221 and 320.550 is considered the tax of the employer and with respect to the amount the employer is considered as a taxpayer. [1969 c.493 §34; 1982 s.s.1 c.16 §10; 1985 c.87 §5; 2017 c.750 §122h; 2019 c.134 §10]

(Professional Athletic Teams)

316.213 Definitions for ORS 316.213 to 316.219. (1) As used in ORS 316.213 to 316.219:

(a) “Duty days” means the days during the tax year from the beginning of the official preseason training period of a professional athletic team through the last game in which the professional athletic team competes or is scheduled to compete during the tax year.

(b) “Member of a professional athletic team” means an athlete or other individual rendering service to a professional athletic team if the compensation of the athlete or other individual exceeds $50,000 in a tax year.

(2) The Department of Revenue may further define by rule the terms defined in this section in a manner consistent with this section. [2003 c.808 §6]

316.214 Withholding requirements for members of professional athletic teams. (1) A person who transacts business in the State of Oregon and who pays wages, salary, bonuses or other taxable income to a member of a professional athletic team, in lieu of the withholding requirements under ORS 316.167, shall withhold eight percent of the income as provided in this section and by rule of the Department of Revenue.

(2) The person withholding amounts under this section shall pay the amounts withheld to the Department of Revenue at the time and in the manner prescribed by the department by rule.

(3) If the member of a professional athletic team is a resident of the State of Oregon, all compensation paid to the member, whether or not attributable to duty days, is subject to withholding under this section.

(4) If the member of a professional athletic team is not a resident of the State of Oregon, a portion of the compensation paid to the member is subject to withholding under this section. The portion subject to withholding is that portion of compensation received for the tax year that bears the same ratio to total compensation received for the tax year as the number of duty days within this state bears to the total number of duty days spent both within and outside this state during the tax year.

(5) Notwithstanding the description of the portion of compensation subject to withholding in subsection (4) of this section, the Department of Revenue may provide by rule alternative methodologies for determining the portion of compensation subject to withholding under this section that the department determines to be fair and equitable. [2003 c.808 §7]

316.215 [1969 c.493 §35; 1975 c.672 §6; 1978 c.9 §2; 1985 c.345 §5; repealed by 1987 c.293 §54]

316.216 [1985 c.352 §2; formerly 316.857; renumbered 316.223 in 2003]

316.217 [1969 c.493 §36; repealed by 1987 c.293 §56]

316.218 Annual report of compensation paid to professional athletic team members. (1) In addition to other reports and returns required by law or rule, a person required to withhold compensation under ORS 316.214 shall file an annual report with the Department of Revenue reporting:

(a) The total amount of compensation paid during the year to the members of the professional athletic team for which the report is being made.

(b) A roster of the members of the professional athletic team for which the report is being made who were members at any time during the year, that lists for each member:

(A) A taxpayer identification number;

(B) Compensation paid to the member; and

(C) The number of duty days in this state and the total number of duty days for the year.

(c) The amount withheld under ORS 316.214 for the year.

(d) Other information the department may require by rule.

(2) The report must be filed with the department on or before April 15 following the year for which the report is being made or at another time as the department may require by rule. [2003 c.808 §8]

316.219 Rules. (1) The Department of Revenue may adopt administrative rules the department determines are necessary to:

(a) Implement the duties of the department under ORS 316.213 to 316.219; and

(b) Carry out the purposes of ORS 316.213 to 316.221.

(2) The rules may include, but are not limited to:

(a) Rules providing alternative methodologies for determining the portion of compensation subject to withholding under ORS 316.214 (4) that the department determines to be fair and equitable; and

(b) Rules construing ORS 316.162 to 316.221 in a manner that is consistent and compatible with the withholding provisions of ORS 316.213 to 316.219. [2003 c.808 §8a]

(Qualifying Film Productions)

316.220 Alternative withholding requirements for qualifying film production compensation; rules; refund prohibition. (1) A person who has obtained a written certificate under section 1, chapter 559, Oregon Laws 2005, who is engaged in a qualifying film production and who pays qualifying compensation shall withhold, in lieu of the state personal income tax withholding requirements under ORS 316.167, 6.2 percent of the qualifying compensation paid.

(2) For tax years beginning on or after January 1, 2007, the Department of Revenue may by rule prescribe a withholding percentage that reflects the department’s best estimate of state personal income tax attributable to qualifying compensation. If a withholding percentage is established by rule, a person described in subsection (1) of this section shall withhold at the percentage established by rule in lieu of subsection (1) of this section and the state personal income tax withholding requirements under ORS 316.167.

(3) A person who withholds amounts under this section shall pay the amounts withheld to the Department of Revenue and shall file combined quarterly tax and assessment reports in accordance with ORS 316.168.

(4) A person who is required to withhold amounts under this section shall file, in addition to any other reports required by law, a report with the Oregon Film and Video Office, reporting:

(a) The total amount of qualifying compensation paid by the person;

(b) The names, taxpayer identification numbers and amounts of qualifying compensation paid to each employee receiving qualifying compensation during the period during which the qualifying film production was produced;

(c) The total amount withheld under this section for the period during which the qualifying film production was produced; and

(d) Any other information required by the office.

(5) The report must be filed with the office as soon as is practicable following completion of the qualifying film production or, in the case of a qualifying film production that consists of commercials, annually on or before January 31 of the year following the year in which the commercials were produced. The office shall report the total amount reported by each person under subsection (4)(c) of this section to the department.

(6) Notwithstanding ORS 316.171 or other law governing claims for refund of withheld amounts under ORS 316.162 to 316.221, a person who withholds amounts under this section may not file a claim for refund with respect to any amount shown as having been withheld or any payment accompanying a report filed under ORS 316.162 to 316.221 for a reporting period that overlaps a period for which a report is filed under subsection (4) of this section. [2005 c.559 §4]

316.221 Disposition of withheld amounts. (1) Notwithstanding ORS 316.168 or 316.502, the Department of Revenue shall deposit into a suspense account established under ORS 293.445 amounts that are withheld and paid to the department under ORS 316.220 and that equal the amounts reported to the department by the Oregon Film and Video Office under ORS 316.220 (5).

(2) Notwithstanding ORS 314.835 or 314.840 or other law concerning the disclosure of tax information, the department may send copies of withholding reports filed under ORS 316.162 to 316.221 by a certificate holder and statements of the amounts actually withheld by a certificate holder to the Oregon Film and Video Office.

(3) Amounts necessary to reimburse the department for the expenses of the department in administering this section and ORS 316.220, not to exceed one-half of one percent of amounts deposited in the suspense account described in subsection (1) of this section, are continuously appropriated to the department from the suspense account. The balance of the suspense account shall be transferred to the Greenlight Oregon Labor Rebate Fund established under section 2, chapter 559, Oregon Laws 2005. [2005 c.559 §5]

316.222 [1969 c.493 §37; repealed by 1987 c.293 §56]

NONRESIDENT REPORTING

316.223 Alternate methods of filing, reporting and calculating liability for nonresident employer and employee in state temporarily; rules. (1) As used in this section:

(a) “Nonresident employer” means an employer who:

(A) Has no permanent place of business within this state; and

(B) Employs qualifying nonresident employees to perform temporary services in this state.

(b) “Qualifying nonresident employee” means an employee or independent contractor who:

(A) Is not a resident or part-year resident of this state;

(B) Performs temporary services in this state for one or more nonresident employers; and

(C) Has no income from Oregon sources other than income earned in connection with the performance of temporary services for one or more nonresident employers.

(c) “Temporary services” means services performed during a limited period of time, not to exceed 200 days in one calendar year.

(2) The Department of Revenue shall provide for alternate methods of filing, reporting or calculating tax liability, to be used by nonresident employers and qualifying nonresident employees to report and pay Oregon personal income tax on income earned in connection with the employees’ performance of temporary services in this state. In providing for an alternate filing, reporting or calculating method, the department shall have the power to:

(a) Prescribe forms to be filed by nonresident employers to satisfy withholding registration, quarterly filing and account termination filing requirements under ORS 316.162 to 316.221, or employee estimated tax requirements under ORS 316.557 to 316.589.

(b) Prescribe forms to be filed by qualifying nonresident employees to satisfy annual personal income tax return requirements under ORS 316.362.

(c) Determine, based upon the circumstances, the amount of withholding or estimated tax payments necessary to result in a sum substantially equivalent to the amount of tax that a qualifying nonresident employee will be required to pay under this chapter.

(d) Enter into agreements pursuant to ORS 305.150 for the purpose of finally determining the Oregon personal income tax liability of qualifying nonresident employees.

(e) Determine whether and to what extent other provisions of this chapter shall be applied to nonresident employers or qualifying nonresident employees.

(3)(a) Except as provided in paragraph (b) of this subsection, a nonresident employer shall comply with the requirements of ORS 316.162 to 316.221 in the same manner as any other employer.

(b) A nonresident employer may elect to employ an alternate method established by the department pursuant to this section by notifying the department in the time and manner established by rule of the department. Any nonresident employer giving notice of election under this paragraph shall not be required to comply with the requirements of ORS 316.162 to 316.221.

(4)(a) Notwithstanding the election of a nonresident employer to employ the alternate method established by the department under this section, a qualifying nonresident employee may elect to report and pay Oregon personal income tax on income earned by the employee in connection with the employee’s performance of temporary services in this state in the same manner as any other nonresident.

(b) If a nonresident employer does not make the election permitted under subsection (3) of this section, the qualifying nonresident employees of the employer shall report and pay Oregon personal income tax on income earned in connection with their performance of temporary services within this state in the same manner as any other nonresident.

(5) The department may adopt any rules it considers necessary to carry out the provisions of this section. [Formerly 316.216]

316.227 [1969 c.493 §38; repealed by 1987 c.293 §56]

316.255 [1953 c.304 §29; repealed by 1959 c.581 §1 (316.256 enacted in lieu of 316.255)]

316.256 [1959 c.581 §2 (enacted in lieu of 316.255); subsection (4) derived from 1959 c.581 §11; repealed by 1969 c.493 §99]

316.257 [1963 c.435 §4; repealed by 1969 c.493 §99]

316.258 [1961 c.225 §2; repealed by 1969 c.493 §99]

316.260 [1953 c.304 §30; repealed by 1969 c.493 §99]

316.265 [1953 c.304 §31; 1953 c.552 §7; repealed by 1959 c.581 §3 (316.266 enacted in lieu of 316.265)]

316.266 [1959 c.581 §4 (enacted in lieu of 316.265); last sentence derived from 1959 c.581 §11; last sentence of subsection (6) enacted as 1961 c.225 §3; 1969 c.103 §1; repealed by 1969 c.493 §99]

ESTATES AND TRUSTS

(Generally)

316.267 Application of chapter to estates and certain trusts. The tax imposed by this chapter on individuals applies to the taxable income of estates and trusts, except for trusts taxed as corporations under ORS chapter 317 or 318. [1969 c.493 §39; 1973 c.115 §3]

316.270 [1953 c.304 §32; repealed by 1969 c.493 §99]

316.272 Computation and payment on estate or trust. The taxable income of an estate or trust shall be computed in the same manner as in the case of an individual except as otherwise provided by this chapter. The tax shall be paid by the fiduciary. [1969 c.493 §40; 1983 c.684 §21]

316.275 [1953 c.304 §33; 1959 c.591 §19; subsection (2) derived from 1959 c.591 §21; repealed by 1969 c.493 §99]

316.277 Associations taxable as corporations exempt from chapter. (1) An association, trust or other unincorporated organization that is taxable as a corporation for federal income tax purposes is not subject to tax under this chapter, but is taxable as a corporation under ORS chapter 317 or 318, or both, as provided therein.

(2) An association, trust or other unincorporated organization that is not taxable as a corporation for federal income tax purposes but by reason of its purposes or activities is exempt from federal income tax except with respect to its unrelated business taxable income, is taxable under this chapter on such federally taxable income. [1969 c.493 §41; 1973 c.402 §21]

316.279 Treatment of business trusts and business trusts income. A domestic or foreign business trust of the type defined in ORS 128.560 is subject to tax under ORS chapter 317 or 318 and amounts distributed by it to its shareholders shall be treated as distributions by a corporation for the purposes of this chapter and ORS chapters 317 and 318, except that distributions that are treated as unrelated business taxable income under section 856(h)(3)(C) (pension-held REITs) of the Internal Revenue Code for federal tax purposes shall also be treated as unrelated business taxable income for state tax purposes. [1973 c.115 §2; 1995 c.556 §4]

316.280 [1953 c.304 §34; 1953 c.552 §8; 1955 c.256 §1; paragraph (d) of subsection (6) of 1957 Replacement Part derived from 1955 c.256 §2; repealed by 1959 c.581 §5 (316.281 enacted in lieu of 316.280)]

316.281 [1959 c.581 §6 (enacted in lieu of 316.280); subsection (8) derived from 1959 c.581 §11; 1965 c.99 §1; repealed by 1969 c.493 §99]

(Resident Estates and Trusts)

316.282 Definitions related to trusts and estates; rules. (1) As used in this chapter:

(a) “Qualified funeral trust” has the meaning given that term in section 685 of the Internal Revenue Code.

(b) “Resident estate” means an estate of which the fiduciary is appointed by an Oregon court or the administration of which is carried on in Oregon.

(c) “Resident funeral trust” means a qualified funeral trust that, at the time of the initial funding of the trust:

(A) Is required to be established under the laws of this state; or

(B) Is established by a contract, the terms of which state that a service or merchandise is to be provided by a funeral home or cemetery located in this state.

(d) “Resident trust” means a trust, other than a qualified funeral trust, of which the fiduciary is a resident of Oregon or the administration of which is carried on in Oregon. In the case of a fiduciary that is a corporate fiduciary engaged in interstate trust administration, the residence and place of administration of a trust both refer to the place where the majority of fiduciary decisions are made in administering the trust.

(2) The taxable income of a resident estate, resident trust or resident funeral trust is its federal taxable income modified by the addition or subtraction, as the case may be, of its share of the fiduciary adjustment determined under ORS 316.287.

(3) The Department of Revenue shall adopt rules defining “trust administration” for purposes of subsection (1)(d) of this section that include within the definition activities related to fiduciary decision making and that exclude from the definition activities related to incidental execution of fiduciary decisions.

(4) The department shall adopt rules providing for simplified reporting of resident funeral trusts having a single trustee and of resident funeral trusts that are terminated during the tax year. [1969 c.493 §§42,43; 1997 c.100 §7; 1997 c.325 §42; 2003 c.50 §1]

316.285 [1953 c.304 §35; repealed by 1959 c.581 §7 (316.286 enacted in lieu of 316.285)]

316.286 [1959 c.581 §8 (enacted in lieu of 316.285); subsection (6) derived from 1959 c.581 §11; repealed by 1969 c.493 §99]

316.287 “Fiduciary adjustment” defined; shares proportioned; rules. (1) The “fiduciary adjustment” is the net amount of the modifications to federal taxable income described in this chapter (ORS 316.697 being applicable if the estate or trust is a beneficiary of another estate or trust) that relates to its items of income or deduction of an estate or trust.

(2) The respective shares of an estate or trust and its beneficiaries (including, solely for the purpose of this allocation, nonresident beneficiaries) in the fiduciary adjustment shall be in proportion to their respective shares of federal distributable net income of the estate or trust. If the estate or trust has no federal distributable net income for the taxable year, the share of each beneficiary in the fiduciary adjustment shall be in proportion to the share of the estate or trust income of the beneficiary for such year, under state law or the terms of the instrument, that is required to be distributed currently and any other amounts of such income distributed in such year. Any balance of the fiduciary adjustment shall be allocated to the estate or trust.

(3) The Department of Revenue may by rule authorize the use of such other methods of determining to whom the items comprising the fiduciary adjustment shall be attributed, as may be appropriate and equitable, on such terms and conditions as the department may require. [1969 c.493 §44; 1975 c.705 §6; 2009 c.33 §21]

316.290 [1953 c.304 §36; repealed by 1959 c.581 §9 (316.291 enacted in lieu of 316.290)]

316.291 [1959 c.581 §10 (enacted in lieu of 316.290); subsection (4) derived from 1959 c.581 §11; repealed by 1969 c.493 §99]

316.292 Credit for taxes paid another state. (1) For purposes of this section, an estate or trust is considered a resident of the state which taxes the income of the estate or trust irrespective of whether the income is derived from sources within that state.

(2) Notwithstanding the limitations contained in ORS 316.082 and 316.131, if an estate or trust is a resident of this state and also a resident of another state, the estate or trust shall be allowed a credit against the taxes imposed under this chapter for income taxes imposed by and paid to the other state, subject to the following conditions:

(a) Credit shall be allowed only for the proportion of the taxes paid to the other state as the income taxable under this chapter and also subject to tax in the other state bears to the entire income upon which the taxes paid to the other state are imposed.

(b) The credit shall not exceed the proportion of the tax payable under this chapter as the income subject to tax in the other state and also taxable under this chapter bears to the entire income taxable under this chapter. [1969 c.493 §45; 1985 c.802 §10; 1991 c.838 §7]

316.295 [1953 c.304 §37; 1965 c.202 §1; repealed by 1969 c.493 §99]

316.296 [1965 c.154 §2; repealed by 1969 c.493 §99]

316.297 [1963 c.343 §2; repealed by 1969 c.493 §99]

316.298 Accumulation distribution credit. (1) A resident beneficiary of a trust whose adjusted gross income includes all or part of an accumulation distribution by such trust, as defined in section 665 of the Internal Revenue Code, shall be allowed a credit against the tax otherwise due under this chapter for all or a proportionate part of any tax, paid by the trust under this chapter for any preceding taxable year, that would not have been payable if the trust had in fact made distribution to its beneficiaries at the times and in the amounts specified in section 666 of the Internal Revenue Code.

(2) The credit under this section shall not reduce the tax otherwise due from the beneficiary under this chapter to an amount less than would have been due if the accumulation distribution or part thereof were excluded from the adjusted gross income of the beneficiary. [1969 c.493 §46; 1997 c.839 §18; 1999 c.90 §14; 2001 c.660 §43]

316.299 [1965 c.178 §2; repealed by 1969 c.493 §99]

(Nonresident Estates and Trusts)

316.302 “Nonresident estate or trust” defined. For purposes of this chapter, a “nonresident estate or trust” means an estate or trust that is not a resident. [1969 c.493 §47; 1997 c.325 §43]

316.305 [1953 c.304 §38; 1963 c.283 §2; 1963 c.627 §7 (referred and rejected); repealed by 1969 c.493 §99]

316.306 [1955 c.608 §2; repealed by 1969 c.493 §99]

316.307 Income of nonresident estate or trust. For purposes of ORS 316.302 to 316.317:

(1) Items of income, gain, loss and deduction mean those derived from or connected with sources in this state.

(2) Items of income, gain, loss and deduction entering into the definition of federal distributable net income include such items from another estate or trust of which the first estate or trust is a beneficiary.

(3) The source of items of income, gain, loss or deduction shall be determined under regulations prescribed by the Department of Revenue in accordance with the general rules in ORS 316.127 as if the estate or trust were a nonresident individual.

(4) The income of a nonresident estate or trust consists of:

(a) Its share of items of income, gain, loss and deduction that enter into the federal definition of distributable net income;

(b) Increased or reduced by the amount of any items of income, gain, loss or deduction that are recognized for federal income tax purposes but excluded from the federal definition of distributable net income of the estate or trust;

(c) Less the amount of the deduction for its federal exemption. [1969 c.493 §48; 1983 c.684 §22]

316.310 [1953 c.304 §39; 1957 c.18 §1; repealed by 1969 c.493 §99]

316.312 Determination of Oregon share of income. (1) The share of a nonresident estate or trust of items of income, gain, loss and deduction entering into the definition of distributable net income and the share for purpose of ORS 316.127 of a nonresident beneficiary of any estate or trust in estate or trust income, gain, loss and deduction shall be determined as follows:

(a) To the amount of items of income, gain, loss and deduction that enter into the definition of distributable net income there shall be added or subtracted, as the case may be, the modifications to federal taxable income described in this chapter to the extent they relate to items of income, gain, loss and deduction that also enter into the definition of distributable net income. No modification shall be made under this section that has the effect of duplicating an item already reflected in the definition of distributable net income.

(b) The amount determined under paragraph (a) of this subsection shall be allocated among the estate or trust and its beneficiaries (including, solely for the purpose of this allocation, resident beneficiaries) in proportion to their respective shares of federal distributable net income. The amounts so allocated have the same character as for federal income tax purposes. If an item entering into the computation of such amounts is not characterized for federal income tax purposes, it has the same character as if realized directly from the source from which realized by the estate or trust, or incurred in the same manner as incurred by the estate or trust.

(c) If the estate or trust has no federal distributable net income for the taxable year, the share of each beneficiary in the net amount determined under paragraph (a) of this subsection shall be in proportion to the beneficiary’s share of the estate or trust income for such year, under state law or the terms of the instrument, that is required to be distributed currently and any other amounts of such income distributed in such year. Any balance of such net amount shall be allocated to the estate or trust.

(2) The Department of Revenue may by regulation establish such other method or methods of determining the respective shares of the beneficiaries and of the estate or trust in its income derived from sources in this state, and in the modifications related thereto, as may be appropriate and equitable. [1969 c.493 §49; 1975 c.705 §7]

316.315 [1953 c.304 §10; 1955 c.285 §1; subsection (4) of 1955 Replacement Part derived from 1955 c.285 §2; 1957 c.540 §1; 1959 c.593 §4 (referred and rejected); 1963 c.627 §8 (referred and rejected); 1967 c.127 §1; repealed by 1969 c.493 §99]

316.317 Credit to beneficiary for accumulation distribution. A nonresident beneficiary of a trust whose adjusted gross income derived from sources in this state includes all or part of an accumulation distribution by such trust, as defined in section 665 of the Internal Revenue Code, shall be allowed a credit against the tax otherwise due under this chapter, computed in the same manner and subject to the same limitation as provided by ORS 316.298 with respect to a resident beneficiary. [1969 c.493 §50]

316.320 [1953 c.304 §41; 1957 c.73 §1; 1965 c.410 §5; repealed by 1969 c.493 §99]

316.325 [1953 c.304 §42; repealed by 1969 c.493 §99]

316.330 [1953 c.304 §43; 1955 c.580 §1; repealed by 1969 c.493 §99]

316.335 [1953 c.304 §44; 1957 s.s. c.15 §3; repealed by 1969 c.493 §99]

316.336 [1961 c.608 §2; repealed by 1969 c.493 §99]

316.337 [1957 c.16 §2; repealed by 1969 c.493 §99]

316.340 [1953 c.304 §45; 1953 c.552 §9; 1955 c.589 §1; repealed by 1969 c.493 §99]

316.342 [1969 c.493 §51; repealed by 1989 c.625 §27 (314.712 enacted in lieu of 316.342)]

316.345 [1953 c.304 §46; 1953 c.552 §10; 1959 c.593 §5 (referred and rejected); 1963 c.627 §9 (referred and rejected); 1965 c.337 §1; repealed by 1969 c.493 §99]

316.347 [1969 c.493 §52; repealed by 1989 c.625 §29 (314.714 enacted in lieu of 316.347)]

316.350 [1953 c.304 §47; repealed by 1969 c.493 §99]

316.352 [1969 c.493 §53; 1975 c.705 §8; repealed by 1989 c.625 §31 (316.124 enacted in lieu of 316.352)]

316.353 [1957 s.s. c.15 §6; subsection (6) derived from 1957 s.s. c.15 §8; 1959 c.92 §1; 1963 c.627 §12 (referred and rejected); 1965 c.410 §6; repealed by 1969 c.493 §99]

316.355 [1953 c.304 §48; repealed by 1969 c.493 §99]

316.360 [1953 c.304 §49; repealed by 1969 c.493 §99]

RETURNS; PAYMENTS; REFUNDS

316.362 Persons required to make returns. (1) An income tax return with respect to the tax imposed by this chapter shall be made by the following:

(a) Every resident individual:

(A) Who is required to file a federal income tax return for the taxable year; or

(B) Who has gross income greater than the sum of:

(i) The basic standard deduction allowed under ORS 316.695 (1)(c)(B);

(ii) Any additional standard deduction allowed to the taxpayer under ORS 316.695 (7); and

(iii) An amount equal to the income equivalent of one personal exemption credit under ORS 316.085 (3)(b) if unmarried, or equal to the income equivalent of two personal exemption credits under ORS 316.085 (3)(b) if married.

(b) Every nonresident individual who has federal gross income from sources in this state of more than the basic standard deduction allowed under ORS 316.695 (1)(c)(B).

(c) Every resident estate or trust that is required to file a federal income tax return.

(d) Every nonresident estate that has federal gross income of $600 or more for the taxable year from sources within this state.

(e) Every nonresident trust that for the taxable year has from sources within this state any taxable income, or gross income of $600 or more regardless of the amount of taxable income.

(2) Nothing contained in this section shall preclude the Department of Revenue from requiring any individual, estate or trust to file a return when, in the judgment of the department, a return should be filed.

(3) For purposes of this section, the income equivalent of a personal exemption credit under ORS 316.085 (3)(b) shall be determined as follows:

(a) Divide the personal exemption credit amount by the rate applicable to the lowest income bracket under ORS 316.037.

(b) If the resulting quotient is less than the maximum amount of income subject to the rate used in paragraph (a) of this subsection, the quotient is the income equivalent.

(c) If the resulting quotient is more than the maximum amount of income subject to the rate used in paragraph (a) of this subsection:

(A) Multiply the maximum amount of income subject to the rate used in paragraph (a) of this subsection by the rate used in paragraph (a) of this subsection.

(B) Determine the difference between the product calculated under subparagraph (A) of this paragraph and the personal exemption credit amount.

(C) Divide the difference determined in subparagraph (B) of this paragraph by the rate applicable to the income bracket that is the next succeeding the lowest income bracket under ORS 316.037.

(D) Add the quotient determined in subparagraph (C) of this paragraph to the maximum amount of income subject to the rate used in paragraph (a) of this subsection. The sum is the income equivalent. [1969 c.493 §54; 1983 c.740 §90; 2001 c.77 §6; 2001 c.660 §15]

316.363 Returns; instructions. The instructions to the individual state income tax return form required to be filed by this chapter shall:

(1) Be written in simple words used in their commonly understood senses that convey meanings clearly and directly;

(2) Be written in primarily simple, rather than compound or complex, sentences that are as short as possible;

(3) Limit the use of definitions to definitions of words that cannot be properly explained or qualified in the text;

(4) Include an index at the beginning of the instructions to provide a useful guide to the use of the form. The index shall give a comprehensive listing of return form parts in a logical sequence, and the index listings shall clearly state the contents of each section;

(5) Have the text of the instructions printed in roman type at least as large as 10-point modern type, two points leaded;

(6) Have margins that are adequate for purposes of readability, and have a line length of the text not exceeding four inches for a column;

(7) Have section headings printed in a contrasting color, typeface or size; and

(8) Be printed so that the contrast and legibility of the ink and paper used is substantially the equivalent of black ink on white paper. [1977 c.736 §2]

316.364 Flesch Reading Ease Score form instructions. (1) The instructions to an individual state income tax return form shall have a total Flesch Reading Ease Score of 60 or higher.

(2) As used in this section:

(a) “Flesch Reading Ease Score” means 206.835 - (x + y) where x equals average sentence length multiplied by 1.015 and y equals average word length multiplied by 84.6.

(b) “Average sentence length” means the total number of words in the instructions to the state income tax return form divided by the total number of sentences in the instructions.

(c) “Average word length” means the total number of syllables in the instructions to the state income tax return form divided by the total number of words in the instructions. [1977 c.736 §3]

316.365 [1953 c.304 §50; 1953 c.552 §11; 1957 c.586 §15; 1959 c.593 §6 (referred and rejected); 1961 c.411 §1; 1963 c.627 §13 (referred and rejected); repealed by 1969 c.493 §99]

316.366 Schedule for collection of taxpayer self-reported demographic data. (1) The Department of Revenue shall attach to personal income tax returns required to be filed under this chapter a schedule that allows taxpayers to provide to the department, at the time of filing the return and on a voluntary basis, self-reported identification of the taxpayer’s race and ethnicity.

(2) The data collection schedule required under subsection (1) of this section must:

(a) Allow each taxpayer to select from the full list of demographic data categories of racial or ethnic identity adopted as uniform standards by the Oregon Health Authority pursuant to ORS 413.161.

(b) Allow each individual listed on a return to select one primary identifier and as many as two additional identifiers.

(c) Provide that individuals filing a joint return may each elect whether to indicate identifiers on the schedule.

(d) Be accompanied by the statement that the collection of data is voluntary and self-reported and that the department may not use the collected data for the purposes of audit, collection or other enforcement activities.

(e) Be accompanied by a statement explaining the purpose of collecting data for use in analysis of revenue policy.

(f) Be optional to complete, but provide that individuals shall opt out of completion of the schedule.

(3) The department shall establish policies and procedures to enable individuals who are not required to file an income tax return under this chapter for a given tax year to elect to complete the schedule provided under this section without filing a return. [2023 c.563 §2]

316.367 Joint return by spouses in a marriage. Spouses in a marriage may make a joint return with respect to the tax imposed by this chapter even though one of the spouses has neither gross income nor deductions, except that:

(1) No joint return shall be made under this chapter if the spouses are not permitted to file a joint federal income tax return;

(2) If the federal income tax liability of either spouse is determined on a separate federal return, their income tax liabilities under this chapter shall be determined on separate returns;

(3) If the federal income tax liabilities of the spouses are determined on a joint federal return, they shall file a joint return under this chapter and their tax liabilities shall be joint and several; and

(4) If neither spouse is required to file a federal income tax return and either or both are required to file an income tax return under this chapter, they may elect to file separate or joint returns and pursuant to such election their liabilities shall be separate or joint and several. [1969 c.493 §55; 1985 c.802 §9; 2015 c.629 §43]

316.368 When joint return liability divided; showing of marital status and hardship; rules. Notwithstanding ORS 316.367, upon petition to the Director of the Department of Revenue by one spouse who has filed a joint tax return, the Department of Revenue may terminate the joint and several liability of each spouse and divide the liability equally between both spouses for the tax, penalty and interest due for the tax year that is the subject of the joint return. No petition shall be granted unless at the time of the petition, the spouses are living apart and are legally separated or divorced, and the petitioner satisfies the department that the petitioner is unable to pay the entire liability due to financial hardship. The department shall adopt rules establishing the manner in which a petitioner shall show financial hardship. [1993 c.593 §8]

316.369 Circumstances where one spouse relieved of joint return liability; rules. If a joint return has been made under this chapter for a tax year, a spouse shall be relieved of liability for tax, including interest, penalties and other amounts, for the tax year:

(1) If the Internal Revenue Service has made a determination that relieved the spouse of liability for federal taxes for the same tax year under Internal Revenue Code provisions that provide for spouse relief from liability; or

(2) If the Internal Revenue Service has not made a determination that relieved the spouse of liability for the tax year, but the spouse qualifies to be relieved of state tax liability under rules adopted by the Department of Revenue. In adopting rules under this subsection, the department shall consider the provisions of the Internal Revenue Code and regulations issued thereunder that provide for spouse relief from liability for federal taxes. [1983 c.627 §§2,3; 1985 c.802 §9a; 1999 c.90 §15; 2001 c.660 §7]

316.370 [1953 c.304 §51; repealed by 1969 c.493 §99]

316.371 [1989 c.625 §12; repealed by 2001 c.660 §9]

316.372 Minor to file return; unpaid tax assessable against parent; when parent may file for minor. (1) As used in this section, “parent” includes an individual who is entitled to the services of a minor by reason of having parental rights and duties with respect to the minor.

(2) Except as provided in subsection (3) of this section, a minor shall file a return and include on the return all items of the minor’s income, including income attributable to personal services. Income included on the minor’s return shall not be included on the return of the parent. All expenditures by the parent or the minor attributable to the minor’s income are considered to have been paid or incurred by the minor. However, any tax assessed against the minor that is attributable to income from personal services and that is not paid by the minor is for all purposes considered to be properly assessed against the parent.

(3) If a parent is eligible to elect and elects to include the interest and dividend income of a child on the parent’s federal income tax return under section 1(g)(7)(B) of the Internal Revenue Code, the parent shall be considered to have elected to include the interest and dividend income of the child on the return filed by the parent for the same taxable period for purposes of this chapter. The child need not in such case file a return for purposes of this chapter for the taxable period to which the election applies. [1969 c.493 §56; 1989 c.625 §13a; 1991 c.457 §7a; 2015 c.480 §11]

316.375 [1953 c.304 §52; 1957 c.16 §3; repealed by 1969 c.493 §99]

316.377 Individual under disability. An income tax return for an individual who is unable to make a return by reason of minority or other disability shall be made and filed by a duly authorized agent of the individual, guardian, conservator, fiduciary or other person charged with the care of the person or property of the individual other than a receiver in possession of only a part of the individual’s property. [1969 c.493 §57; 1985 c.761 §13]

316.380 [1953 c.304 §53; repealed by 1969 c.493 §99]

316.382 Returns by fiduciaries. (1) An income tax return, in the name of the decedent, for any deceased individual shall be made and filed by a personal representative or other person charged with the care of the property, and this duty extends to any unfiled return prior to decedent’s death. The tax shall be levied upon and collected from the estate. A final return of a decedent shall be due when it would have been due if the decedent had not died.

(2) The income tax return of an estate or trust shall be made and filed by the fiduciary thereof, whether the income is taxable to the estate or trust or to the beneficiaries thereof. If two or more fiduciaries are acting jointly, the return may be made by any one of them. [1969 c.493 §58; 1975 c.705 §9]

316.385 [1963 c.435 §2; repealed by 1969 c.493 §99]

316.387 Election for final tax determination by personal representative; period for assessment of deficiency; discharge of personal representative from personal liability for tax. (1) In the case of any tax for which a return is required under this chapter from a decedent or a decedent’s estate during the period of administration, the Department of Revenue may give notice of deficiency as described in ORS 305.265 within 18 months after a written election for a final tax determination is made by the personal representative, administrator, trustee or other fiduciary representing the estate of the decedent. This election must be filed after the return is made and filed in the form and manner as may be prescribed by the department by rule.

(2) Notwithstanding the provisions of subsection (1) of this section, 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) The limitations to the giving of a notice of deficiency provided in this section shall not apply to a deficiency resulting from false or fraudulent returns, or in cases where no return has been filed. If the Commissioner of Internal Revenue or other authorized official of the federal government makes a correction resulting in a change of the decedent’s or the estate of the decedent’s tax for state income tax purposes, then notice of a deficiency under any law imposing tax upon or measured by income for the corresponding tax year may be mailed within one year after the department is notified by the fiduciary or the commissioner of such federal correction, or within the applicable 18-month or five-year period prescribed in subsections (1) and (2) of this section, respectively, whichever period later expires.

(4) After filing the decedent’s return, the personal representative, administrator, trustee or other fiduciary may apply in writing for discharge from personal liability for tax on the decedent’s income. After paying any tax for which the personal representative, administrator, trustee or other fiduciary is subsequently notified, or after expiration of nine months since receipt of the application and during which no notification of tax liability is made, the discharge becomes effective. A discharge under this subsection does not discharge the personal representative, administrator, trustee or other fiduciary from liability to the extent that assets of the decedent’s estate are still in the possession or control of the personal representative, administrator, trustee or other fiduciary. The failure of a personal representative to make application and otherwise proceed under this subsection shall not affect the protection available to the personal representative under ORS 116.123 and 116.213.

(5) For the purpose of facilitating the settlement and distribution of estates held by fiduciaries, the department, on behalf of the state, may agree upon the amount of taxes at any time due or to become due from such fiduciaries under this chapter or transferees of an estate as provided in ORS 314.310 with respect to a tax return or returns of or for a decedent individual or an estate or trust, and payment in accordance with such agreement shall be in full satisfaction of the taxes to which the agreement relates. [1969 c.493 §59; 1971 c.333 §3; 1995 c.453 §5; 2017 c.169 §60]

316.390 [1963 c.435 §3; repealed by 1969 c.493 §99]

316.392 Notice of qualification of receiver and others. Every receiver, trustee in bankruptcy, assignee for benefit of creditors or other like fiduciary, shall give notice of qualification as such to the Department of Revenue, as may be required by regulation. [1969 c.493 §60]

316.397 [1969 c.493 §61; 1971 c.332 §1; 1975 c.672 §7; 1978 c.9 §3; 1981 c.801 §5; repealed by 1983 c.684 §24]

316.402 [1969 c.493 §62; repealed by 1971 c.332 §2]

316.405 [1975 c.410 §2; 1967 c.110 §1; repealed by 1969 c.493 §99]

316.406 [1959 c.591 §21; repealed by 1965 c.410 §7]

316.407 [1969 c.493 §63; 1971 c.354 §6; 1975 c.593 §18; 1979 c.470 §1; 1980 c.7 §23; repealed by 1989 c.625 §60]

316.408 [1959 c.591 §2; 1963 c.388 §3; 1963 c.627 §14 (referred and rejected); repealed by 1965 c.410 §7]

316.410 [1959 c.591 §3; repealed by 1965 c.410 §7]

316.411 [1963 c.388 §§2,4; repealed by 1965 c.410 §7]

316.412 [1959 c.591 §4; repealed by 1963 c.627 §23 (referred and rejected); repealed by 1965 c.410 §7]

316.414 [1959 c.591 §5; repealed by 1963 c.627 §23 (referred and rejected); repealed by 1965 c.410 §7]

316.415 [1965 c.410 §3; repealed by 1969 c.493 §99]

316.417 [1969 c.493 §64; 1993 c.44 §3; repealed by 2025 c.371 §9]

316.420 [1959 c.591 §6; repealed by 1963 c.627 §23 (referred and rejected); repealed by 1965 c.410 §7]

316.422 [1969 c.493 §65; repealed by 1971 c.354 §7]

316.425 [1965 c.410 §4; repealed by 1969 c.493 §99]

316.426 [1959 c.591 §7; repealed by 1963 c.627 §23 (referred and rejected); repealed by 1965 c.410 §7]

316.430 [1959 c.591 §8; repealed by 1963 c.627 §23 (referred and rejected); repealed by 1965 c.410 §7]

316.432 [1959 c.591 §9; repealed by 1963 c.627 §23 (referred and rejected); repealed by 1965 c.410 §7]

316.434 [1959 c.591 §10; repealed by 1963 c.627 §23 (referred and rejected); repealed by 1965 c.410 §7]

316.436 [1959 c.591 §11; repealed by 1963 c.627 §23 (referred and rejected); repealed by 1965 c.410 §7]

316.438 [1959 c.591 §12; repealed by 1963 c.627 §23 (referred and rejected); repealed by 1965 c.410 §7]

316.440 [1959 c.591 §13; repealed by 1965 c.410 §7]

316.442 [1959 c.591 §14; repealed by 1965 c.410 §7]

316.444 [1959 c.591 §15; repealed by 1965 c.410 §7]

316.446 [1959 c.591 §16; repealed by 1965 c.410 §7]

316.448 [1959 c.591 §17; repealed by 1965 c.410 §7]

316.450 [1959 c.591 §18; repealed by 1965 c.410 §7]

316.454 [1965 c.248 §3; repealed by 1969 c.493 §99]

316.455 [1953 c.304 §54; 1953 c.552 §12; 1955 c.596 §2; 1957 c.586 §2; 1957 s.s. c.15 §4; 1963 c.486 §1; 1963 c.627 §15 (referred and rejected); 1965 c.248 §1; repealed by 1969 c.493 §99]

316.457 Department may require copy of federal return. If directed to do so by the Department of Revenue, through regulations or instructions upon the state income tax return form, every taxpayer required by this chapter to file an income tax return with the department shall also file with such return a true copy of the federal tax return filed by the taxpayer pursuant to the requirements of the Internal Revenue Code for the same taxable year. The department may, in its discretion, promulgate regulations or instructions that permit taxpayers to submit specified excerpts from federal returns in lieu of submitting copies of the entire federal return. The federal return or any part thereof required to be filed with the state income tax return is incorporated in and shall be a part of the state income tax return. [1969 c.493 §66; 1977 c.872 §6]

316.462 Change of election. Any election expressly authorized by this chapter may be changed on such terms and conditions as the Department of Revenue may prescribe by regulation. [1969 c.493 §67]

316.467 [1969 c.493 §68; 1985 c.602 §14; renumbered 314.724 in 1989]

316.472 Tax treatment of common trust fund; information return required. (1) The tax treatment of common trust funds and participants therein, under this chapter, is governed by the provisions of the Internal Revenue Code.

(2) Every financial institution or trust company maintaining a common trust fund shall make a return to the Department of Revenue for each tax year, stating specifically, with respect to such fund, the items of gross income and deductions, and shall include in the return information sufficient to identify the trusts and estates entitled to share in the net income of the common trust fund and the amount of the proportionate share of each such participant. The return shall be made at such time as is designated by the department. [1969 c.493 §69; 1997 c.631 §456]

316.475 [Formerly 316.080; 1961 c.218 §1; repealed by 1969 c.493 §99]

316.480 [1967 c.592 §7; 1969 c.340 §2; repealed by 1969 c.493 §99; see 316.097]

316.485 [1981 c.411 §1; 1989 c.987 §18; repealed by 1995 c.79 §166]

316.487 [1987 c.902 §7; repealed by 1993 c.797 §33]

316.490 [1987 c.902 §2; 1989 c.987 §25; 2007 c.822 §16; repealed by 2021 c.8 §14]

316.491 [2005 c.836 §11; 2007 c.822 §17; repealed by 2021 c.8 §14]

316.493 [1987 c.771 §2; 1989 c.987 §19; 1999 c.1084 §40; 2007 c.822 §18; repealed by 2021 c.8 §14]

316.495 [1989 c.987 §32; repealed by 1995 c.79 §166]

DISTRIBUTION OF REVENUE

316.502 Distribution of revenue to General Fund; working balance; refundable credit payments. (1) The net revenue from the tax imposed by this chapter, after deducting refunds and amounts described in ORS 285B.630 and 285C.635, 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.

(2) A working balance of unreceipted revenue from the tax imposed by this chapter may be retained for the payment of refunds, but such working balance shall not at the close of any fiscal year exceed the sum of $1 million.

(3) Moneys are continuously appropriated to the Department of Revenue to make:

(a) The refunds authorized under subsection (2) of this section; and

(b) The refund payments in excess of tax liability authorized under ORS 315.133, 315.262, 315.264, 315.266, 315.273, 315.519 and 316.090 and section 3, chapter 589, Oregon Laws 2021. [1969 c.493 §70; 1977 c.761 §2; 2003 c.473 §12; 2005 c.826 §§4,4a; 2005 c.832 §§55,60; 2007 c.843 §§84,85,86,87; 2007 c.868 §§6,6a,7,7a; 2007 c.906 §§19,19a,20,20a; 2011 c.83 §17; 2013 c.722 §53; 2013 c.750 §47; 2013 c.763 §7; 2015 c.701 §4; 2021 c.589 §9; 2022 c.115 §13; 2023 c.298 §9; 2023 c.538 §8; 2023 c.602 §47a; 2024 c.70 §65a; 2025 c.36 §5]

316.505 [1953 c.304 §55; 1953 c.552 §13; 1955 c.596 §3; subsection (3) derived from 1955 c.596 §4; 1957 c.586 §3; 1963 c.627 §16 (referred and rejected); repealed by 1969 c.493 §99]

316.510 [1953 c.304 §56; 1957 c.586 §4; repealed by 1969 c.493 §99]

316.512 [1965 c.592 §2; repealed by 1969 c.493 §99]

316.513 [1965 c.592 §3; repealed by 1969 c.493 §99]

316.515 [1953 c.304 §57; repealed by 1969 c.493 §99]

316.520 [1953 c.304 §58; repealed by 1957 c.632 §1 (314.355 enacted in lieu of 316.520)]

316.525 [1953 c.304 §59; repealed by 1969 c.493 §99]

316.530 [1953 c.304 §60; repealed by 1969 c.493 §99]

316.535 [1953 c.304 §61; repealed by 1957 c.632 §1 (314.360 enacted in lieu of 316.535)]

316.540 [1953 c.304 §62; repealed by 1969 c.493 §99]

316.545 [1953 c.304 §63; repealed by 1957 c.632 §1 (314.385 enacted in lieu of 316.545 and 317.355)]

316.550 [1953 c.304 §64; repealed by 1957 c.632 §1 (314.365 enacted in lieu of 316.550 and 317.365)]

316.555 [1953 c.304 §65; repealed by 1957 c.632 §1 (314.370 enacted in lieu of 316.555)]

PAYMENT OF ESTIMATED TAXES

316.557 Definition of “estimated tax.” As used in ORS 316.557 to 316.589, “estimated tax” means the amount of income tax imposed under this chapter for the taxable year, as estimated by the individual, minus the sum of any credits as estimated by the individual against tax provided by this chapter. [1980 c.7 §4; 1985 c.603 §4; 1997 c.839 §21; 1999 c.90 §16; 2001 c.660 §44]

316.559 Application of ORS 316.557 to 316.589 to estates and trusts. ORS 316.557 to 316.589 do not apply to an estate or trust. [1980 c.7 §9]

316.560 [1953 c.304 §66; repealed by 1957 c.632 §1 (314.295 enacted in lieu of 316.560 and 317.375)]

316.563 When declaration of estimated tax required; exception; effect of short tax year; content; amendment; rules. (1) Except as provided in subsection (2) of this section, every individual shall declare an estimated tax for the taxable year if:

(a) The gross income for the taxable year can be reasonably expected to include more than $1,000 from sources other than wages as defined in ORS 316.162 (2); or

(b) The gross income for the taxable year can be reasonably expected to exceed:

(A) $20,000 in the case of:

(i) A single individual, including a head of household as defined in section 2(b) of the Internal Revenue Code, or a surviving spouse as defined in section 2(a) of the Internal Revenue Code; or

(ii) A married individual entitled under ORS 316.567 to file a joint declaration with a spouse, but only if the spouse has not received wages, as defined in ORS 316.162 (2) for the taxable year; or

(B) $10,000 in the case of a married individual entitled under ORS 316.567 to file a joint declaration with a spouse, but only if each spouse has received wages as defined in ORS 316.162 (2) for the taxable year; or

(C) $5,000 in the case of a married individual not entitled under ORS 316.567 to file a joint declaration with a spouse.

(2) No declaration is required if the estimated tax as defined in ORS 316.557 is less than the amount established by rule of the Department of Revenue. The department shall consider the provisions of section 6654 of the Internal Revenue Code in determining the amount.

(3) An individual with a taxable year of less than 12 months shall make a declaration in accordance with rules adopted by the Department of Revenue.

(4) An individual may amend the declaration filed during the taxable year under rules prescribed by the department.

(5) The declaration shall contain information required by the department by rule. [1980 c.7 §§2,2a,5,8; 1981 c.678 §1a; 1987 c.293 §21; 1997 c.839 §22; 1999 c.90 §17; 2001 c.660 §45]

316.565 [1953 c.304 §67; repealed by 1957 c.632 §1 (314.380 enacted in lieu of 316.565 and 317.380)]

316.567 Joint declaration of spouses in a marriage; liability; effect on nonjoint returns; rules. (1) Except as provided in subsection (2) of this section, spouses in a marriage may make a single declaration jointly under ORS 316.557 to 316.589. The liability of the spouses making such a declaration shall be joint and several.

(2) Spouses may not make a joint declaration:

(a) If either spouse is a nonresident noncitizen;

(b) If the spouses are separated under a judgment of divorce or of separate maintenance; or

(c) If the spouses have different taxable years.

(3) If spouses make a joint declaration but not a joint return for the taxable year, the spouses may, in such manner as they may agree, and after giving notice of the agreement to the Department of Revenue:

(a) Treat the estimated tax for the year as the estimated tax of either spouse; or

(b) Divide the estimated tax between them.

(4) If the spouses fail to agree, or fail to notify the department of the manner in which they agree, to the treatment of estimated tax for a taxable year for which they make a joint declaration but not a joint return, the payments shall be allocated between them according to rules adopted by the department. Notwithstanding ORS 314.835, 314.840 or 314.991, the department may disclose to either spouse the information upon which an allocation of estimated tax was made under this section. [1980 c.7 §3; 1985 c.603 §5; 2003 c.576 §432; 2015 c.629 §44; 2022 c.97 §9]

316.569 When declaration required of nonresident. No declaration shall be required of a nonresident individual under ORS 316.557 to 316.589 unless:

(1) Withholding under this chapter is made applicable to the wages, as defined in ORS 316.162, of the nonresident individual; or

(2) The nonresident individual has income, other than compensation for personal services subject to deduction and withholding under ORS 316.162, which is effectively connected with the conduct of a trade or business within this state. [1980 c.7 §10; 1985 c.603 §6]

316.570 [1953 c.304 §68; 1957 c.586 §16; 1959 c.632 §1; 1961 c.504 §2; 1969 c.166 §6; repealed by 1969 c.493 §99]

316.573 When individual not required to file declaration. (1) An individual need not file a declaration of estimated tax required by ORS 316.563 (1), if:

(a) The estimated gross income of the individual from farming or fishing, including oyster farming, for the taxable year is at least two-thirds of the total estimated gross income from all sources for the taxable year; or

(b) The gross income of the individual from farming or fishing, including oyster farming, shown on the return of the individual in the preceding taxable year is at least two-thirds of the total gross income from all sources shown on such return.

(2) For purposes of computing gross income under this section, an individual who is a stockholder of one or more electing small business corporations for federal income tax purposes shall consider his or her share of the gross income of the electing small business corporation as his or her individual income. The electing small business corporation gross income shall be classed as farming, fishing, nonfarming or nonfishing as the case may be in carrying out the provisions of this section. [1980 c.7 §12]

316.575 [1953 c.304 §69; 1955 c.595 §1; repealed by 1957 c.586 §19]

316.577 Date of filing declaration. Except as provided in ORS 316.573, declarations of estimated tax required by ORS 316.563 (1) from individuals who are neither farmers nor fishermen for the purpose of that section shall be filed on or before April 18 of the taxable year or the due date of the return for the prior taxable year without regard to extensions, whichever is earlier, except that if the requirements of ORS 316.563 (1) are first met:

(1) After April 1 and before June 2 of the taxable year, the declaration shall be filed on or before June 15 of the taxable year;

(2) After June 1 and before September 2 of the taxable year, the declaration shall be filed on or before September 15 of the taxable year; or

(3) After September 1 of the taxable year, the declaration shall be filed on or before January 15 of the succeeding year. [1980 c.7 §11; 1981 c.678 §2; 1983 c.162 §64; 2003 c.46 §41; 2021 c.9 §1]

316.579 Amount of estimated tax to be paid with declaration; installment schedule; prepayment of installment. (1) An individual required to make a declaration of estimated tax under ORS 316.563 shall pay the estimated tax as provided in subsections (2) to (6) of this section.

(2) If the declaration is filed on or before April 18 of the taxable year, the estimated tax shall be paid in four equal installments. The first installment shall be paid at the time of the filing of the declaration, the second and third on June 15 and September 15 of the taxable year, and the fourth on January 15 of the succeeding year.

(3) If the declaration is filed after the due date of the prior taxable year return without regard to extensions and not after June 15 of the taxable year, and is not required by ORS 316.577 to be filed on or before April 18 of the taxable year, the estimated tax shall be paid in three equal installments. The first installment shall be paid at the time of the filing of the declaration, the second on September 15 of the calendar year, and the third on January 15 of the succeeding taxable year.

(4) If the declaration is filed after June 15 and not after September 15 of the taxable year, and is not required by ORS 316.577 to be filed on or before June 15 of the taxable year, the estimated tax shall be paid in two equal installments. The first installment shall be paid at the time of filing of the declaration, and the second on January 15 of the succeeding taxable year.

(5) If the declaration is filed after September 15 of the taxable year and is not required by ORS 316.577 to be filed on or before September 15 of the taxable year, the estimated tax shall be paid in full at the time of filing of the declaration.

(6) If the declaration is filed after the time prescribed in ORS 316.577, subsections (3) to (5) of this section shall not apply. Instead, there shall be paid at the time of filing all installments of estimated tax that would have been payable on or before such time if the declaration had been filed within the time prescribed in ORS 316.577, and the remaining installments shall be paid at the times at which, and in the amounts in which, they would have been payable if the declaration had been so filed.

(7) If a taxpayer does not file a declaration but files a return on or before January 31 of the succeeding year and pays in full the amount stated as due on the return:

(a) If the declaration is not required to be filed during the taxable year, but is required to be filed on or before January 15, the return shall be considered as the declaration; and

(b) If the tax shown on the return, as reduced by the sum of the credits against the tax allowed for purposes of this chapter, is greater than the estimated tax shown in an earlier declaration, or in the last amendment thereof, the return shall be considered as the amendment of the declaration permitted by ORS 316.563 (4) to be filed on or before January 15.

(8) In the application of this section to a taxable year beginning on any date other than January 1, there shall be substituted for the 15th or last day of the month specified in this section, the 15th or last day of the corresponding month.

(9) An individual may pay an installment of the estimated tax before the date prescribed for its payment.

(10) Any payment of estimated tax received by the Department of Revenue shall first be applied to underpayments of estimated tax due for any prior installment due for the taxable year. Any excess amount shall be applied to the installment that next becomes due after the payment was received. [1980 c.7 §§16,20; 1981 c.678 §3; 1985 c.603 §7; 1987 c.293 §22; 1993 c.730 §43; 2003 c.46 §42; 2021 c.9 §2]

316.580 [1953 c.304 §70; 1955 c.595 §2; 1957 c.586 §17; renumbered 316.751]

316.583 Effect of payment of estimated tax or installment; credit for overpayment of prior year taxes; rules. (1) Payment of the estimated income tax or any installment shall be considered payment on account of the income taxes imposed by this chapter for the taxable year.

(2) If there is an overpayment of income tax for a taxable year, the taxpayer may elect on a timely filed return for that taxable year (determined with regard to any extension of time for filing) to have the overpayment credited against an installment of estimated tax for the subsequent taxable year. The amount paid shall be credited as estimated tax on the later of the first date prescribed for payment of the estimated tax or the date that the taxpayer made the overpayment to the department.

(3) If there is an overpayment of income taxes for a taxable year, and the taxpayer elects on a return (including an amended return) for that taxable year filed after the due date (determined with regard to any extension of time for filing) to have the overpayment credited against an installment of estimated tax for a subsequent taxable year, the overpayment shall be credited against that installment of estimated tax. The amount paid shall be credited as estimated tax on the later of the date the return was filed or the date that the taxpayer made the overpayment to the department.

(4) The Department of Revenue may adopt rules which enable the taxpayer or department to credit against the estimated income tax the amount the taxpayer or the department determines to be an overpayment of the income tax for a preceding taxable year. [1980 c.7 §§19,21; 1993 c.726 §35; 2017 c.24 §1]

316.585 [1953 c.304 §71; 1955 c.595 §3; 1957 c.586 §18; renumbered 316.770]

316.587 Effect of underpayment of estimated tax; computation of underpayment; interest; when not imposed. (1) Except as provided in subsection (5) of this section, if an individual makes an underpayment of estimated tax, interest shall accrue at the rate established under ORS 305.220 on the amount underpaid for the period the estimated tax or any installment remains unpaid. The penalty provisions contained in ORS chapter 314 for underpayment of tax shall not apply to underpayments of estimated tax under ORS 316.557 to 316.589.

(2) For purposes of subsection (1) of this section, the amount of underpayment shall be the excess of the required installment over the amount (if any) of the installment paid on or before the due date for the installment.

(3) The period of underpayment shall run from the date the installment was due to the earlier of the following dates:

(a) The 15th day of the fourth month following the close of the taxable year; or

(b) With respect to any portion of the underpayment, the date on which the portion is paid.

(4) For purposes of subsection (3)(b) of this section, a payment of estimated tax shall be credited against unpaid required installments in the order in which such installments are required to be paid.

(5)(a) Interest accruing under subsection (1) of this section shall not be imposed if the individual was a resident of this state throughout the preceding taxable year and had no tax liability for that year, and the preceding taxable year was a taxable year of 12 months.

(b) Interest accruing under subsection (1) of this section shall not be imposed with respect to any underpayment of estimated tax to the extent that the Department of Revenue determines that by reason of casualty, disaster or other unusual circumstances the imposition of interest would be against equity and good conscience.

(c) Interest accruing under subsection (1) of this section shall not be imposed with respect to any underpayment of estimated tax if the department determines that:

(A) In the tax year the estimated tax payment was required to be made or in the tax year preceding such tax year, the taxpayer (i) retired after having attained age 62 or (ii) became disabled; and

(B) The underpayment was due to reasonable cause and not to willful neglect.

(d) Interest accruing under subsection (1) of this section shall not be imposed with respect to any underpayment of estimated tax attributable to the pro rata share of a shareholder of the income of an S corporation if:

(A) The income is taxable income for an initial year for which S corporation status is elected for the corporation; and

(B) The shareholder is a nonresident or for the preceding taxable year was a part-year resident for Oregon tax purposes.

(6) For purposes of this section, the estimated tax shall be computed without any reduction for the amount of credit estimated to be allowed to the individual for the taxable year under ORS 316.187. The amount of the credit allowed under ORS 316.187 for the taxable year shall be considered a payment of estimated tax. An equal part of the credit shall be considered paid on each installment date for the taxable year, unless the taxpayer establishes the date on which all amounts were actually withheld, in which case the amount so withheld shall be considered payment of estimated tax on the dates on which the amounts were actually withheld.

(7) For purposes of subsections (5) and (8) of this section, the term “tax” means the tax imposed by this chapter minus any credits against tax allowed for purposes of this chapter, other than the credit against tax provided by ORS 316.187.

(8) For purposes of subsections (2) and (4) of this section, the term “required installment” means the amount of the installment that would be due if the estimated tax were equal to the least of:

(a) Ninety percent of the tax shown on the return for the taxable year (or, if no return is filed, 90 percent of the tax for such year);

(b) If the preceding taxable year was a taxable year of 12 months, the percentage of the tax shown on the return filed by the individual for the preceding taxable year that is established by the Department of Revenue by rule; or

(c) Ninety percent of the tax for the taxable year computed by placing on an annualized basis the taxable income for the months in the taxable year ending before the month in which the installment is required to be paid.

(9) For purposes of subsection (8) of this section:

(a) If an amended return is filed on or before the return due date (determined with regard to any extension of time granted to the taxpayer), then the term “return” means the amended return.

(b) If during initial processing of the return the department adjusts the amount of tax due, then the term “tax shown on the return” means the tax as adjusted by the department. This paragraph shall not apply if it is ultimately determined that the adjustment was improper.

(c) The department shall consider the provisions of section 6654 of the Internal Revenue Code. [1980 c.7 §22; 1982 s.s.1 c.16 §21; 1985 c.603 §8; 1987 c.293 §22a; 1989 c.625 §13b; 1991 c.457 §7h; 1993 c.726 §35a; 1995 c.556 §5; 1999 c.90 §18; 2001 c.660 §4; 2017 c.278 §11; 2017 c.315 §25]

316.588 When interest on underpayment not imposed. (1) Interest accruing under ORS 316.587 shall not be imposed for any taxable year if the tax shown on the return for the taxable year (or, if no return is filed, the tax), minus the sum of any credits allowable for purposes of this chapter, including the credit allowable under ORS 316.187, is less than the amount established by rule adopted under ORS 316.563 (2).

(2) For purposes of this section:

(a) If an amended return is filed on or before the return due date (determined with regard to any extension of time granted to the taxpayer), then the term “return” means the amended return.

(b) If during initial processing of the return the Department of Revenue adjusts the amount of tax due, then the term “tax shown on the return” means the tax as adjusted by the department. This paragraph shall not apply if it is ultimately determined that the adjustment was improper. [1987 c.293 §22c; 1993 c.726 §35b; 1999 c.90 §19; 2001 c.660 §5]

316.589 Application to short tax years and tax years beginning on other than January 1. (1) The application of ORS 316.557 to 316.589 to taxable years of less than 12 months shall be in accordance with rules adopted by the Department of Revenue.

(2) In the application of ORS 316.557 to 316.589 to a taxable year beginning on any date other than January 1 there shall be substituted, for the months specified in ORS 316.557 to 316.589, the months which correspond thereto. [1980 c.7 §§14,15; 1985 c.603 §9]

316.590 [1953 c.304 §72; repealed by 1969 c.493 §99]

316.605 [1953 c.304 §73; 1955 c.590 §1; repealed by 1957 c.632 §1 (314.405 enacted in lieu of 316.605 and 317.405)]

316.610 [1953 c.304 §74; 1953 c.552 §14; 1957 c.17 §1; repealed by 1957 c.632 §1 (314.410 enacted in lieu of 316.610 and 317.410)]

316.615 [1953 c.304 §75; 1953 c.552 §15; 1955 c.583 §1; 1957 c.23 §1; repealed by 1957 c.632 §1 (314.415 enacted in lieu of 316.615 and 317.415)]

316.620 [1953 c.304 §76; 1955 c.355 §1; repealed by 1957 c.632 §1 (314.420 enacted in lieu of 316.620, 317.370 and 317.420)]

316.625 [1953 c.304 §77; repealed by 1957 c.632 §1 (314.425 enacted in lieu of 316.625 and 317.425)]

316.630 [1953 c.304 §78; repealed by 1957 c.632 §1 (314.430 enacted in lieu of 316.630 and 317.430)]

316.635 [1953 c.304 §79; repealed by 1957 c.632 §1 (314.435 enacted in lieu of 316.635 and 317.435)]

316.640 [1953 c.304 §80; repealed by 1957 c.632 §1 (314.440 enacted in lieu of 316.640, 317.440 and 317.445)]

316.645 [1953 c.304 §81; 1961 c.504 §3; repealed by 1969 c.166 §8 and 1969 c.493 §99]

316.650 [1953 c.304 §82; 1953 c.552 §16; repealed by 1957 c.632 §1 (314.445 enacted in lieu of 316.650 and 317.455)]

316.655 [1953 c.304 §83; 1953 c.552 §17; repealed by 1957 c.632 §1 (subsections (1) and (2) of 314.450 enacted in lieu of 316.655 and 317.460)]

316.660 [1953 c.304 §84; repealed by 1957 c.632 §1 (314.455 enacted in lieu of 316.660 and 317.465)]

316.665 [1953 c.304 §85; 1953 c.552 §18; 1955 c.588 §1; repealed by 1957 c.632 §1 (314.460 enacted in lieu of 316.665 and 317.470)]

316.670 [1953 c.304 §86; repealed by 1957 c.632 §1 (314.465 enacted in lieu of 316.670 and 317.475)]

316.675 [1953 c.304 §87; 1953 c.552 §19; repealed by 1957 c.632 §1 (314.470 enacted in lieu of 316.675 and 317.480)]

MODIFICATIONS OF TAXABLE INCOME

(Generally)

316.680 Modification of taxable income. (1) There shall be subtracted from federal taxable income:

(a) The interest or dividends on obligations of the United States and its territories and possessions or of any authority, commission or instrumentality of the United States to the extent includable in gross income for federal income tax purposes but exempt from state income taxes under the laws of the United States. However, the amount subtracted under this paragraph shall be reduced by any interest on indebtedness incurred to carry the obligations or securities described in this paragraph, and by any expenses incurred in the production of interest or dividend income described in this paragraph to the extent that such expenses, including amortizable bond premiums, are deductible in determining federal taxable income.

(b) The amount of any federal income taxes accrued by the taxpayer during the taxable year as described in ORS 316.685, less the amount of any refunds of federal taxes previously accrued for which a tax benefit was received.

(c) Amounts allowable under sections 2621(a)(2) and 2622(b) of the Internal Revenue Code to the extent that the taxpayer does not elect under section 642(g) of the Internal Revenue Code to reduce federal taxable income by those amounts.

(d) Any supplemental payments made to JOBS Plus Program participants under ORS 411.892.

(e)(A) Federal pension income that is attributable to federal employment occurring before October 1, 1991. Federal pension income that is attributable to federal employment occurring before October 1, 1991, shall be determined by multiplying the total amount of federal pension income for the tax year by the ratio of the number of months of federal creditable service occurring before October 1, 1991, over the total number of months of federal creditable service.

(B) The subtraction allowed under this paragraph applies only to federal pension income received at a time when:

(i) Benefit increases provided under chapter 569, Oregon Laws 1995, are in effect; or

(ii) Public Employees Retirement System benefits received for service prior to October 1, 1991, are exempt from state income tax.

(C) As used in this paragraph:

(i) “Federal creditable service” means those periods of time for which a federal employee earned a federal pension.

(ii) “Federal pension” means any form of retirement allowance provided by the federal government, its agencies or its instrumentalities to retirees of the federal government or their beneficiaries.

(f) Any amount included in federal taxable income for the tax year that is attributable to the conversion of a regular individual retirement account into a Roth individual retirement account described in section 408A of the Internal Revenue Code, to the extent that:

(A) The amount was subject to the income tax of another state or the District of Columbia in a prior tax year; and

(B) The taxpayer was a resident of the other state or the District of Columbia for that prior tax year.

(g) Any amounts awarded to the taxpayer by the Public Safety Memorial Fund Board under ORS 243.954 to 243.974 to the extent that the taxpayer has not taken the amount as a deduction in determining the taxpayer’s federal taxable income for the tax year.

(h) If included in taxable income for federal tax purposes, the amount withdrawn during the tax year in qualified withdrawals from a savings network account for higher education established under ORS 178.300 to 178.360.

(i) Any federal deduction that the taxpayer would have been allowed for the production, processing or sale of marijuana items authorized under ORS 475C.005 to 475C.525 or 475C.770 to 475C.919 but for section 280E of the Internal Revenue Code.

(j) Any federal deduction that the taxpayer would have been allowed for the manufacturing or sale of psilocybin products or the provision of psilocybin services authorized under ORS 475A.210 to 475A.722 but for section 280E of the Internal Revenue Code.

(k) If included in taxable income for federal tax purposes, any distributions from an ABLE account that do not exceed the qualified disability expenses of the designated beneficiary as provided in ORS 178.375 and 178.380 and rules adopted by the Oregon 529 Savings Board.

(2) There shall be added to federal taxable income:

(a) Interest or dividends, exempt from federal income tax, on obligations or securities of any foreign state or of a political subdivision or authority of any foreign state. However, the amount added under this paragraph shall be reduced by any interest on indebtedness incurred to carry the obligations or securities described in this paragraph and by any expenses incurred in the production of interest or dividend income described in this paragraph.

(b) Interest or dividends on obligations of any authority, commission, instrumentality and territorial possession of the United States that by the laws of the United States are exempt from federal income tax but not from state income taxes. However, the amount added under this paragraph shall be reduced by any interest on indebtedness incurred to carry the obligations or securities described in this paragraph and by any expenses incurred in the production of interest or dividend income described in this paragraph.

(c) The amount of any federal estate taxes allocable to income in respect of a decedent not taxable by Oregon.

(d) The amount of any allowance for depletion in excess of the taxpayer’s adjusted basis in the property depleted, deducted on the taxpayer’s federal income tax return for the taxable year, pursuant to sections 613, 613A, 614, 616 and 617 of the Internal Revenue Code.

(e) For taxable years beginning on or after January 1, 1985, the dollar amount deducted under section 151 of the Internal Revenue Code for personal exemptions for the taxable year.

(f) The amount taken as a deduction on the taxpayer’s federal return for unused qualified business credits under section 196 of the Internal Revenue Code.

(g) The amount of any increased benefits paid to a taxpayer under chapter 569, Oregon Laws 1995, under the provisions of chapter 796, Oregon Laws 1991, and under section 26, chapter 815, Oregon Laws 1991, that is not includable in the taxpayer’s federal taxable income under the Internal Revenue Code.

(h) The amount of any long term care insurance premiums paid or incurred by the taxpayer during the tax year if:

(A) The amount is taken into account as a deduction on the taxpayer’s federal return for the tax year; and

(B) The taxpayer claims the credit allowed under ORS 315.610 for the tax year.

(i) Any amount taken as a deduction under section 1341 of the Internal Revenue Code in computing federal taxable income for the tax year, if the taxpayer has claimed a credit for claim of right income repayment adjustment under ORS 315.068.

(j) If the taxpayer makes a nonqualified withdrawal, as defined in ORS 178.300, from a savings network account for higher education established under ORS 178.300 to 178.360, the amount of the withdrawal that is attributable to contributions that were subtracted from federal taxable income under ORS 316.699.

(k) If a taxpayer makes a withdrawal from a savings network account for higher education established under ORS 178.300 to 178.360 to pay expenses in connection with enrollment or attendance at an elementary or secondary school, the amount of the withdrawal that is attributable to contributions that were subtracted from federal taxable income under ORS 316.699 and the amount of the withdrawal that is attributable to previously untaxed earnings and gains.

(L) If the taxpayer makes a distribution from an ABLE account that is not a qualified disability expense of the designated beneficiary as provided in ORS 178.375 and 178.380 and rules adopted by the Oregon 529 Savings Board, the amount of the distribution that is attributable to contributions that were subtracted from federal taxable income under ORS 316.699.

(3) Discount and gain or loss on retirement or disposition of obligations described under subsection (2)(a) of this section issued on or after January 1, 1985, shall be treated for purposes of this chapter in the same manner as under sections 1271 to 1283 and other pertinent sections of the Internal Revenue Code as if the obligations, although issued by a foreign state or a political subdivision of a foreign state, were not tax exempt under the Internal Revenue Code. [Formerly 316.067; 1985 c.345 §7; 1985 c.802 §11; 1987 c.293 §23; 1987 c.647 §13; 1991 c.457 §7b; 1991 c.823 §3; 1995 c.556 §8; 1995 c.561 §17; 1995 c.746 §59; 1995 c.816 §32; 1997 c.99 §18; 1999 c.90 §22; 1999 c.403 §1; 1999 c.746 §12; 1999 c.981 §16; 1999 c.1005 §3; 1999 c.1007 §3; 2001 c.13 §1; 2001 c.212 §1; 2001 c.509 §18; 2003 c.280 §3; 2007 c.843 §§1,2,2a; 2009 c.202 §§1,2; 2013 c.194 §3; 2015 c.1 §74; 2015 c.699 §§20,21; 2015 c.843 §§3,4; 2016 c.91 §§8,9; 2018 c.57 §2; 2021 c.1 §131]

316.681 Interest or dividends to benefit self-employed or individual retirement accounts. ORS 316.680 (1)(a) shall apply to the interest or dividends described under ORS 316.680 (1)(a) to the extent such interest or dividends are includable in arriving at federal taxable income as distributions from plans to benefit the self-employed or from individual retirement accounts described under sections 401 to 408A of the Internal Revenue Code. [1985 c.738 §2; 2003 c.77 §18]

316.683 State exempt-interest dividends; rules. (1) A regulated investment company, or a pool of assets managed by a fiduciary, including a financial institution, shall be qualified to pay state exempt-interest dividends, as defined in subsection (2) of this section, to its shareholders or beneficiaries.

(2) The term “state exempt-interest dividend” means any dividend or part thereof (other than a capital gain dividend, as defined in section 852(b) of the Internal Revenue Code) paid by a regulated investment company, or any pool of assets managed by a fiduciary, including but not limited to a financial institution, and designated by it as a state exempt-interest dividend in a written notice mailed to its shareholders or beneficiaries not later than 60 days after the close of its taxable year. If the aggregate amount so designated with respect to a taxable year (including state exempt-interest dividends paid after the close of the taxable year in the manner described in section 855 of the Internal Revenue Code) is greater than the excess of (a) the amount of interest and dividends received on obligations described in ORS 316.680 (1)(a), over (b) the sum of the amount of any deductible interest on indebtedness incurred to carry such obligations and the amount of any deductible expenses incurred in the production of interest and dividend income from such obligations, the portion of such distribution which shall constitute a state exempt-interest dividend shall be only that proportion of the amount so designated as the amount of such excess for such taxable year bears to the amount so designated. The exemption created by this section shall not exceed the portion of the dividend which is attributable to items of interest described in ORS 316.680 (1)(a).

(3) A state exempt-interest dividend shall be treated by a shareholder or beneficiary for all purposes as an item of interest described in ORS 316.680 (1)(a). The shareholder or beneficiary shall subtract from federal taxable income the state exempt-interest dividends received with respect to the shares of a regulated investment company or any pool of assets managed by a fiduciary, including but not limited to a financial institution. However, the amount subtracted under this section shall be reduced (but not below zero) by an amount equal to any deductible interest on indebtedness incurred to carry such shares multiplied by the state exempt-interest dividends and divided by the total dividends on such shares for the taxable year.

(4) If a shareholder of a regulated investment company, or a beneficiary of a pool of assets managed by a fiduciary, including a financial institution, receives a state exempt-interest dividend with respect to any share, and the share is held by the taxpayer for six months or less, then any loss on the sale or exchange of the share shall, to the extent of the amount the state exempt-interest dividend, be disallowed. The Department of Revenue may adopt rules that reduce the holding period requirements to less than six months.

(5) As used in this section, “financial institution” means a financial institution as defined in ORS 706.008. [1987 c.293 §12b; 1989 c.988 §2; 1993 c.18 §81; 1993 c.229 §24; 1993 c.318 §13; 1997 c.631 §457]

316.685 Federal income tax deductions; accrual method of accounting required; adjustment for federal earned income credit. (1)(a) The federal income tax deduction provided by ORS 316.680 shall be as reported on the taxpayer’s original return and shall be computed on the accrual method of accounting. Any adjustments to the federal income tax deduction now or hereafter required by Oregon law, including but not limited to the elimination of the self-employment tax, also shall be computed and eliminated according to the accrual method of accounting.

(b) For purposes of calculating the amount of the deduction for federal income taxes provided under ORS 316.680, the taxpayer shall not take into account any amount of the earned income credit provided under section 32 of the Internal Revenue Code that reduced the amount of the taxpayer’s federal income tax liability for the tax year.

(2) If refunds or additional assessments result from an adjustment whether initiated by the federal or state government or the taxpayer after the filing of the original return by the taxpayer, any additional federal taxes shall be deductible by the Oregon taxpayer under this section in the year in which the adjustment is finally determined or paid whichever is later. In the case of a refund the tax reduction shall be added to the taxpayer’s income in the year in which the refund is received.

(3) For purposes of this chapter, federal income tax does not include the following:

(a) Taxes, contributions or other payments paid by employees in pursuance of federal laws relating to Social Security, railroad retirement, unemployment compensation or old age benefits.

(b) Taxes paid pursuant to the Self-Employment Contribution Act, subtitle A, chapter 2, Internal Revenue Code. [Formerly 316.072; 1987 c.293 §24; 1997 c.692 §4]

316.687 Amount in excess of standard deduction for child, if child’s income included on parent’s federal return; limitation. There shall be added to federal taxable income of a parent who makes an election under section 1(g)(7)(B) of the Internal Revenue Code any amount in excess of the standard deduction allowed for a child under ORS 316.695 (8) but not in excess of the amount described in section 1(g)(7)(B)(i) of the Internal Revenue Code (twice the amount in effect for the taxable year under section 63(c)(5)(A) of the Internal Revenue Code). The addition under this section shall be made for each child whose income is included in the taxable income of the parent under section 1(g)(7)(B) of the Internal Revenue Code. [1989 c.625 §13; 1991 c.457 §7c; 1997 c.839 §23; 1999 c.917 §2]

316.690 Foreign income taxes. (1) Subject to subsection (2) of this section, in addition to other modifications provided in this chapter, and if a taxpayer elects to take foreign income taxes imposed for the taxable year by a foreign country as a credit on the federal income tax return or does not itemize personal deductions on the federal income tax return, there shall be subtracted from federal taxable income in the computation of state taxable income the amount of foreign income taxes imposed for the taxable year by a foreign country.

(2) The deduction for foreign country income taxes provided by this section shall be limited as follows:

(a) Except as provided in paragraph (b) of this subsection, the sum of foreign country income taxes deducted in computing state taxable income and the modification for federal income taxes authorized by ORS 316.680 (1)(b) as limited by ORS 316.695 (3) shall not exceed $3,000.

(b) In the case of spouses in a marriage filing separate tax returns, the sum described in paragraph (a) of this subsection shall be limited to $1,500. [Formerly 316.071; 1985 c.345 §8; 1987 c.293 §24a; 2015 c.629 §45]

316.693 Subtraction for medical expenses of elderly individuals. (1)(a) In addition to the other modifications to federal taxable income contained in this chapter, there shall be subtracted from federal taxable income the amount paid for medical care of an individual and not compensated for by insurance or otherwise, as described in section 213 of the Internal Revenue Code, if the individual meets the age requirement for the tax year under subsection (2) of this section. The amount subtracted under this section may not exceed:

(A) $3,600 for a joint return if both spouses meet the age requirement for the tax year under subsection (2) of this section, with no more than $1,800 attributable to the medical care of either spouse;

(B) $1,800 for a joint return if only one spouse meets the age requirement for the tax year under subsection (2) of this section, with no more than $1,800 attributable to the medical care of that spouse; or

(C) $1,800 for each individual filing a return who meets the age requirement for the tax year under subsection (2) of this section, with no more than $1,800 attributable to the medical care of that individual.

(b) The subtraction under this section may not include amounts that have previously been deducted in the calculation of Oregon taxable income.

(2) The subtraction under this section is available only if the individual has attained the following age before the close of the tax year:

(a) For tax years beginning on or after January 1, 2013, and before January 1, 2014, an individual must attain 62 years of age before the close of the tax year.

(b) For tax years beginning on or after January 1, 2014, and before January 1, 2016, an individual must attain 63 years of age before the close of the tax year.

(c) For tax years beginning on or after January 1, 2016, and before January 1, 2018, an individual must attain 64 years of age before the close of the tax year.

(d) For tax years beginning on or after January 1, 2018, and before January 1, 2020, an individual must attain 65 years of age before the close of the tax year.

(e) For tax years beginning on or after January 1, 2020, an individual must attain 66 years of age before the close of the tax year.

(3) Notwithstanding the amount calculated under subsection (1) of this section, the maximum amount allowed for a subtraction under this section may not exceed:

(a) $1,400 per individual, if the federal adjusted gross income of the taxpayer for the tax year is $50,000 or more and less than $100,000 for a taxpayer who files a return jointly, as a head of household or as a surviving spouse, or for all other taxpayers, $25,000 or more and less than $50,000.

(b) $1,000 per individual, if the federal adjusted gross income of the taxpayer for the tax year is $100,000 or more but does not exceed $200,000 for a taxpayer who files a return jointly, as a head of household or as a surviving spouse, or for all other taxpayers, $50,000 or more but does not exceed $100,000.

(4) A subtraction may not be claimed under this section if the federal adjusted gross income of the taxpayer for the tax year exceeds:

(a) $200,000 for joint return filers, a surviving spouse or a head of household; or

(b) $100,000 for an individual who is not a married individual and is not a surviving spouse, or is a married individual who files a separate return. [2013 s.s. c.5 §4; 2014 c.114 §1]

316.695 Additional modifications of taxable income; rules. (1) In addition to the modifications to federal taxable income contained in this chapter, there shall be added to or subtracted from federal taxable income:

(a) If, in computing federal income tax for a tax year, the taxpayer deducted itemized deductions, as defined in section 63(d) of the Internal Revenue Code, the taxpayer shall add the amount of itemized deductions deducted (the itemized deductions less an amount, if any, by which the itemized deductions are reduced under section 68 of the Internal Revenue Code).

(b) If, in computing federal income tax for a tax year, the taxpayer deducted the standard deduction, as defined in section 63(c) of the Internal Revenue Code, the taxpayer shall add the amount of the standard deduction deducted.

(c)(A) From federal taxable income there shall be subtracted the larger of (i) the taxpayer’s itemized deductions or (ii) a standard deduction. Except as provided in subsection (8) of this section, for purposes of this subparagraph, “standard deduction” means the sum of the basic standard deduction and the additional standard deduction.

(B) For purposes of subparagraph (A) of this paragraph, the basic standard deduction is:

(i) $3,280, in the case of joint return filers or a surviving spouse;

(ii) $1,640, in the case of an individual who is not a married individual and is not a surviving spouse;

(iii) $1,640, in the case of a married individual who files a separate return; or

(iv) $2,640, in the case of a head of household.

(C)(i) For purposes of subparagraph (A) of this paragraph for tax years beginning on or after January 1, 2003, the Department of Revenue shall annually recompute the basic standard deduction for each category of return filer listed under subparagraph (B) of this paragraph. The basic standard deduction shall be computed by dividing the monthly averaged U.S. City Average Consumer Price Index for the 12 consecutive months ending August 31 of the prior calendar year by the average U.S. City Average Consumer Price Index for the second quarter of 2002, then multiplying that quotient by the amount listed under subparagraph (B) of this paragraph for each category of return filer.

(ii) If any change in the maximum household income determined under this subparagraph is not a multiple of $5, the increase shall be rounded to the next lower multiple of $5.

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

(D) For purposes of subparagraph (A) of this paragraph, the additional standard deduction is the sum of each additional amount to which the taxpayer is entitled under subsection (7) of this section.

(E) As used in subparagraph (B) of this paragraph, “surviving spouse” and “head of household” have the meanings given those terms in section 2 of the Internal Revenue Code.

(F) In the case of the following, the standard deduction referred to in subparagraph (A) of this paragraph shall be zero:

(i) One of the spouses in a marriage filing a separate return where the other spouse has claimed itemized deductions under subparagraph (A) of this paragraph;

(ii) A nonresident noncitizen;

(iii) An individual making a return for a period of less than 12 months on account of a change in the individual’s annual accounting period;

(iv) An estate or trust;

(v) A common trust fund; or

(vi) A partnership.

(d) For the purposes of paragraph (c)(A) of this subsection, the taxpayer’s itemized deductions are the amount of the taxpayer’s itemized deductions as defined in section 63(d) of the Internal Revenue Code (reduced, if applicable, as described under section 68 of the Internal Revenue Code) minus the deduction for Oregon income tax (reduced, if applicable, by the proportion that the reduction in federal itemized deductions resulting from section 68 of the Internal Revenue Code bears to the amount of federal itemized deductions as defined for purposes of section 68 of the Internal Revenue Code).

(2)(a) There shall be subtracted from federal taxable income any portion of the distribution of a pension, profit-sharing, stock bonus or other retirement plan, representing that portion of contributions which were taxed by the State of Oregon but not taxed by the federal government under laws in effect for tax years beginning prior to January 1, 1969, or for any subsequent year in which the amount that was contributed to the plan under the Internal Revenue Code was greater than the amount allowed under this chapter.

(b) Interest or other earnings on any excess contributions of a pension, profit-sharing, stock bonus or other retirement plan not permitted to be deducted under paragraph (a) of this subsection may not be added to federal taxable income in the year earned by the plan and may not be subtracted from federal taxable income in the year received by the taxpayer.

(3)(a) Except as provided in subsection (4) of this section, there shall be added to federal taxable income the amount of any federal income taxes in excess of the amount provided in paragraphs (b) to (d) of this subsection, accrued by the taxpayer during the tax year as described in ORS 316.685, less the amount of any refund of federal taxes previously accrued for which a tax benefit was received.

(b) The limits applicable to this subsection are:

(A) $5,500, if the federal adjusted gross income of the taxpayer for the tax year is less than $125,000, or, if reported on a joint return, less than $250,000.

(B) $4,400, if the federal adjusted gross income of the taxpayer for the tax year is $125,000 or more and less than $130,000, or, if reported on a joint return, $250,000 or more and less than $260,000.

(C) $3,300, if the federal adjusted gross income of the taxpayer for the tax year is $130,000 or more and less than $135,000, or, if reported on a joint return, $260,000 or more and less than $270,000.

(D) $2,200, if the federal adjusted gross income of the taxpayer for the tax year is $135,000 or more and less than $140,000, or, if reported on a joint return, $270,000 or more and less than $280,000.

(E) $1,100, if the federal adjusted gross income of the taxpayer for the tax year is $140,000 or more and less than $145,000, or, if reported on a joint return, $280,000 or more and less than $290,000.

(c) If the federal adjusted gross income of the taxpayer is $145,000 or more for the tax year, or, if reported on a joint return, $290,000 or more, the limit is zero and the taxpayer is not allowed a subtraction for federal income taxes under ORS 316.680 (1) for the tax year.

(d) In the case of spouses in a marriage filing separate tax returns, the amount added shall be in the amount of any federal income taxes in excess of 50 percent of the amount provided for individual taxpayers under paragraphs (a) to (c) of this subsection, less the amount of any refund of federal taxes previously accrued for which a tax benefit was received.

(e) For purposes of this subsection, the limits applicable to a joint return shall apply to a head of household or a surviving spouse, as defined in section 2(a) and (b) of the Internal Revenue Code.

(f)(A) For a calendar year beginning on or after January 1, 2008, the Department of Revenue shall make a cost-of-living adjustment to the federal income tax threshold amounts described in paragraphs (b) and (d) of this subsection.

(B) The cost-of-living adjustment for a calendar year is the percentage by which the monthly averaged U.S. City Average Consumer Price Index for the 12 consecutive months ending August 31 of the prior calendar year exceeds the monthly averaged index for the period beginning September 1, 2005, and ending August 31, 2006.

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

(D) If any adjustment determined under subparagraph (B) of this paragraph is not a multiple of $50, the adjustment shall be rounded to the next lower multiple of $50.

(E) The adjustment shall apply to all tax years beginning in the calendar year for which the adjustment is made.

(4)(a) In addition to the adjustments required by ORS 316.130, a full-year nonresident individual shall add to taxable income a proportion of any accrued federal income taxes as computed under ORS 316.685 in excess of the amount provided in subsection (3) of this section in the proportion provided in ORS 316.117.

(b) In the case of spouses in a marriage filing separate tax returns, the amount added under this subsection shall be computed in a manner consistent with the computation of the amount to be added in the case of spouses in a marriage filing separate returns under subsection (3) of this section. The method of computation shall be determined by the Department of Revenue by rule.

(5) Subsections (3)(d) and (4)(b) of this section shall not apply to married individuals living apart as defined in section 7703(b) of the Internal Revenue Code.

(6)(a) For tax years beginning on or after January 1, 1981, and prior to January 1, 1983, income or loss taken into account in determining federal taxable income by a shareholder of an S corporation pursuant to sections 1373 to 1375 of the Internal Revenue Code shall be adjusted for purposes of determining Oregon taxable income, to the extent that as income or loss of the S corporation, they were required to be adjusted under the provisions of ORS chapter 317.

(b) For tax years beginning on or after January 1, 1983, items of income, loss or deduction taken into account in determining federal taxable income by a shareholder of an S corporation pursuant to sections 1366 to 1368 of the Internal Revenue Code shall be adjusted for purposes of determining Oregon taxable income, to the extent that as items of income, loss or deduction of the shareholder the items are required to be adjusted under the provisions of this chapter.

(c) The tax years referred to in paragraphs (a) and (b) of this subsection are those of the S corporation.

(d) As used in paragraph (a) of this subsection, an S corporation refers to an electing small business corporation.

(7)(a) The taxpayer shall be entitled to an additional amount, as referred to in subsection (1)(c)(A) and (D) of this section, of $1,000:

(A) For the taxpayer if the taxpayer has attained age 65 before the close of the taxpayer’s tax year; and

(B) For the spouse of the taxpayer if the spouse has attained age 65 before the close of the tax year and an additional exemption is allowable to the taxpayer for such spouse for federal income tax purposes under section 151(b) of the Internal Revenue Code.

(b) The taxpayer shall be entitled to an additional amount, as referred to in subsection (1)(c)(A) and (D) of this section, of $1,000:

(A) For the taxpayer if the taxpayer is blind at the close of the tax year; and

(B) For the spouse of the taxpayer if the spouse is blind as of the close of the tax year and an additional exemption is allowable to the taxpayer for such spouse for federal income tax purposes under section 151(b) of the Internal Revenue Code. For purposes of this subparagraph, if the spouse dies during the tax year, the determination of whether such spouse is blind shall be made immediately prior to death.

(c) In the case of an individual who is not married and is not a surviving spouse, paragraphs (a) and (b) of this subsection shall be applied by substituting “$1,200” for “$1,000.”

(d) For purposes of this subsection, an individual is blind only if the individual’s central visual acuity does not exceed 20/200 in the better eye with correcting lenses, or if the individual’s visual acuity is greater than 20/200 but is accompanied by a limitation in the fields of vision such that the widest diameter of the visual field subtends an angle no greater than 20 degrees.

(8) In the case of an individual with respect to whom a deduction under section 151 of the Internal Revenue Code is allowable for federal income tax purposes to another taxpayer for a tax year beginning in the calendar year in which the individual’s tax year begins, the basic standard deduction (referred to in subsection (1)(c)(B) of this section) applicable to such individual for such individual’s tax year shall equal the lesser of:

(a) The amount allowed to the individual under section 63(c)(5) of the Internal Revenue Code for federal income tax purposes for the tax year for which the deduction is being claimed; or

(b) The amount determined under subsection (1)(c)(B) of this section. [Formerly 316.068; 1985 c.141 §6; 1985 c.345 §9; 1985 c.802 §12; 1987 c.293 §25; 1989 c.625 §14; 1989 c.626 §8; 1991 c.457 §7d; 1991 c.823 §12; 1995 c.556 §9; 1997 c.99 §2; 1999 c.917 §1; 2001 c.221 §1; 2001 c.660 §14; 2002 s.s.3 c.8 §1; 2007 c.614 §13; 2009 c.746 §3; 2013 c.750 §4; 2013 s.s. c.5 §5; 2015 c.629 §46; 2022 c.97 §10]

Note: 316.695 (4) and (5) were enacted into law but were not added to or made a part of ORS chapter 316 or any series therein by law. See Preface to Oregon Revised Statutes for further explanation.

316.697 Fiduciary adjustment. There shall be added to or subtracted from federal taxable income, as the case may be, the taxpayer’s share of the fiduciary adjustment determined under ORS 316.287. [Formerly 316.077]

316.698 Subtraction for qualifying film production labor rebates. If the amount received as a labor rebate under section 1, chapter 559, Oregon Laws 2005, is included in federal taxable income for federal tax purposes, then the amount shall be subtracted from federal taxable income for purposes of determining Oregon taxable income under this chapter. [2005 c.559 §8]

316.699 Subtraction for contributions to savings network account for higher education or ABLE account; limitations; carryforward. (1) There shall be subtracted from federal taxable income the amount contributed to:

(a) A savings network account for higher education established under ORS 178.300 to 178.360; or

(b) An ABLE account established under ORS 178.380 and rules adopted by the Oregon 529 Savings Board, when the contribution is made before the designated beneficiary of the account attains 21 years of age.

(2) Notwithstanding subsection (1) of this section, a subtraction under this section may not exceed the lesser of:

(a) $4,000 for the tax year if the taxpayer files a joint return, or $2,000 for the tax year if the taxpayer files a return other than a joint return; and

(b) If an amount is carried forward to a succeeding tax year under subsection (4) of this section, the balance in the savings network account for higher education or ABLE account at the close of the tax year for which the subtraction is being made.

(3)(a) The Department of Revenue shall annually adjust the maximum subtraction allowable under this section according to the cost-of-living adjustment for the calendar year. The department shall make this adjustment by multiplying the amount in subsection (2) of this section by the percentage (if any) by which the monthly averaged U.S. City Average Consumer Price Index for the 12 consecutive months ending August 31 of the prior calendar year exceeds the monthly averaged U.S. City Average Consumer Price Index for the 12 consecutive months ending August 31, 2007.

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

(4) Any amounts contributed to a savings network account for higher education or an ABLE account that are not subtracted from federal taxable income because of the monetary limitations imposed by subsection (2) of this section may be carried forward for four succeeding tax years and subtracted from federal taxable income in any of those succeeding tax years in an amount that does not exceed the monetary limitations imposed by subsection (2) of this section.

(5) The amount contributed to a savings network account for higher education or an ABLE account may be subtracted from a preceding tax year if the contribution is made before the taxpayer files a return or before the 15th day of the fourth month following the closing of the taxpayer’s tax year, whichever is earlier.

(6) A subtraction is not allowed under this section for any amount that has been transferred into a savings network account for higher education from an individual development account, through a rollover, as provided in ORS 458.685 (3)(a)(A). [2003 c.280 §2; 2007 c.843 §11; 2009 c.33 §22; 2015 c.701 §9a; 2015 c.843 §5; 2021 c.525 §15]

Note: Section 4, chapter 579, Oregon Laws 2019, provides:

Sec. 4. Except as provided in ORS 316.699 (4), a taxpayer:

(1) May use a subtraction under ORS 316.699 only for contributions made in tax years beginning before January 1, 2020; and

(2) May carry forward and use a subtraction under ORS 316.699 (4) only in tax years beginning before January 1, 2025. [2019 c.579 §4]

316.701 [1983 c.162 §61; repealed by 1987 c.293 §70]

316.705 [1953 c.304 §88; repealed by 1957 c.632 §1 (314.805 enacted in lieu of 316.705 and 317.505)]

316.706 [1957 c.586 §6; 1959 c.76 §1; 1961 c.506 §2; 1961 c.623 §1; repealed by 1969 c.493 §99]

316.707 Computation of depreciation of property under federal law; applicability. (1) To the extent that the amount allowed as a deduction under section 168 of the Internal Revenue Code (Accelerated Cost Recovery System) exceeds, or is less than, the amount that would be allowed as a deduction for depreciation for the property under the federal Internal Revenue Code as amended and in effect on December 31, 1980, the difference shall be added to, or subtracted from federal taxable income, whichever is applicable.

(2) The modifications required by subsection (1) of this section apply only to the differences in the computation of depreciation (reasonable allowance for exhaustion, wear, tear and obsolescence) under the Accelerated Cost Recovery System and the other methods of depreciation. Nothing in this section shall be construed to govern the eligibility of property for depreciation, or other provisions of the Internal Revenue Code which do not directly govern the computation of the deduction amount for recovery property.

(3) There shall be added to federal taxable income any amount deducted under section 179 of the Internal Revenue Code (election to expense certain depreciable business assets). However, any asset with respect to which this section applies may be depreciated as otherwise provided under this chapter.

(4) Income included in federal taxable income by a shareholder of an S corporation pursuant to sections 1366 to 1368 of the Internal Revenue Code shall be adjusted for purposes of determining Oregon taxable income as required by the provisions of this section.

(5) This section shall not apply to property placed in service in taxable years beginning on or after January 1, 1985. [1983 c.162 §67; 1985 c.802 §13]

316.710 [1953 c.304 §89; repealed by 1957 c.632 §1 (subsections (2), (3) and (4) of 306.040 enacted in lieu of 316.710)]

316.711 [1957 c.586 §7; 1959 c.593 §7 (referred and rejected); 1961 c.623 §2; repealed by 1969 c.493 §99]

316.714 [1957 c.586 §7; 1959 c.593 §8 (referred and rejected); 1963 c.627 §17 (referred and rejected); repealed by 1969 c.493 §99]

316.715 [1953 c.304 §90; repealed by 1957 c.632 §1 (314.810 enacted in lieu of 316.715)]

316.716 Differences in basis on federal and state return; application of federal credit. (1) Upon the taxable sale, exchange or disposition of any asset in a tax year beginning on or after January 1, 1983, federal taxable income shall be increased or decreased by an amount which will reflect one or more of the following:

(a) The difference in basis which results from the difference in depreciation or cost recovery, or expense claimed under section 179 of the Internal Revenue Code, allowed or allowable on the Oregon return and that allowed or allowable on the federal return for that asset;

(b) The difference in basis which results when a taxpayer has taken a federal credit, which requires as a condition of the use of the federal credit the reduction of the basis of an asset, and the federal credit is not allowable for Oregon tax purposes;

(c) The difference in basis as a result of any deferral of gain which has been granted under federal tax law but not under Oregon tax law or granted under Oregon law but not granted under federal law;

(d) The difference in basis under federal and Oregon tax law at the time the asset was acquired; or

(e) Any other differences in the basis of the asset which are due to differences between federal and Oregon tax law.

(2) There shall be added to or subtracted from federal taxable income any amount necessary to carry out the purposes of subsection (1) of this section.

(3) If a taxpayer has taken a federal credit, which requires as a condition of the use of the federal credit the reduction of a corresponding deduction, and the federal credit is not allowable for Oregon purposes, the taxpayer shall be allowed the deduction for Oregon tax purposes. [1983 c.162 §69; 1985 c.802 §14]

316.718 [1989 c.625 §6; repealed by 1991 c.457 §24]

316.720 [1953 c.304 §91; repealed by 1957 c.632 §1 (314.815 enacted in lieu of 316.720 and 317.505)]

316.721 [1957 c.586 §12; repealed by 1969 c.493 §99]

316.723 [1983 c.162 §70; 1985 c.802 §15; 1987 c.293 §26; 1991 c.457 §7e; repealed by 1995 c.556 §43]

316.725 [1953 c.304 §92; repealed by 1957 c.632 §1 (314.820 enacted in lieu of 316.725 and 317.520)]

316.729 [1983 c.162 §73; 1995 c.556 §10; repealed by 2003 c.46 §43 and 2003 c.77 §26]

316.730 [1953 c.304 §93; repealed by 1957 c.632 §1 (314.825 enacted in lieu of 316.730 and 317.525)]

316.731 [1957 c.586 §13; repealed by 1969 c.493 §99]

316.735 [1953 c.304 §94; repealed by 1957 c.632 §1 (314.830 enacted in lieu of 316.735 and 317.530)]

316.737 Amount specially taxed under federal law to be included in computation of state taxable income. If a taxpayer has taken a deduction to arrive at federal taxable income for the purpose of having that income taxed in a manner different from the taxation of federal taxable income, the amount which was deducted and specially taxed shall be added to federal taxable income in the computation of state taxable income. However, if any portion of the amount added was treated as capital gain in arriving at federal taxable income, that portion shall be treated as capital gain in the computation of state taxable income. [1983 c.162 §76; 1987 c.293 §27]

316.738 Modification of taxable income when deferred gain is recognized as result of out-of-state disposition of property. (1) If gain is deferred upon the voluntary or involuntary disposition of property in an exchange that qualifies for deferral under section 1031 or 1033 of the Internal Revenue Code, and the property acquired in the exchange has a situs outside of this state, upon the sale or other disposition of the acquired property in a transaction in which gain or loss is recognized for federal tax purposes but is not taken into account in computing federal taxable income for Oregon tax purposes, there shall be added to federal taxable income the difference between:

(a) The adjusted basis of the acquired property on the date the exchange under section 1031 or 1033 of the Internal Revenue Code was completed; and

(b) The lesser of:

(A) The fair market value of the acquired property on the date the exchange under section 1031 or 1033 of the Internal Revenue Code was completed; or

(B) The fair market value of the acquired property on the date gain or loss from the sale or other disposition of the acquired property is recognized for federal tax purposes.

(2) If the adjusted basis described in subsection (1)(a) of this section is larger than either value described in subsection (1)(b) of this section, the difference computed under subsection (1) of this section shall be subtracted from federal taxable income instead of being added to federal taxable income.

(3) The Department of Revenue may require taxpayers owning property acquired in an exchange under section 1031 or 1033 of the Internal Revenue Code that has a situs outside of this state to file an annual report on the acquired property, and may adopt rules to implement reporting requirements under this section. [2001 c.509 §15]

316.739 Deferral of deduction for certain amounts deductible under federal law. (1) There shall be added to federal taxable income for Oregon tax purposes the difference between the amount allowable as a deduction under section 108 of the Internal Revenue Code as applicable to the tax year of the taxpayer and the amount allowable as a deduction under section 108 of the Internal Revenue Code as amended and in effect on December 31, 2008, as applicable to the tax year of the taxpayer.

(2) There shall be added to federal taxable income for Oregon tax purposes the difference between the amount allowable as a deduction under section 168(k) of the Internal Revenue Code as applicable to the tax year of the taxpayer and the amount allowable as a deduction under section 168(k) of the Internal Revenue Code as amended and in effect on December 31, 2008, as applicable to the tax year of the taxpayer.

(3) There shall be added to federal taxable income for Oregon tax purposes the difference between the amount allowable as a deduction under section 179 of the Internal Revenue Code as applicable to the tax year of the taxpayer and the amount allowable as a deduction under section 179 of the Internal Revenue Code as amended and in effect on December 31, 2008, as applicable to the tax year of the taxpayer.

(4) Amounts added to federal taxable income for Oregon tax purposes under subsections (1) to (3) of this section may thereafter be subtracted from federal taxable income for Oregon tax purposes in the tax year for which the amounts would have been allowed as a deduction on the taxpayer’s federal income tax return under the Internal Revenue Code as amended and in effect on December 31, 2008, as applicable to the tax year of the taxpayer. [2009 c.909 §37; 2011 c.7 §29]

Note: Section 31, chapter 7, Oregon Laws 2011, provides:

Sec. 31. ORS 316.739 and 317.301 apply to tax years beginning on or after January 1, 2009, and before January 1, 2011. [2011 c.7 §31]

316.740 [1953 c.304 §95; 1957 c.75 §1; repealed by 1957 c.632 §1 (314.835 enacted in lieu of 316.740 and 317.535)]

316.741 [1957 c.586 §8; repealed by 1969 c.493 §99]

316.742 [1991 c.457 §7g; 1995 c.556 §11; repealed by 1997 c.839 §69]

316.743 [1997 c.824 §2; repealed by 2001 c.660 §55]

316.744 Cash payments for energy conservation. Any amount received as a cash payment for energy conservation measures under ORS 456.594 to 456.599 and 469.631 to 469.687 is exempt from the tax imposed under this chapter. [Formerly 316.069; 1985 c.802 §16]

316.745 [1953 c.304 §96; repealed by 1957 c.632 §1 (314.840 enacted in lieu of 316.745 and 317.540)]

316.746 [1991 c.641 §4; repealed by 1999 c.880 §2]

316.747 Contribution to charitable organization subject to disqualification order. (1) Except as provided in subsection (2) of this section, in addition to any other modification to federal taxable income under this chapter there shall be added to federal taxable income the amount of any charitable contribution that:

(a) Is allowed as a deduction for federal tax purposes for the tax year under section 170 of the Internal Revenue Code;

(b) Is attributable to a contribution to a charitable organization that is the subject of a disqualification order issued under ORS 128.760 to 128.769; and

(c) Was made to the charitable organization more than 30 days after the date of Internet publication of information relating to the disqualification order under ORS 128.766.

(2) Charitable contributions described in subsection (1) of this section shall not be added to federal taxable income if the taxpayer provides to the Department of Revenue a written document that the taxpayer received from the organization to which the contribution was made that:

(a) Acknowledges receipt of the contribution by the organization; and

(b) Does not include the disclosure required by ORS 128.763. [2013 c.260 §7]

316.749 Dividend from domestic international sales corporation. (1) In addition to the other modifications to federal taxable income contained in this chapter, there shall be subtracted from federal taxable income the amount of any dividend received by the taxpayer on or after January 1, 2013, from a domestic international sales corporation formed on or before January 1, 2014, and subject to the tax imposed under ORS 317.283 (2)(a).

(2) As used in this section, “domestic international sales corporation” means a domestic international sales corporation as defined in section 992 of the Internal Revenue Code. [2013 s.s. c.5 §6c; 2014 c.114 §3]

316.750 [1953 c.304 §97; repealed by 1957 c.632 §1 (314.845 enacted in lieu of 316.750 and 317.545)]

316.751 [Formerly 316.580; repealed by 1969 c.493 §99]

(Additional Personal Exemption Credits)

316.752 Definitions for ORS 316.752 to 316.771. For purposes of ORS 316.752 to 316.771:

(1) A person has a “severe disability” if the person:

(a) Has lost the use of one or more lower extremities;

(b) Has lost the use of both hands;

(c) Is disabled as that term is defined in section 72(m)(7) of the Internal Revenue Code, to a degree that the person is unable to engage in any substantial gainful activity; or

(d) Has a physical or mental condition that limits the abilities of the person to earn a living, maintain a household or provide personal transportation for the person without employing orthopedic or medical equipment or outside help.

(2) “Orthopedic or medical equipment” includes, but is not limited to, wheelchairs, braces, prostheses or special crutches.

(3) “Outside help” includes, but is not limited to, unrelated individuals whom the taxpayer with a severe disability employs to keep house, maintain the house or yard, or to transport the taxpayer. [Formerly 316.135; 1987 c.158 §50; 1989 c.224 §51; 2007 c.70 §85; 2009 c.909 §40]

316.755 [1953 c.304 §98; repealed by 1957 c.632 §1 (314.850 enacted in lieu of 316.755)]

316.758 Additional personal exemption credit for persons with severe disabilities; income limitation. (1) In addition to the personal exemption credit allowed by this chapter for state personal income tax purposes, there shall be allowed an additional personal exemption credit for the taxpayer if the taxpayer:

(a) Has a severe disability at the close of the taxable year; and

(b) Has federal adjusted gross income that does not exceed $100,000 for the tax year.

(2) The amount of the credit shall be equal to the amount allowed as the personal exemption credit for the taxpayer for state personal income tax purposes for the tax year. [Formerly 316.136; 1985 c.345 §10; 1987 c.293 §28; 2007 c.70 §86; 2014 c.114 §9; 2015 c.701 §15]

Note: Section 42, chapter 913, Oregon Laws 2009, provides:

Sec. 42. A credit may not be claimed under ORS 316.758 for tax years beginning on or after January 1, 2028. [2009 c.913 §42; 2015 c.701 §14; 2021 c.525 §2]

316.760 [1953 c.304 §99; repealed by 1957 c.632 §1 (314.855 enacted in lieu of 316.760 and 317.550)]

316.761 [1957 c.586 §9; 1963 c.627 §18 (referred and rejected); 1963 s.s. c.3 §1; repealed by 1969 c.493 §99]

316.765 Additional personal exemption credit for spouse of person with severe disability; conditions. (1) An additional personal exemption credit in the same amount as allowed under ORS 316.758 for a taxpayer with a severe disability shall be allowed for the spouse of the taxpayer if a separate return is made by the taxpayer, and if the spouse:

(a) Has a severe disability;

(b) Has no gross income for the calendar year in which the taxable year of the taxpayer begins; and

(c) Is not the dependent of another taxpayer.

(2) In the case of a joint return, each spouse who has a severe disability shall be allowed the additional credit in the amount provided under ORS 316.758 if the spouse otherwise qualifies under this section.

(3) For purposes of this section, the determination of whether the spouse has a severe disability shall be made as of the close of the taxable year of the taxpayer except that if the spouse dies during such taxable year such determination shall be made as of the time of the death of the spouse. [Formerly 316.137; 1985 c.345 §11; 1987 c.293 §29; 2007 c.70 §87]

Note: Section 43, chapter 913, Oregon Laws 2009, provides:

Sec. 43. A credit may not be claimed under ORS 316.765 for tax years beginning on or after January 1, 2016. [2009 c.913 §43]

316.770 [Formerly 316.585; 1963 c.83 §1; repealed by 1969 c.493 §99]

316.771 Proof of status for exemption credit. Each person qualifying for the additional personal exemption credit allowed in ORS 316.758 and 316.765 may claim the credit on the personal income tax return. However, the claim shall be substantiated by a letter from a licensed physician describing the nature and extent of the physical disability. The requirement for substantiation may be waived partially, conditionally or absolutely, as provided under ORS 315.063. [Formerly 316.138; 1985 c.345 §12; 1987 c.293 §30; 1995 c.54 §12; 2017 c.409 §7]

316.775 [1957 c.586 §10; 1959 c.234 §3; repealed by 1969 c.493 §99]

(Exemptions)

316.777 Income derived from sources within federally recognized Indian country exempt from tax. (1) Any income derived from sources within the boundaries of federally recognized Indian country in Oregon by any enrolled member of a federally recognized American Indian tribe residing in federally recognized Indian country in Oregon at the time the income is earned is exempt from tax under this chapter.

(2) An extract from the tribal rolls or other documentary proof of the taxpayer’s enrolled status and other additional proofs as may be required by the Department of Revenue, shall be attached to or accompany any return for any year for which exemption under subsection (1) of this section is claimed. The requirement of proof may be waived partially, conditionally or absolutely, as provided under ORS 315.063. [Formerly 316.049; 1985 c.317 §1; 1995 c.54 §17]

316.778 Small city business development exemption; rules. (1) For each tax year in which a business firm receives an annual certification under ORS 285C.506, the income of the taxpayer apportionable to the certified facility of the business firm shall be exempt from tax under this chapter.

(2) The income of a resident taxpayer that is exempt under this section shall be determined by:

(a) Multiplying the federal taxable income of the taxpayer by the ratio of the taxpayer’s federal adjusted gross income derived from the business firm over the taxpayer’s federal adjusted gross income; and

(b) Multiplying the amount determined under paragraph (a) of this subsection by the ratio of the business firm’s income derived from the firm’s activities at the certified facility over the business firm’s income from all business activities.

(3) The income of a nonresident or part-year resident taxpayer that is exempt under this section shall be determined by:

(a) Multiplying the Oregon-sourced federal taxable income of the taxpayer by the ratio of the taxpayer’s federal adjusted gross income derived from the business firm over the taxpayer’s federal adjusted gross income; and

(b) Multiplying the amount determined under paragraph (a) of this subsection by the ratio of the business firm’s income derived from the firm’s activities at the certified facility over the business firm’s income from all business activities.

(4) The Department of Revenue shall by rule prescribe a method by which a business firm determines the extent to which the firm’s income is derived from the firm’s activities at the certified facility.

(5)(a) A partnership or S corporation shall report the information necessary to compute exempt income under this section to the firm’s owners within 30 days following the issuance of the annual certification to the partnership or S corporation under ORS 285C.506.

(b) The department may permit extensions of time for reporting the information required under this subsection.

(6) As used in this section:

(a) “Business firm” has the meaning given that term in ORS 285C.500.

(b) “Certified facility” means a facility, as defined in ORS 285C.500, for which an annual certification under ORS 285C.506 has been issued. [2001 c.944 §6]

316.780 [1957 c.586 §11; repealed by 1969 c.493 §99]

316.783 Amounts received for condemnation of Indian tribal lands. Amounts received as condemnation awards as a result of condemnation by the federal government of Indian tribal lands are exempt from the tax imposed by this chapter. [Formerly 316.050]

316.785 Income derived from exercise of Indian fishing rights. Income derived from the exercise of rights of any Indian tribe to fish secured by treaty, Executive order or Act of Congress is exempt from the tax imposed by this chapter if section 7873 of the Internal Revenue Code does not permit a like federal tax to be imposed on such income. [1989 c.625 §5]

316.787 Payments to Japanese and Aleuts under Civil Liberties Act of 1988. Amounts paid to an eligible individual (persons of Japanese ancestry and Aleut civilian residents of the Pribilof Islands and the Aleutian Islands) under section 1989b-4, Title I, or 1989c-5, Title II, of the Civil Liberties Act of 1988 (P.L. 100-383) shall be treated for purposes of this chapter as damages for human suffering and shall be exempt from the taxes imposed under this chapter. [1989 c.625 §4]

316.788 [Formerly 316.051; repealed by 1987 c.293 §70]

316.789 [1991 c.177 §2; repealed by 2013 c.194 §4]

316.790 [1953 c.304 §116; 1957 c.528 §3; repealed by 1969 c.493 §99]

316.791 [2005 c.519 §12; 2007 c.605 §1; repealed by 2013 c.194 §4]

316.792 Military pay. (1) As used in this section:

(a) “Armed Forces of the United States” means all regular and reserve components of the United States Army, Navy, Air Force, Marine Corps, Coast Guard and Space Force and other uniformed services under the orders of the President of the United States.

(b) “Military pay” means pay for active duty, inactive duty, training and reserve component duty, including state active duty, and any other compensation, other than retirement pay or pension, paid by the Armed Forces of the United States to a member of the Armed Forces of the United States.

(c) “Reserve component duty” includes duty performed as a member of the reserve components that is not federal active duty.

(d) “Reserve components” includes all National Guard and reserve departments of the Armed Forces of the United States.

(e) “Uniformed services” includes the commissioned corps of the National Oceanic and Atmospheric Administration and the United States Public Health Service.

(2) There shall be subtracted from federal taxable income military pay received for:

(a) Service performed outside this state in the year of initial draft or enlistment or in the year of discharge.

(b) Service performed outside this state during any month beginning on or after August 1, 1990, and before the date designated by the President of the United States as the date of termination of combatant activities in the Persian Gulf Desert Shield area.

(c) Service by a member of the reserve components, if:

(A) The military pay is for service performed when the taxpayer is away from the home of the taxpayer overnight;

(B) The taxpayer is required to be away from home overnight in order to perform the service; and

(C) The service is of a duration of at least 21 consecutive days, although the consecutive days need not be in the same tax year.

(d) Service performed by a member of the Oregon National Guard while in active service of the state or on state active duty, as defined in ORS 396.005.

(e) Service not otherwise qualified for a subtraction under paragraphs (a) to (d) of this subsection, not to exceed $6,000 per year.

(3) The total amount subtracted under this section may not exceed the taxpayer’s total military pay included in federal taxable income for the tax year. [2013 c.194 §2; 2023 c.490 §6; 2025 c.453 §7]

Note: Section 7, chapter 490, Oregon Laws 2023, provides:

Sec. 7. The amendments to ORS 316.792 by section 6 of this 2023 Act apply to tax years beginning on or after January 1, 2021. [2023 c.490 §7]

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

Note: Sections 6 and 7, chapter 826, Oregon Laws 2005, provide:

Sec. 6. Amounts received as a result of the sale of a manufactured dwelling park are exempt from the tax imposed by this chapter [ORS chapter 316]:

(1) If the sale is made to a corporate entity formed by the tenants of the park, or by a nonprofit corporation or housing authority, as described in ORS 90.844.

(2) If the manufactured dwelling park has been destroyed by a natural disaster, as defined in section 2, chapter 260, Oregon Laws 2021 [197.488], and the sale is made to a nonprofit corporation or housing authority that will redevelop the site as a manufactured dwelling park. [2005 c.826 §6; 2014 c.89 §16; 2015 c.217 §9; 2021 c.528 §21]

Sec. 7. (1) Section 6, chapter 826, Oregon Laws 2005, applies to tax years beginning on or after January 1, 2006, and before January 1, 2032.

(2) The amendments to section 6, chapter 826, Oregon Laws 2005, by section 9, chapter 217, Oregon Laws 2015, apply to tax years beginning on or after January 1, 2015, and before January 1, 2032.

(3) The amendments to section 6, chapter 826, Oregon Laws 2005, by section 21, chapter 528, Oregon Laws 2021, apply to tax years beginning on or after January 1, 2021, and before January 1, 2032. [2005 c.826 §7; 2007 c.906 §21; 2013 c.750 §36; 2015 c.217 §14; 2019 c.579 §20; 2021 c.528 §22; 2025 c.562 §7]

316.794 [Formerly 316.052; repealed by 1987 c.293 §70]

316.795 Exemption for payments to tenants of manufactured dwelling parks upon termination of rental agreement. Amounts received by a taxpayer under ORS 90.645 (1) are exempt from the taxes imposed by this chapter. [2007 c.906 §12]

(First-time Home Buyer Savings Accounts)

316.796 Definitions. As used in ORS 316.796 to 316.808:

(1) “Account holder” means an individual who establishes a first-time home buyer savings account.

(2) “Allowable closing costs” means disbursements listed in a settlement statement for the purchase of a single family residence by an account holder or a qualified beneficiary.

(3) “Eligible costs” means the down payment and allowable closing costs for the purchase of a single family residence by an account holder or a qualified beneficiary.

(4) “Financial institution” means a bank, a trust company, a commercial bank, a national bank, a savings bank, a savings and loan, a thrift institution, a credit union, an insurance company, a mutual fund, an investment firm or a similar entity authorized to do business in this state.

(5) “First-time home buyer” means an individual who is a resident of this state and has not owned or purchased, either individually or jointly, a single family residence during a period of three years prior to the date of the purchase of a single family residence.

(6) “First-time home buyer savings account” or “account” means an account established as a first-time home buyer savings account that the account holder designates for the purpose of paying or reimbursing eligible costs for the purchase of a single family residence in this state by the account holder or by a qualified beneficiary.

(7) “Qualified beneficiary” means an individual who is designated by an account holder as the account holder’s intended recipient of funds to be withdrawn from a first-time home buyer savings account and used for purposes consistent with ORS 316.796 to 316.808.

(8) “Resident of this state” has the meaning given that term in ORS 316.027.

(9) “Settlement statement” means the statement of receipts and disbursements for a transaction related to real estate, including a statement prescribed under the Real Estate Settlement Procedures Act of 1974, 12 U.S.C. 2601 et seq., and regulations thereunder.

(10) “Single family residence” means a residence intended for occupation by a single family unit that is owned and occupied as the principal residence of the account holder or a qualified beneficiary. “Single family residence” includes a manufactured home, residential trailer, mobile home or condominium unit.

(11) “Taxable income” has the meaning given that term in ORS 316.022. [2018 c.109 §2; 2024 c.53 §4]

316.797 First-time home buyer savings account; restrictions. (1) An individual may create a first-time home buyer savings account with a financial institution to be used to pay or reimburse eligible costs related to the purchase of a single family residence by an account holder or qualified beneficiary.

(2) An individual may jointly own a first-time home buyer savings account with another person if the joint account holders file a joint income tax return.

(3) During any calendar year, an individual may be either:

(a) The account holder of not more than one first-time home buyer savings account; or

(b) The qualified beneficiary of not more than one first-time home buyer savings account.

(4) Only cash may be contributed to a first-time home buyer savings account. Subject to the limitations of ORS 316.798 (4), persons other than the account holder may contribute funds to a first-time home buyer savings account. There is no limitation on the amount of contributions that may be made to or retained in a first-time home buyer savings account.

(5) The account holder may not use funds held in a first-time home buyer savings account to pay expenses of administering the account, except that the financial institution that administers the account may deduct a service fee from the account.

(6) An account holder may withdraw all or part of the funds from a first-time home buyer savings account and deposit the funds in a new first-time home buyer savings account held by a different financial institution or the same financial institution. [2018 c.109 §3; 2024 c.53 §5]

316.798 Subtraction for contributions; exemption for earnings; limitations. (1) Subject to ORS 316.800, and in addition to the other modifications to federal taxable income contained in this chapter, there shall be subtracted from federal taxable income the amount of funds contributed by an account holder to the account holder’s first-time home buyer savings account during the tax year, not to exceed $5,000 for an account holder who files an individual income tax return or $10,000 for joint account holders who file a joint income tax return.

(2) Earnings, including interest and other income, on the principal in the account during the tax year are exempt from taxation until withdrawn by the taxpayer, subject to subsection (3) of this section.

(3) An account holder may claim the subtraction and exemption under subsections (1) and (2) of this section:

(a) For contributions made into a first-time home buyer savings account opened before January 1, 2032;

(b) For a period not to exceed 10 years from the date the account holder first opens any first-time home buyer savings account; and

(c) For an aggregate total amount of principal and earnings not to exceed $50,000 during the 10-year period.

(4) A person other than the account holder who deposits funds in a first-time home buyer savings account is not entitled to the subtraction and exemption provided for in this section. [2018 c.109 §4; 2025 c.562 §23]

316.799 [Formerly 316.053; repealed by 1987 c.293 §70]

316.800 Limits phased out based on income applicable to subtraction or exemption. (1) The limits applicable to a subtraction from federal taxable income and an exemption allowed under ORS 316.798 are:

(a) $10,000 if reported on a joint income tax return, or $5,000 for all others, if the federal adjusted gross income of the taxpayer for the tax year is less than $149,000 or, if reported on other than a joint return, less than $104,000.

(b) $8,000 if reported on a joint income tax return, or $4,000 for all others, if the federal adjusted gross income of the taxpayer for the tax year is $149,000 or more and less than $158,000 or, if reported on other than a joint return, $104,000 or more and less than $111,000.

(c) $6,000 if reported on a joint income tax return, or $3,000 for all others, if the federal adjusted gross income of the taxpayer for the tax year is $158,000 or more and less than $167,000 or, if reported on other than a joint return, $111,000 or more and less than $117,000.

(d) $4,000 if reported on a joint income tax return, or $2,000 for all others, if the federal adjusted gross income of the taxpayer for the tax year is $167,000 or more and less than $176,000 or, if reported on other than a joint return, $117,000 or more and less than $123,000.

(e) $2,000 if reported on a joint income tax return, or $1,000 for all others, if the federal adjusted gross income of the taxpayer for the tax year is $176,000 or more and less than $187,000 or, if reported on other than a joint return, $123,000 or more and less than $131,000.

(2) If the federal adjusted gross income of the taxpayer for the tax year is $187,000 or more if reported on a joint income tax return, or $131,000 or more if reported on other than a joint income tax return, the limit is zero and the taxpayer is not allowed a subtraction from federal taxable income or an exemption under ORS 316.798.

(3) The Department of Revenue by rule may adjust the limits applicable in the current tax year to the subtractions and exemptions specified in subsection (1) of this section so that the limits reflect the percentage change in the U.S. City Average Consumer Price Index, as published by the Bureau of Labor Statistics of the United States Department of Labor, during the tax year.

(4) Any amounts contributed to a first-time home buyer savings account that are not subtracted from federal taxable income for any reason may not be carried forward as a subtraction for any succeeding tax year. [2018 c.109 §6]

316.801 Addition for certain amounts withdrawn; penalty; exceptions. (1) There shall be added to federal taxable income the amount of funds a taxpayer withdraws from a first-time home buyer savings account established under ORS 316.797, if:

(a) Those funds were used for a purpose other than eligible costs;

(b) In this tax year or a previous tax year, those funds were subtracted or exempted from federal taxable income under ORS 316.798; and

(c) Those funds were not deposited into another first-time home buyer savings account held by the taxpayer.

(2) There shall be added to federal taxable income the amount of funds a taxpayer holds in a first-time home buyer savings account not expended on eligible costs by December 31 of the last year of the 10-year period described under ORS 316.798 (3) if in a previous tax year those funds were subtracted or exempted from federal taxable income under ORS 316.798.

(3) The Department of Revenue shall assess a penalty against the taxpayer in the amount of five percent of the funds withdrawn from a taxpayer’s first-time home buyer savings account, if:

(a) The withdrawal of funds occurs during the 10-year period set forth in ORS 316.798 (3); and

(b) The withdrawn funds are not used for eligible costs or deposited into another first-time home buyer savings account held by the taxpayer.

(4) The penalty described in subsection (3) of this section does not apply to any funds withdrawn from a first-time home buyer savings account of:

(a) A taxpayer who is deceased;

(b) A taxpayer who has filed for protection under the United States Bankruptcy Code (11 U.S.C. 101 et seq.); or

(c) A taxpayer whose loss of use or function of any portion of the body permanently incapacitates the taxpayer from regularly performing work at a gainful and suitable occupation. [2018 c.109 §7]

316.802 [1969 c.493 §71; renumbered 316.970]

316.803 Obligations of financial institution; provision of certificates to account holders. (1) On or before January 31 of each calendar year, for calendar years beginning before January 1, 2025, a financial institution at which an account holder has created a first-time home buyer savings account shall provide to the account holder a certificate containing the following information:

(a) The date when the account was created;

(b) The name of the account holder;

(c) The amount of funds contributed to the account during the tax year;

(d) The amount of funds withdrawn from the account during the tax year; and

(e) Any other information as required by rules adopted by the Department of Revenue.

(2) A financial institution is not required to:

(a) Track the use of moneys withdrawn from a first-time home buyer savings account;

(b) Allocate funds in a first-time home buyer savings account among joint account holders; or

(c) Designate an account as a first-time home buyer savings account, including in the account contracts or systems of the financial institution.

(3) An account holder or a joint account holder may designate an account at a financial institution as a first-time home buyer savings account and may designate a proposed first-time home buyer as the qualified beneficiary of the account. The designations required under this subsection shall be made to the Department of Revenue, in a form and manner prescribed by the department. The department may provide a means by which the designations required under this subsection are indicated on an income tax return filed by the account holder.

(4) A financial institution is not responsible or liable for:

(a) Determining or ensuring that an account satisfies the requirements to be a first-time home buyer savings account;

(b) Determining or ensuring that funds in a first-time home buyer savings account are used for eligible costs; or

(c) Reporting or remitting taxes or penalties related to the use of a first-time home buyer savings account.

(5) Upon being furnished proof of the death of the account holder and such other information required by the contract governing the first-time home buyer savings account, a financial institution shall distribute the principal and accumulated interest or other income in the first-time home buyer savings account in accordance with the terms of the contract governing the account. [2018 c.109 §8; 2024 c.53 §6]

Note: Section 9, chapter 109, Oregon Laws 2018, provides:

Sec. 9. ORS 316.796 to 316.803 [series became 316.796 to 316.808] apply to tax years beginning on or after January 1, 2019, and before January 1, 2042. [2018 c.109 §9; 2025 c.562 §24]

316.805 [1953 c.304 §100; repealed by 1969 c.493 §99]

316.806 [Formerly 316.057; renumbered 316.811 in 2025]

316.807 Taxpayer to maintain records. (1) For each tax year in which a taxpayer claims a subtraction or exemption under ORS 316.798, the taxpayer shall maintain the records described in subsection (2) of this section, and any other records as required by the Department of Revenue under ORS 316.796 to 316.808.

(2) A taxpayer shall maintain, and shall furnish to the department upon the request of the department, the following:

(a) Account statements that show the contributions made during the tax year and the taxable interest or earnings on the account in the tax year for which the subtraction or exemption is claimed;

(b) The information return issued by the financial institution for the account for the tax year for which the subtraction or exemption is claimed; and

(c) Upon a withdrawal of funds from a first-time home buyer savings account, a copy of the real estate settlement statement demonstrating that the withdrawal was used for eligible costs. [2024 c.53 §2]

316.808 Rules; financial institutions not subject to obligations related to first-time home buyer savings accounts; informational materials. (1) The Department of Revenue may adopt rules to administer ORS 316.796 to 316.808. Rules adopted under this section may not impose administrative, reporting or other obligations or requirements on financial institutions related to first-time home buyer savings accounts.

(2) The department may prepare and distribute informational materials regarding the first-time home buyer savings account to financial institutions and potential home buyers to publicize the availability of first-time home buyer savings accounts. [2024 c.53 §3]

316.810 [1953 c.304 §101; repealed by 1969 c.493 §99]

(Additional Modifications of Taxable Income)

316.811 Definitions for ORS 316.811 to 316.818. As used in ORS 316.811 to 316.818:

(1) “Construction job site” means the specific location of a construction project.

(2) “Construction project” means the construction, alteration, repair, improvement, moving or demolition of a structure and appurtenances thereto.

(3) “Construction worker” means a person who is a member of a recognized construction trade, craft, union or industrial occupation and who is lawfully engaged in the performance of labor, pursuant to contract or subcontract, at a construction project.

(4) “Traveling expenses” means daily transportation expenses that:

(a) Are not otherwise deductible under the federal Internal Revenue Code.

(b) Are incurred by a construction worker in job-related travel between a construction job site located more than 50 miles from the principal residence of the construction worker.

(5) “Traveling expenses” includes gas, oil and automobile repairs and maintenance, but does not include meals unless the construction worker is required by the employer to stay overnight at the construction job site. [Formerly 316.806]

316.812 Certain traveling expenses. In addition to the modifications to federal taxable income contained in this chapter, there shall be subtracted from federal taxable income traveling expenses, as defined in ORS 316.811, incurred by a construction worker during the first year of continuous employment on the same construction job site. However, if employment on the same construction job site is temporarily interrupted for any reason whatsoever, the period of interruption shall not be taken into account in determining the one-year period. [Formerly 316.058]

316.815 [1953 c.304 §102; 1955 c.582 §1; repealed by 1969 c.493 §99]

316.818 Proof of expenses. The modification to federal taxable income by ORS 316.812 shall be substantiated by any proof required by the Department of Revenue by rule. The requirement for substantiation may be waived partially, conditionally or absolutely, as provided under ORS 315.063. [Formerly 316.059; 1995 c.54 §13]

316.820 [1953 c.304 §103; 1963 c.627 §19 (referred and rejected); repealed by 1969 c.493 §99]

316.821 Federal election to deduct sales taxes; addition for state purposes. (1) A taxpayer that elects to deduct state and local sales taxes under section 164(b)(5) of the Internal Revenue Code for federal tax purposes must make the same election for purposes of the tax imposed by this chapter.

(2) A taxpayer that elects to deduct state and local sales taxes under section 164(b)(5) of the Internal Revenue Code for federal tax purposes shall add the amount deducted to federal taxable income for purposes of the tax imposed by this chapter. [2005 c.832 §30]

316.824 Definitions for ORS 316.824 and 316.832. As used in ORS 316.824 and 316.832:

(1) “Forest products” means any merchantable form including but not limited to logs, poles and piling, into which a fallen tree may be cut before it undergoes manufacturing.

(2) “Logger” means a person commonly known as a faller or bucker who furnishes and maintains personal equipment in the commercial harvesting of forest products and who is paid on a per-unit cut basis.

(3) “Logging operation site” means the specific location of the commercial harvesting of forest products.

(4) “Traveling expenses” means daily transportation expenses that:

(a) Are not otherwise deductible under the federal Internal Revenue Code.

(b) Are incurred by a logger in job-related travel between a logging operation site located more than 50 miles from the principal residence of the logger.

(5) “Traveling expenses” includes gas, oil and automobile repairs and maintenance but does not include meals or lodging. [Formerly 316.061]

316.825 [1953 c.304 §104; repealed by 1969 c.493 §99]

316.827 [1957 s.s. c.15 §7; last sentence derived from 1957 s.s. c.15 §8; 1963 c.627 §20 (referred and rejected); repealed by 1969 c.493 §99]

316.830 [1953 c.304 §105; repealed by 1969 c.493 §99]

316.832 Travel expenses for loggers. (1) In addition to the modifications to federal taxable income contained in this chapter, there shall be subtracted from federal taxable income traveling expenses incurred by a logger in job-related travel.

(2) The modification to federal taxable income by subsection (1) of this section shall be substantiated by any proof required by the Department of Revenue by rule. The requirement for substantiation may be waived partially, conditionally or absolutely, as provided under ORS 315.063. [Formerly 316.063; 1995 c.54 §14; 2011 c.83 §20]

316.834 [1991 c.863 §33; repealed by 2009 c.33 §23]

316.835 [1953 c.304 §106; repealed by 1969 c.493 §99]

316.836 Qualified production activities income. A taxpayer that is allowed a deduction for qualified production activities income under section 199 of the Internal Revenue Code for federal tax purposes shall add the amount deducted to federal taxable income for purposes of the tax imposed by this chapter. [2005 c.832 §41]

316.837 Addition for federal prescription drug plan subsidies excluded for federal tax purposes. A taxpayer that is allowed an exclusion from gross income under section 139A of the Internal Revenue Code for federal tax purposes shall add the amount excluded to federal taxable income for purposes of the tax imposed by this chapter. [2005 c.832 §42]

316.838 Art object donation. (1) As used in this section, “art object” means a painting, sculpture, photograph, graphic or craft art, industrial design, costume or fashion design, tape or sound recording or film.

(2) A subtraction from federal taxable income is allowed for a charitable contribution of an art object, if the art object has not been previously sold or otherwise transferred by its creator and the creator makes a charitable contribution of the art object that qualifies for the deduction allowed by section 170 of the Internal Revenue Code for the tax year.

(3) The subtraction under this section shall equal any positive amount obtained by subtracting the amount otherwise deductible on the Oregon tax return of the taxpayer-creator for the tax year as charitable contributions from the amount that would have been deductible by the taxpayer-creator if the deduction for charitable contributions had been computed without reduction in amount under section 170 (e) of the Internal Revenue Code for the art object charitably contributed by its creator.

(4) The taxpayer-creator is not allowed a subtraction under this section unless the taxpayer-creator obtains an appraisal report showing the fair market value of the art object at the time the contribution was made. [Formerly 316.064; 1989 c.938 §1; 2021 c.36 §1]

316.840 [1953 c.304 §107; 1961 c.506 §3; repealed by 1969 c.493 §99]

316.844 Special computation of gain or loss where farm use value used. (1) Notwithstanding any other provision of this chapter, when gain or loss that is included in federal taxable income is derived from the disposition of property and the gain, loss or basis computed with respect to that disposition involves, in whole or in part, property that was valued at the property’s value for farm use or as forestland under ORS 118.155 (1995 Edition), then there shall be added to federal taxable income the difference between the taxable gain or loss that would otherwise be determined under this chapter and the gain or loss that would be taxable had the basis for federal tax purposes been computed using the forest or farm use value provided for under ORS 118.155 (1995 Edition) instead of the basis computed pursuant to section 1014 of the Internal Revenue Code.

(2) This section applies to gains and losses from dispositions of property acquired from a decedent, or from property the basis of which is computed in whole or in part with respect to property acquired from a decedent, whose death occurred before January 1, 1987. [Formerly 316.081; 1987 c.646 §13; 1997 c.99 §19]

316.845 Exception to ORS 316.844. ORS 316.844 shall not apply in any case in which a carryover basis for certain property acquired from a decedent dying after December 31, 1976, is provided by section 1014 of the Internal Revenue Code. [Formerly 316.083]

316.846 Scholarship awards used for housing expenses. (1) There shall be subtracted from federal taxable income amounts received from a scholarship awarded to the taxpayer or a dependent of the taxpayer that are used for housing expenses of the scholarship recipient at the time the scholarship recipient is attending an accredited community college, college, university or other institution of higher education.

(2) A subtraction may not be allowed under this section if the amounts described in subsection (1) of this section:

(a) Are not included in the taxpayer’s federal gross income for the tax year; or

(b) Are taken into account as a deduction on the taxpayer’s federal income tax return for the tax year. [1999 c.747 §2]

316.847 National service educational award. (1) There shall be subtracted from federal taxable income amounts received as a national service educational award under 42 U.S.C. 12602, following completion of the required term of service in 42 U.S.C. 12593(b).

(2) A subtraction may not be allowed under this section if the amounts described in subsection (1) of this section:

(a) Are not included in the taxpayer’s federal gross income for the tax year; or

(b) Are taken into account as a deduction on the taxpayer’s federal income tax return for the tax year. [2021 c.525 §36]

Note: Section 37, chapter 525, Oregon Laws 2021, provides:

Sec. 37. Section 36 of this 2021 Act [316.847] applies to amounts received in tax years beginning on or after January 1, 2021, and before January 1, 2027. [2021 c.525 §37]

316.848 Individual development accounts. (1) In addition to the other modifications to federal taxable income contained in this chapter, there shall be subtracted from federal taxable income the amount of taxpayer deposits to an individual development account established by the taxpayer under ORS 458.685.

(2) Matching deposits made by a fiduciary organization to an individual development account, and interest accruing on account holder deposits and matching deposits, are exempt from taxation until withdrawn by the taxpayer.

(3) Moneys withdrawn by the taxpayer from an individual development account for an approved purpose, as described under ORS 458.685, are exempt from taxation under this chapter. A withdrawal by a taxpayer for a purpose other than an approved purpose is taxable under this chapter. [1999 c.1000 §10]

316.849 [Formerly 316.145; repealed by 1993 c.475 §3]

316.850 Personal casualty loss. (1) There shall be subtracted from federal taxable income any amount of personal casualty loss that is incurred in Oregon and that would be deductible under section 165(c) and (h) of the Internal Revenue Code, but for the operation of section 165(h)(5) of the Internal Revenue Code.

(2) A subtraction under this section is allowed only for a personal casualty loss that:

(a) Results from an event that is the subject of a state of emergency declared by the Governor; or

(b) Occurs in an area subject to a Governor’s executive order invocating the Emergency Conflagration Act under ORS 476.510 to 476.610.

(3) A subtraction may not be allowed under this section if the amount described in subsection (1) of this section:

(a) Is a loss from theft; or

(b) Is taken into account as a deduction on the taxpayer’s federal income tax return for the tax year. [2023 c.324 §2]

Note: Section 3, chapter 324, Oregon Laws 2023, provides:

Sec. 3. Section 2 of this 2023 Act [316.850] applies to tax years beginning on or after January 1, 2020, and before January 1, 2026. [2023 c.324 §3]

316.852 [1999 c.358 §2; 2011 c.301 §3; repealed by 2025 c.36 §4]

316.853 Addition for amount deducted as deemed repatriation. In addition to the other modifications to federal taxable income contained in this chapter, to derive Oregon taxable income there shall be added to federal taxable income any amount deducted, for the tax year, for federal income tax purposes under section 965(c)(1) of the Internal Revenue Code. [2019 c.556 §2]

316.854 [Formerly 316.150; 1985 c.802 §16a; repealed by 1987 c.293 §70]

316.855 [1953 c.304 §108; 1963 c.305 §1; repealed by 1969 c.493 §99]

316.856 Severance pay; rules. (1) As used in this section:

(a) “Invest” means to exchange cash for equity, debt, convertible debt or management responsibilities, accompanied by terms that substantiate ownership or control of an interest in a business. “Invest” does not mean to make a loan to a business.

(b) “Material participation” has the meaning given that term in section 469 of the Internal Revenue Code.

(c) “Severance pay” means funds paid to an employee upon termination of employment, other than back wages, vacation pay or sick pay.

(d) “Small business” has the meaning given that term in ORS 183.310.

(2) There shall be subtracted from federal taxable income an amount equal to severance pay that a taxpayer receives during the tax year and invests in a new or existing small business in this state if:

(a) The investment occurs on or before the due date for the return for the tax year or the expiration of the extension period for filing that return, if any;

(b) The investment continues for at least 24 months following termination of employment;

(c) The taxpayer materially participates in the small business;

(d) The taxpayer has not previously claimed a subtraction under this section; and

(e) The small business is not the employer that paid the severance pay and does not have any owner in common with the employer that paid the severance pay.

(3) The subtraction under this section may not exceed the lesser of:

(a) The minimum balance of principal that remains invested by the taxpayer in the small business at the close of any month during the 24 months following termination of employment; or

(b) $500,000.

(4) If at any time the Department of Revenue determines that a taxpayer is not in compliance with any of the provisions of this section, the department shall disallow the subtraction under this section. Upon this disallowance, the department shall determine the amount of tax due absent the subtraction under this section and immediately shall collect any taxes due by reason of the disallowance.

(5) The Department of Revenue shall establish by rule procedures for administering this section, including procedures for verifying the receipt of severance pay by the taxpayer. [2010 c.66 §2]

316.857 [1989 1985 c.352 §2; renumbered 316.216 in 1989]

316.859 Addition for amount deducted as qualified business income from pass-through entity. There shall be added to federal taxable income for Oregon tax purposes the amount allowable as a deduction under section 199A(a) of the Internal Revenue Code for the tax year. [2018 c.108 §10]

316.860 [1953 c.304 §109; repealed by 1969 c.493 §99]

316.861 Addition of purchase price of purchased winning lottery ticket. If the amount of the purchase price of a lottery ticket that is purchased in violation of ORS 461.610 is allowed as a deduction for federal tax purposes, the amount of the purchase price shall be added to federal taxable income for Oregon tax purposes. [2025 c.46 §4]

316.863 [1985 c.802 §3; repealed by 1997 c.839 §69]

316.865 [1953 c.304 §110; repealed by 1969 c.493 §99]

(Wildfire-related Litigation)

316.866 Amounts received in civil action arising from wildfire. (1) There shall be subtracted from federal taxable income any amount received in judgment or settlement of a civil action arising from a wildfire, as defined in ORS 477.089, and awarded to a plaintiff.

(2) A subtraction under this section is allowed only for resolution of civil actions arising from a wildfire that:

(a) Is the subject of a state of emergency declared by the Governor;

(b) Occurs in an area subject to an executive order of the Governor invoking the Emergency Conflagration Act under ORS 476.510 to 476.610; or

(c) Is a federally declared disaster, as defined in section 165 of the Internal Revenue Code, whether located within Oregon or elsewhere.

(3) A subtraction under this section:

(a) Is not allowed for any amount described in subsection (1) of this section that is taken into account as a deduction or credit on the taxpayer’s federal income tax return for any tax year; and

(b) Is allowed only to the extent that losses, expenses or other damages compensated by the amount of the judgment or settlement are not compensated for by insurance or otherwise. [2024 c.50 §2]

316.867 Legal fees in wildfire-related litigation. (1) As used in this section:

(a) “Wildfire” means a wildfire as defined in ORS 477.089, that:

(A) Is the subject of a state of emergency declared by the Governor;

(B) Occurs in an area subject to an executive order of the Governor invoking the Emergency Conflagration Act under ORS 476.510 to 476.610; or

(C) Is a federally declared disaster, as defined in section 165 of the Internal Revenue Code, whether located within Oregon or elsewhere.

(b) “Wildfire-related litigation” means litigation through which a plaintiff seeks compensation for losses, expenses or damages found to be caused by a wildfire.

(2) There may be subtracted from federal taxable income the amount:

(a) That would be allowable under sections 63(d) and 67 of the Internal Revenue Code as amended and in effect on December 21, 2017, and as applicable to tax years beginning before January 1, 2018, as a deduction for legal fees incurred by a plaintiff in wildfire-related litigation; and

(b) As applicable to the tax year of the taxpayer.

(3) A subtraction under this section is allowed regardless of whether the taxpayer elects to deduct itemized deductions on the taxpayer’s federal or state return. [2024 c.50 §3]

Note: Section 4, chapter 50, Oregon Laws 2024, provides:

Sec. 4. (1) Section 2 of this 2024 Act [316.866] applies to declarations and executive orders issued on or after January 1, 2018, and before January 1, 2026, and, notwithstanding ORS 315.037, to amounts received in all tax years beginning on or after January 1, 2018.

(2) Section 3 of this 2024 Act [316.867] applies to:

(a) Declarations and executive orders issued on or after January 1, 2018, and before January 1, 2026; and

(b) Notwithstanding ORS 315.037, losses incurred and legal fees paid or incurred in all tax years beginning on or after January 1, 2018. [2024 c.50 §4]

316.870 [1953 c.304 §111; repealed by 1969 c.493 §99]

316.871 [1985 c.715 §2; 1987 c.293 §9; 1993 c.18 §82; 1997 c.772 §30; 2009 c.33 §24; repealed by 2011 c.83 §21]

316.872 [1985 c.715 §3; 1987 c.647 §15; repealed by 2011 c.83 §21]

316.873 [1995 c.809 §2; 1997 c.839 §25; repealed by 2011 c.83 §21]

316.874 [1995 c.809 §3; repealed by 2011 c.83 §21]

316.875 [1953 c.304 §112; repealed by 1969 c.493 §99]

316.876 [1995 c.809 §4; repealed by 2011 c.83 §21]

316.877 [1995 c.809 §5; repealed by 2011 c.83 §21]

316.878 [1995 c.809 §6; repealed by 2011 c.83 §21]

316.879 [1995 c.809 §7; repealed by 2011 c.83 §21]

316.880 [1953 c.304 §113; repealed by 1969 c.493 §99]

316.881 [1995 c.809 §8; repealed by 2011 c.83 §21]

316.882 [1995 c.809 §9; repealed by 2011 c.83 §21]

316.883 [1995 c.809 §10; repealed by 2011 c.83 §21]

316.884 [1995 c.809 §12; repealed by 2011 c.83 §21]

316.885 [1953 c.304 §114; repealed by 1969 c.493 §99]

(Prior Laws Superseded)

316.970 Effect of chapter 493, Oregon Laws 1969. This chapter is intended to supersede any conflicting provisions of law in effect on August 22, 1969, to the extent of such conflict. [Formerly 316.802]

316.990 [1953 c.304 §115; repealed by 1957 c.632 §1 (314.991 enacted in lieu of 316.990 and 317.990)]

PENALTIES

316.992 Penalty for filing incorrect return that is based on frivolous position or is intended to delay or impede administration; appeal. (1) The Department of Revenue shall assess a penalty of $250 against any individual who files what purports to be a return of the tax imposed by this chapter but which:

(a) Does not contain information on which the substantial correctness of the self-assessment may be judged; or

(b) Contains information that on its face indicates that the self-assessment is substantially incorrect.

(2) A penalty may be imposed under subsection (1) of this section only if the conduct referred to in subsection (1) of this section is due to:

(a) A position which is frivolous; or

(b) An intention, apparent on the face of the purported return, to delay or impede the administration of the income tax laws of this state.

(3) The penalty imposed under this section is in addition to any other penalty imposed by law. Any person against whom a penalty is assessed under this section may appeal to the tax court as provided in ORS 305.404 to 305.560. If the penalty is not paid within 10 days after the order of the tax court becomes final, the department may record the order and collect the amount assessed in the same manner as income tax deficiencies are recorded and collected under ORS 314.430.

(4) If an assessment of tax due for the taxable year with respect to which a penalty is imposed under this section is under appeal at the same time that an appeal is filed under this subsection, the tax court may consolidate the appeals into a single proceeding.

(5) As used in this section, “a position which is frivolous” includes, but is not limited to:

(a) Reference to a spurious constitutional argument;

(b) Reliance on a “gold standard” or “war tax” deduction;

(c) An argument that wages or salary are not includable in taxable income;

(d) An argument that the Sixteenth Amendment to the United States Constitution was not properly adopted; or

(e) An argument that “unenfranchised, sovereign, freemen or natural persons” are not subject to the tax laws. [1987 c.843 §11; 1995 c.650 §39]

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