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Oregon Bulletin

February 1, 2012

 

Department of Revenue
Chapter 150

Rule Caption: To make permanent the actions take on rules reviewed in the Fall process.

Adm. Order No.: REV 4-2011

Filed with Sec. of State: 12-30-2011

Certified to be Effective: 1-1-12

Notice Publication Date: 11-1-2011

Rules Adopted: 150-314.HB2071(B), 150-315.326, 150-314.HB2071(A)

Rules Amended: 150-18.385, 150-18.385(A), 150-314.360, 150-267.380(2), 150-314.280-(F), 150-317.710(5)(b), 150-294.435(1)-(A), 150-294.435(1)-(C), 150-294.480, 150-294.525-(A), 150-311.216

Rules Repealed: 150-315.354

Rules Ren. & Amend: 150-307.250(1)(c) to 150-307.250, 150-308.290(4)(b) to 150-308.290-(B)

Subject: Personal Tax: 150-314.HB2071(B) – This rule implements HB 2071 which allows the department to mandate the electronic filing of tax returns by paid preparers when the paid preparer is required to do so by federal law. It also delineates waivers to the mandate.

      150-315.326 – This rule outlines the procedures for the tax credit auctions mandated by OR Laws 2011 Chapter 730, Sec 23 (HB 3672).

      150-18.385 – The rule describes tax garnishments of wages, the numbers and examples need updating.

      150-18.385(A) - HB 2682 changed the minimum wage exemption for the garnishment of wage exemption calculation. Numbers and examples are updated.

      150-314.360 – This rule defines which information returns must be filed electronically. The change is to add back language explaining that DOR can require filing of informational returns for those not already required to file.

      Business Tax: 150-314.HB 2071 (A) – HB 2071 from the 2011 legislative session provides the department authority to by rule require corporations to file a tax return electronically if the corporation is required to file their federal return electronically.

      150-267.380(2) – Removing an incorrect statement that says tip income is not subject to withholding (and therefore, transit taxes) under ORS Chapter 316.

      150-314.280-(F) – To add language to the property, payroll, sales factor provisions of the rule that clarifies the provisions apply unless otherwise provided by rule, and to delete the invalidated provision related to other factors per OAR 150-314.670.

      150-317.710(5)(b) – Based on the changes of HB 2653 from the 2009 legislative session, OAR 150-317.710(5)(b) conflicts with ORS 314.650. Per HB 2653, taxpayers in the forest products industry are no longer required or allowed to use a double-weighted sales apportionment formula. For tax years beginning on or after 1/1/2010 all forest product companies are required to apportion business income using a single sales factor.

      150-315.354 – HB 3606 from the 2011 legislative session eliminated the need for the department to provide guidance by rule as to when a transferee may first claim the credit. HB 3606 removed the transferee provision from ORS 315.354 and placed it under the Department of Energy’s authority in ORS 469.220. The current rule is outdated and no longer accurate.

      Property Tax: 150-294.435(1)-(A): This rule clarifies ORS 294.435 in regard to the form of property tax levies that are approved by the budget committee and imposed by a local government. This amendment better reflects the language in ORS 310.060 that requires the tax amount or rate for each levy to be stated separately. The language of the existing rule could give the erroneous impression that levy amounts or rates could be combined.

      150-294.435(1)-(C): This rule clarifies the requirements for publishing an amended budget. Statutes were changed by HB 2425 so existing cites in the rule are to the wrong statute, and to a statute that is now repealed.

      150-294.480: Amending this rule to describe the requirements for adopting a supplemental budget and for publishing the notices required by ORS 294.480 and Chapter 473, Section 10, Oregon Laws 2011.

      150-294.525-(A): This amendment removes language for a requirement that no longer exists in statute.

      150-311.216: To correct the statement that property could only be added as omitted if it was “due to the assessor’s lack of knowledge.” Also renaming, updating language and formatting to make more readable.

      Statute requires that if omitted property “has from any cause been omitted, it must be added to the roll. When the rule was revised in 1994, the intent of the rule writer was to offer one example of when omitted property could be added. However the wording did not convey the intended meaning, but rather that only property that had been omitted “due to the assessor’s lack of knowledge of its existence” could be added to the roll.

      150-307.250: Renumbering. Making a technical correction and inserting to the statute.

      150-308.290(4)(b): Renumbering. Removing language stating the department will allow 14 days to resubmit an incomplete industrial property tax return after the date the department mailed the return to the taxpayer. The existing rule exceeds statutory authority.

Rules Coordinator: Ken Ross—(503) 945-8890

150-18.385

Oregon Department of Revenue Tax Garnishments and Orders to Withhold Child or Spousal Support

(1) The Department of Revenue is authorized to continuously garnish up to 25 percent of an employee’s disposable earnings to recover delinquent state tax debt. Concurrently, a district attorney or the Division of Child Support of the Department of Justice is authorized to request the courts to order the withholding of delinquent and current child or spousal support from an employee’s disposable earnings.

(2) Under ORS 18.385(4), the maximum disposable earnings subject to garnishment is reduced by an order to withhold wages for child or spousal support under ORS 25.378, 419B.408 or 419C.600 or ORS Chapter 110. Normally, any other existing garnishments would then be limited to 25 percent of disposable earnings after subtracting the order to withhold wages. However, ORS 18.385(6) specifies that, for garnishments to pay state tax debt, the provisions of ORS 18.385(4) do not apply. Therefore, a garnishment to pay state tax debt would be calculated upon disposable earnings and not reduced by an order to withhold child or spousal support.

Example 1: Larry has $4,000 per month of disposable earnings.

Larry owes delinquent child support totaling $15,000. An order to withhold child support has been granted that requires Larry’s employer to withhold a specified amount of $1,400 from disposable earnings.

Larry also owes a state personal income tax debt totaling $5,000. The department has garnished Larry’s employer for 25 percent of disposable earnings. The employer would calculate and pay the order to withhold child support and the garnishment as follows:

(A) Disposable earnings                       $4,000

(B) Order to Withhold specified amount of $1,400 for child or spousal support ($1,400).

(C) Personal Income Tax Garnishment at 25 percent ($4,000 x .25) ($1,000).

(D) Net disposable earnings to Larry — $1,600.

(E) Payment for Order to Withhold — $1,400.

(F) Payment for Personal Income Tax Garnishment — $1,000.

(3) If for any reason orders to withhold wages for child or spousal support and garnishments for state tax debt exceed the disposable earnings of the taxpayer, any orders to withhold wages under ORS 25.378 will have priority over any other legal process, including all garnishments for state tax debt or otherwise (ORS 25.375). The employer will reduce payments pursuant to the department’s garnishment as needed.

Example 2: Renee’s employer has been paying a specified amount of $1,400 from Renee’s disposable earnings under an order to withhold child support. The employer now has received a Special Notice of Garnishment from the department that causes a one-time garnishment of 100 percent of Renee’s disposable earnings. Since more than 100 percent of Renee’s disposable earnings has been attached, under ORS 25.375, the order to withhold now takes priority. The employer would compute and distribute payments under the order and garnishment as follows:

(A) Disposable earnings — $4,000.

(B) Order to Withhold specified amount of $1,400 for child or spousal support ($1,400).

(C) Personal Income Tax Garnishment at 100 percent but limited to remainder of disposable earnings after order to withhold is paid ($4,000 x 100% = $4,000 less order of $1,400) ($2,600).

(D) Net disposable earnings to Renee — $0.

(E) Payment for Order to Withhold — $1,400.

(G) Payment for Personal Income Tax Garnishment — $2,600.

[ED. NOTE: Formulas referenced are available from the agency.]

Stat. Auth.: ORS 305.100

Stats. Implemented: ORS 23.185

Hist.: RD 5-1993, f. 12-30-93, cert. ef. 12-31-93; RD 7-1994, f. 12-15-94, cert. ef. 12-30-94; REV 7-1998, f. 11-13-98 cert. ef. 12-31-98; Renumbered from 150-23.185 by REV 8-2002, f. & cert. ef. 12-31-02; Renumbered from 150-23.186, REV 11-2004, f. 12-29-04, cert. ef. 12-31-04; REV 4-2011, f. 12-30-11, cert. ef. 1-1-12

150-18.385-(A)

Oregon Department of Revenue Other Agency Account Garnishments

(1) Under ORS 293.250, the Department of Revenue may render assistance to recover delinquent debts owed to any state officer, board, commission, corporation, institution, department or other state organization assigned by the agency to the Department of Revenue for collection, including actions to continuously garnish up to 25 percent of an employee’s disposable earnings.

(2) Under ORS 18.385(4), nonexempt disposable earnings are reduced by an order to withhold child or spousal support under ORS 25.378, 419B.408 or 419C.600 or ORS Chapter 110. The maximum disposable earnings subject to garnishment for the period is determined by 18.385(2)(a) through 18.385(2)(e) minus any amount required to be withheld from an individual’s disposable earnings for the period pursuant to an order to withhold child or spousal support issued under 25.378 and others. The order to withhold child or spousal support may reduce the amount available for garnishment to zero.

(3) Under ORS 18.385(2)(a) through 18.385(2)(e) the nonexempt disposable earnings subject to garnishment for the period is calculated by reducing the individual’s disposable earnings for that period by the amount of disposable earnings exempt from garnishment. The amount of disposable earnings exempt from garnishment is the greater of 75 percent of the disposable earnings for the period under ORS 18.385(1) or the minimum exemption amount under ORS 18.385(2)(a) through 18.385(2)(e).

Example 1: Dick has $1,000 per week of disposable earnings. Dick owes child support totaling $15,000. An order to withhold for child or spousal support under ORS 25.378 has been issued to Dick’s employer directing the employer to withhold a specified amount of $225 from Dick’s disposable earnings. Dick also owes a state agency for a delinquent student loan totaling $5,000 (a state non-tax debt). The Department of Revenue has garnished Dick’s employer for 25 percent of disposable earnings. The employer would calculate and pay the order to withhold for child or spousal support and the garnishment as follows:

(A) Disposable earnings A — $1,000.

(B) Minimum weekly exemption B — $218.

(C) 75 percent of disposable earnings C — $750.

(D) Earnings exempt from garnishment (greater of B or C) D — $750.

(F) Nonexempt earnings subject to garnishment (A minus D) E — $250.

(E) Order to withhold specified amount of $225 for child or spousal support F — $225.

(G) Disposable earnings subject to garnishment (E minus F) G — $25.

Although the Department of Revenue has issued a 25 percent garnishment that would normally return $250, because of the order to withhold for child or spousal support, the amount available on the state non-tax debt garnishment is limited to $25.

Example 2: Assume the same facts as in Example 1 except that the order to withhold child or spousal support is $350. The employer would calculate the order to withhold child or spousal support and garnishment as follows:

(A) Disposable earnings A — $1,000.

(B) Minimum weekly exemption B — $218.

(C) 75 percent of disposable earnings C — $750.

(D) Earnings exempt from garnishment (greater of B or C) D — $750.

(E) Nonexempt earnings subject to garnishment (A minus D) E — $250.

(F) Order to withhold specified amount of $350 for child or spousal support F — $350.

(G) Disposable earnings subject to garnishment (E minus F) G   — $100.

Since line (F) is greater than line (E), resulting in a negative number for line (G), the amount available for the garnishment is zero.

Example 3: John has $250 per week disposable earnings. John owes a state agency for a delinquent student loan totaling $5,000 (a state non-tax debt). The Department of Revenue has garnished John’s employer for 25 percent of disposable earnings. John is not under an order to withhold for child or spousal support. The employer would calculate and pay the garnishment as follows:

(A) Disposable earnings A — $250.

(B) Minimum weekly exemption B — $218.

(C) 75 percent of disposable earnings C — $187.50.

(D) Earnings exempt from garnishment (greater of B or C) D — 218.

(E) Nonexempt earnings subject to garnishment (A minus D) E — $32.

(F) Order to withhold for child or spousal support F — $0.

(G) Disposable earnings subject to garnishment (E minus F) G — $32.

[ED. NOTE: Calculations referenced are available from the agency.]

Stat. Auth.: ORS 305.100

Stats. Implemented: ORS 23.185

Hist.: REV 7-1998, f. 11-13-98 cert. ef. 12-31-98; Renumbered from 150-23.185-(A) by REV 8-2002, f. & cert. ef. 12-31-02; Renumbered from 150-23.186-(A), REV 11-2004, f. 12-29-04, cert. ef. 12-31-04; REV 11-2007, f. 12-28-07, cert. ef. 1-1-08; REV 4-2011, f. 12-30-11, cert. ef. 1-1-12

150-267.380(2)

Wages Exempt From Transit Payroll Tax

For purposes of the transit district payroll taxes, certain payrolls are exempted from taxation by exclusion of the amounts paid from the definition of wages. The following are clarifications of some of the allowable exemptions:

(1) All foreign insurance companies (those formed under laws from other states), their adjusters, agents, office support staff are specifically exempted by ORS 731.840. This exemption does not extend to domestic insurers, health care contractors, and motorist service clubs.

(2) ORS 267.380(2)(h) states if remuneration is not subject to withholding under ORS Chapter 316 it is not subject to the transit payroll tax. All wages paid for domestic service described in 316.162(c) are exempt from withholding and transit payroll tax. If the remuneration is not subject to withholding under ORS Chapter 316 such wages would be exempt from the transit payroll tax but generally are subject to transit self-employment tax. Unless a real estate agent meets all the requirements of 316.209, the remuneration for services performed by that agent will be subject to transit payroll taxes.

(3) ORS 267.380(4), which subjects deferred compensation to transit tax, creates an exception to the general rule stated in 267 .380(2)(h), which exempts from transit tax remuneration not subject to withholding tax.

(4) The exemption in ORS 267 .380(2)(c) applies to labor not in the course of the employer’s trade or business. The exemption does not apply to wages for substantial labor not in the regular course of the employer’s trade or business, such as the construction of a private home where the owner is the employer.

(5) Transit payroll tax is imposed only on that portion of the payroll paid with respect to duties performed by employees within the District. If an employee performs services both inside and outside the District, the employer shall prorate the wages paid to that particular employee based upon the relative amounts of time worked by that employee within and without the District.

(6) The exemption in ORS 267 .380(2)(e) applies solely to seasonal labor in connection with the planting, cultivating or harvesting of agricultural crops. Transit payroll tax applies to the entire wages of “regular” farm employees even though, as a part of their duties, they engage in planting, cultivating or harvesting.

(7) Certain state agencies are exempt from transit payroll tax under the provisions of ORS 267 .430.

(8) Internal Revenue Code Section 501(c)(3) institutions (charitable and other nonprofit institutions) other than hospitals are exempt from transit payroll taxes. For the purposes of ORS 267 .380(2)(a), a hospital is defined as:

(a) A permanent facility or organization with facilities that include inpatient beds, and with medical services, including physician services and continuous nursing services under the supervision of registered nurses, to provide diagnosis and medical or surgical treatment primarily for but not limited to acutely ill patients and accident victims, or to provide treatment for the mentally ill.

(b) A hospital’s parent or subsidiary 501(c)(3) organization that provides administrative and support functions to the hospital.

(9) Employers may be relieved of the duty to pay transit tax where it can be shown to the satisfaction of the department that subject wages paid to each individual employee will be $300 or less in a calendar year.

Stat. Auth.: ORS 305.100

Stats. Implemented: ORS 267.380

Hist.: RD 10-1984, f. 12-5-84, cert. ef. 12-31-84; RD 8-1990, f. 12-20-90, cert. ef. 12-31-90; RD 7-1992, f. & cert. ef. 12-29-92; RD 5-1993, f. 12-30-93, cert. ef. 12-31-93; REV 4-2011, f. 12-30-11, cert. ef. 1-1-12

150-294.435(1)-(A)

Property Taxes Certified

(1) The amount or rate of any property tax proposed to be certified by a municipal corporation which is subject to Local Budget Law cannot exceed the amount or rate approved by the budget committee. The budget committee must approve the amount or the rate of each tax to be lawfully certified to the assessor. Any portion of the certified tax exceeding the amount or the rate approved by the budget committee that was not included in a budget summary republished as required by ORS 294.435(1)(c) will not be extended by the assessor on the assessment roll except as provided in 294.437.

(2) The budget committee of a municipal corporation which is subject to Local Budget Law that adopts a biennial budget must approve the total amount or the rate of each tax to be certified each year. Taxes must be certified in each year of the budget period. Any portion of the certified tax exceeding the amount or the rate approved by the budget committee for either year of the budget period that was not included in a republished budget summary will not be extended by the assessor on the assessment roll except as provided in ORS 294.437.

(3) The budget document must include a complete detail of proposed expenditures requiring levy of property taxes.

Stat. Auth.: ORS 305.100 & 294.495

Stats. Implemented: ORS 294.435

Hist.: 2-69; TC 10-1978, f. 12-5-78, cert. ef. 12-31-78, Renumbered from 150-294.435; REV 4-1998, f. & cert. ef. 6-30-98; REV 2-2002, f. 6-26-02, cert. ef. 6-30-02; REV 17-2008, f. 12-26-08, cert. ef. 1-1-09; REV 4-2011, f. 12-30-11, cert. ef. 1-1-12

150-294.435(1)-(C)

Publishing of Amended Budget Document

When publishing an amended budget document, the governing body must include the following information using the same publishing procedures as the original summary described under ORS 294.421:

(1) The date, time, and place of the hearing on the amended budget.

(2) The place and times the amended budget document is available for inspection.

(3) A financial summary of the total budget described in ORS 294.416, as amended by the governing body.

(4) A reference to the date and publication that the budget as approved by the budget committee was originally published. For example: “To review the budget as approved by the budget committee prior to this amendment, see page 5 in the May 1, 2003, edition of the Beach Bugle.”

Stat. Auth.: ORS 305.100 & 294.495

Stats. Implemented: ORS 294.435

Hist.: REV 6-2003, f. & cert. ef. 12-31-03; REV 4-2011, f. 12-30-11, cert. ef. 1-1-12

1150-294.480

Supplemental Budget Procedures

(1) During the fiscal year or budget period, the governing body may find that an unanticipated condition requires adjustments to the budget. If the condition meets the requirements of ORS 294.480, the governing body may prepare a supplemental budget.

(2) A supplemental budget may only authorize additional expenditures during the current fiscal year or budget period. It must not authorize expenditures for a past or future fiscal year or budget period.

(3) A supplemental budget that is being prepared to create or increase an appropriation must be adopted before any expenditures are made in excess of the current annual budget appropriations.

(4) Only one supplemental budget may be prepared as a result of a single situation or condition that meets the requirements of ORS 294.480.

(5) When the estimated expenditures in the supplemental budget differ by less than 10 percent or less from the expenditures of the adopted annual or biennial budget for each fund being adjusted, the governing body may adopt the supplemental budget at one of its regular meetings. Fund expenditures do not include unappropriated ending fund balance, amounts reserved for future expenditure, interfund transfers, or contingency amounts.

(a) Notice of the regular meeting at which the supplemental budget will be adopted must be published by one of the methods in ORS 294,311(35) not less than 5 days before the meeting. The notice must include a statement that a supplemental budget will be considered at the meeting.

(b) The resolution adopting and appropriating the supplemental budget may take place at the same regular meeting.

(6) When a new fund is being established or when the estimated expenditures in the supplemental budget differ by more than 10 percent from the expenditures in the budget as most recently amended prior to the supplemental budget, the governing body must publish notice and hold a public hearing before adopting the supplemental budget. The notice of the hearing must include for each fund being adjusted by more than 10 percent: the name of the fund; and the new total for each resource line item or appropriation category being changed, added or deleted.

Example: (This example is of the published summary of a supplemental budget. in which the new total expenditure in the Utility Fund differs by more than 10 percent from the amount currently budgeted.)

The supplemental budget transfers $20,000 in resources and appropriation authority from the General Fund to the Utility Fund Materials and Services, increasing that appropriation and the total expenditure in the Utility Fund to a new total of $40,000.

[ED. NOTE: Tables referenced are available from the agency.]

Stat. Auth.: ORS 305.100

Stats. Implemented: ORS 294.480

Hist.: TC 10-1978, f. 12-5-78, cert. ef. 12-31-78; RD 1-1992, f. 5-28-92, cert. ef. 6-1-92; REV 4-1998, f. & cert. ef. 6-30-98; REV 8-2000, f. & cert. ef. 8-2-00; REV 2-2002, f. 6-26-02, cert. ef. 6-30-02; REV 5-2009, f. & cert. ef. 7-31-09; REV 4-2011, f. 12-30-11, cert. ef. 1-1-12

150-294.525-(A)

“Reserved for Future Expenditure” Requirement

(1) “Reserved for future expenditure” means a budget requirement which is not intended to be expended during the fiscal year or budget period in which it is budgeted. This requirement shows the amount a municipal corporation plans to “save” for future financing of a service, project, property or equipment which the municipal corporation is authorized to perform, construct or acquire.

(2) An amount reserved for future expenditure may be appropriated during the fiscal year or budget period if the situation meets the conditions for a supplemental budget outlined in ORS 294.480(1) or as otherwise authorized by law.

Stat. Auth.: ORS 305.100

Stats. Implemented: ORS 294.525

Hist.: REV 4-1999, f. 12-1-99, cert. ef. 12-31-99, Renumbered from 150-280.100(A); REV 2-2002, f. 6-26-02, cert. ef. 6-30-02; REV 4-2011, f. 12-30-11, cert. ef. 1-1-12

150-307.250

Defining “Surviving Spouse” of a Veteran

(1) “Surviving spouse” of a veteran means:

(a) A man or woman who is legally married to a veteran at the time of the veteran’s death; or

(b) A man or woman who is joined in a registered domestic partnership with a veteran at the time of the veteran’s death. “Domestic partnership” has the meaning given that term as defined in ORS 106.310, and the partnership must meet the provisions of ORS 106.300 to ORS 106.340, also known as the Oregon Family Fairness Act (OFFA).

(2) “Surviving spouse remaining unmarried of a veteran” means the individual does not enter into a new marriage or registered domestic partnership following the death of the veteran.

(3) The exemption applies only to the period before the date of the first new marriage or registered domestic partnership of the surviving spouse after the death of the veteran.

(4) If a surviving spouse of a veteran enters into a new marriage or registered domestic partnership following the death of the veteran and that marriage or partnership is annulled by a court having jurisdiction to do so, the surviving spouse will be restored to his or her previous status as a surviving spouse remaining unmarried of a veteran.

Stat. Auth.: ORS 305.100

Stats. Implemented: ORS 307.250

Hist.: RD 1-1995, f. 12-29-95, cert. ef. 12-31-95; REV 8-1998, f. 11-13-98, cert. ef. 12-31-98, Renumbered from 150-307.250(1)(d); REV 5-2009, f. & cert. ef. 7-31-09; Renumbered from 150-307.250(1)(c) by REV 4-2011, f, 12-30-11, cert. ef. 1-1-12

150-308.290-(B)

Industrial Property Returns — Incomplete Returns and Late Filing Penalties

(1) Industrial Property Returns are combined returns of real and personal property for principal and secondary industrial property. The Industrial Property Return forms and instructions specify the information to be included in the return and submitted to the department.

(2) A taxpayer must submit a substantially complete return by the due date of the return. A return is substantially complete if it contains sufficient information to allow the return to be processed by the department. A return is not substantially complete if:

(a) It is submitted with blank or missing schedules unless the schedules are appropriately left blank and are labeled with an identifying notation such as “no”, “none”, or “not applicable”; or

(b) It is submitted with attachments that do not include required information as specified on the schedule.

(3) For the purposes of the late filing penalty imposed by ORS 308.295, a return that is not substantially complete will not be considered “filed”.

(4) If a taxpayer submits a return that is not substantially complete, the department will send the return back to the taxpayer with a request that the return be filed with the required information. The taxpayer will be subject to a late filing penalty under ORS 308.295 if a substantially complete Industrial Property Return is not filed by the due date or within the time allowed by an extension as described in OAR 308.290(A).

Stat. Auth.: ORS 305.100

Stats. Implemented: ORS 308.290

Hist.: REV 4-1998, f. & cert. ef. 6-30-98; REV 2-2002, f. 6-26-02, cert. ef 6-30-02; REV 10-2002, f. & cert. ef. 12-31-02; Renumbered from 150-308.290(4)(b) by REV 4-2011, f. 12-30-11, cert. ef. 1-1-12

150-311.216

Property Subject to Assessment as Omitted Property

(1) Omitted property includes any real or personal property, or part thereof, that has been omitted from the certified assessment and tax roll for any reason. Omitted property may include, but is not limited to, a separate freestanding structure or improvement, an addition that increases the square footage of a structure or improvement, a remodel which increases a structure’s real market value, or real or personal property machinery and equipment.

(2) Property may be added to the roll under ORS 311.216 if:(a) Omitted due to the assessor’s lack of knowledge of its existence,

(b) Improvements are added to or made a part of a property after that property has been physically appraised, and are later discovered by the assessor,

(c) Improvements have been included in error on another account,

(d) Omitted from a return filed pursuant to ORS 308.290, including understatement of costs for new property or improvements to property, or

(e) Omitted for any other reason.

(3) Improvements which are in existence and are an integral part of property which is physically appraised may not later be revalued and added as omitted property under ORS 311.216. Undervaluation of a property due to the assessor’s failure to consider a portion of the property is not omitted property correctable under 311.216.

(4) When omitted property is discovered and its contribution to an account’s value is added under ORS 311.216, the value of the previously existing portion of the account cannot be adjusted.

Example 1: Two years after a reappraisal, a homesite is developed, and a new single family residence is constructed. The new construction and the site development are discovered on the next physical appraisal. The assessor adds the value of the single family residence and the site development as omitted property under ORS 311.216.

Example 2: “A” owns a parcel of land with a cabin on it. “A” divides the parcel and sells part to “B”, but retains the part with the cabin. The assessor incorrectly places the value of the cabin on “B’s” account. When the error is discovered, “B’s” value can be corrected under ORS 311.205, and “A’s” account must be corrected under ORS 311.216 as omitted property.

Example 3: During a physical appraisal the assessor adds no value contribution for a reinforced concrete floor, and a manger with steel stanchions in a loft barn. The assessor later realizes that the loft barn is undervalued. The reinforced concrete floor and manger with steel stanchions may not be added as omitted property under ORS 311.

Stat. Auth.: ORS 305.100

Stats. Implemented: ORS 311.216

Hist.: RD 6-1986, f. & cert. ef. 12-31-86; RD 8-1991, f. 12-30-91, cert. ef. 12-31-91; RD 6-1994, f. 12-15-94, cert. ef. 12-30-94; REV 8-1998, f. 11-13-98, cert. ef. 12-31-98, Renumbered from 150-311.207; REV 4-2011, f. 12-30-11, cert. ef. 1-1-12

50-314.280-(F)

Apportionment Factors

Property factor. Unless otherwise provided by rule, the provisions of ORS 314.655 and the rules pertaining thereto, are by this reference incorporated herein and made a part of this OAR 150-314.280-(F). Payroll factor. Unless otherwise provided by rule, the provisions of ORS 314.660 and the rules pertaining thereto, are by this reference incorporated herein and made a part of this 150-314.280-(F). Sales factor. Unless otherwise provided by rule, the provisions of ORS 314.665 and the rules pertaining thereto, are by this reference incorporated herein and made a part of this OAR 150-314.280

Stat. Auth.: ORS 305.100

Stats. Implemented: ORS 314.280

Hist.: 1-65; 1-70; 12-19-75; REV 4-2011, f. 12-30-11, cert. ef. 1-1-12

150-314.360

Information Returns

(1) In general, taxpayers are not required to file information returns as described in ORS 314.360 except as provided in this rule.

(2) Information returns are required to be filed electronically with the department as set forth in section (4) of this rule and using federal due dates. For purposes of this rule, information returns required to be filed electronically include:

(a) 1099-MISC Miscellaneous Income;

(b) 1099-G Certain Government Payments;

(c) 1099-R Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, etc.

(d) W2-G Certain Gambling Winnings.

(3) For information regarding the reporting requirements of salaries and wages, see ORS 316.202 and related rules.

(4) Information returns listed in section (2) of this rule, where the recipient, winner, or the payer has an Oregon address must be filed electronically as follows:

(a) For payers that issue 250 or more of any one type of information return, electronic filing begins with 2011 forms due in 2012.

(b) For payers that issue 100 or more but less than 250 of any one type of information return, electronic filing begins with 2012 forms due in 2013.

(c) For payers that issue more than 10 but less than 100 of any one type of information return, electronic filing begins with 2013 forms due in 2014.

(5) The department may grant an exception to this filing requirement in section (4) upon a showing of undue hardship. Undue hardship is based on the facts and circumstances specific to each payer and determined on a case-by-case basis.

(6) In addition to any other filing requirement in this rule, the department may require the filing of any type of information return as it deems necessary. If requested under this section, an information return must be provided within 30 days of the date of our written request to be considered timely under ORS 305.217.

Stat. Auth.: ORS 305.100 & 314.360

Stats. Implemented: ORS 314.360

Hist.: 1958-59; 12-70; 12-19-75; RD 10-1986, f. & cert. ef. 12-31-86; RD 15-1987, f. 12-10-87, cert. ef. 12-31-87; RD 11-1988, f. 12-19-88, cert. ef. 12-31-88, Renumbered to 150-314.360?; RD 7-1989, f. 12-18-89, cert. ef. 12-31-89; RD 12-1990, f. 12-20-90, cert. ef. 12-31-90; RD 7-1993, f. 12-30-93, cert. ef. 12-31-93; RD 5-1994, f. 12-15-94, cert. ef. 12-31-94; REV 8-2010, f. 7-23-10, cert. ef. 7-31-10; REV 4-2011, f. 12-30-11, cert. ef. 1-1-12

150-314.HB2071(A)

Requirement to File Returns Electronically (Corporation E-file Mandate)

(1) All corporations required to electronically file their federal corporation tax return are required to electronically file their Oregon corporation tax return.

(2) Waivers.

(a) A waiver of the electronic filing requirement granted by the Internal Revenue Service (IRS) will be accepted by the department as a waiver to the mandate under section (1). The corporation must notify the department in writing when such a waiver is granted in accordance with the department’s instructions.

(b) In addition to a waiver allowed under subsection (a), the department may grant a waiver of the mandate in section (1) if the following conditions are met:

(A) The corporation requests a waiver in accordance with the department’s instructions; and

(B) The corporation’s facts and circumstances are such that complying with the mandate would cause the corporation an undue financial hardship. The corporation’s refusal to purchase or use the requisite software or computer equipment does not, in and of itself, satisfy the conditions for a waiver under this subsection.

(c) When circumstances warrant, the department may issue an administrative waiver of the mandate in section (1) when the department determines it is necessary to promote the effective and efficient administration of the tax system.

(3) If an electronic tax return cannot be accepted for processing electronically, the corporation must contact the department for assistance in correcting the rejected return errors. If the rejected return errors cannot be corrected, the corporation must receive authorization from the department prior to filing a paper return.

(4) This rule is applicable to corporation tax returns filed for tax years beginning on or after January 1, 2011.

Stat. Auth.: ORS 305.100 & 2011 OL Ch. 24 (HB 2071)

Stats. Implemented: 2011 OL Ch. 24 (HB 2071)

Hist.: REV 4-2011, f. 12-30-11, cert. ef. 1-1-12

150-314.HB 2071(B)

Requirement to File Returns Electronically

(1) All paid tax preparers filing Oregon personal income tax returns in this state are required to file them by electronic means if the paid tax preparer is required to do so by federal law. See 26 USC § 6011 and Treasury Regulation §301.6011-7 for the federal mandate and relevant definitions.

(2) Waivers.

(a) A waiver granted by the Internal Revenue Service (IRS) pursuant to Treasury Regulation § 301.6011-7(c)(1) or (2) will be accepted by the department as a waiver to the mandate under section (1). The paid preparer must notify the department in writing when such a waiver is granted in accordance with the department’s instructions.

(b) In addition to a waiver allowed under subsection (a), the department may grant a waiver of the mandate in section (1) if the following conditions are met:

(A) The paid preparer requests a waiver in advance of the preparation of personal income tax returns subject to the mandate in accordance with the department’s instructions; and

(B) The paid preparer’s facts and circumstances are such that complying with the mandate would cause the paid preparer an undue financial hardship. The paid preparer’s refusal to purchase or use the requisite software or computer equipment does not, in and of itself, satisfy the conditions for a waiver under this subsection.

(c) When circumstances warrant, the department may issue an administrative waiver of the mandate in section (1) to a paid preparer or group of paid preparers when the department determines it is necessary to promote the effective and efficient administration of the tax system.

(3) This rule is effective January 1, 2012 and applies to tax returns filed on or after that date.

NOTE: The publication(s) referred to or incorporated by reference in this rule is available from the Department of Revenue pursuant to ORS 183.360(2) and ORS 183.355(1)(b).

Stat. Auth.: ORS 305.100 & 2011 OL Ch. 24 (HB 2071)

Stats. Implemented: 2011 OL Ch. 24 (HB 2071)

Hist.: REV 4-2011, f. 12-30-11, cert. ef. 1-1-12

150-315.326

Tax Credit Auctions

(1) Definitions.

(a) “Tax Credits” means the credits authorized by Chapter 730, Section 23, Oregon Laws 2011 (HB 3672). These credits may also be referred to as the “Renewable Energy Development Contribution Credit(s).”

(b) “Qualified Bid” means a bid that is eligible to participate in the tax credit auction because:

(A) It is submitted in a manner and time prescribed by the department’s instructions and this rule;

(B) It is submitted for no less than 95 percent of the tax credit value or $950 per tax credit increment;

(C) An associated payment is received by the department in the time and manner prescribed in section (4).

(c) “Non-qualified Bid” means a bid that is not eligible to participate in the auction because it does not meet the requirements of subsection (b).

(d) “Invalid or Insufficient Payments” are payments that are:

(A) Not received by the department by 5:00 p.m. (PT) on the date for payment set by the department;

(B) In a form other than one listed in section (4) of this rule;

(C) Fraudulent or otherwise not able to be immediately banked by the department;

(D) Less than the full amount of the corresponding bid received by the department; or

(E) Not submitted in a manner consistent with department’s instructions (including attaching the required completed forms).

(e) “PT” means Pacific Time (Daylight or Standard as dictated by the time of year).

(2) Auction Bidding Period. The tax credits auction bidding period is no less than seven days, not to exceed 14 days; with specific dates as announced by the department.

(3) Tax Credit Certificates. 1,500 increments of $1,000 tax credit certificates ($1,500,000 total) will be available for bidding at the auction. The Oregon Department of Energy will issue tax credit certificates for the prevailing qualified bids. A taxpayer to whom a certificate is issued may claim a credit in the amount shown on the certificate against Oregon personal income or corporate income or excise tax otherwise due for that tax year. The tax credit may not exceed the liability of the taxpayer in any one year. Any credit amount unused by the taxpayer may be carried forward to offset tax liabilities in the next three succeeding tax years. No transfer of the certificate (or the credit that it represents) is allowed.

(4) Determination of Qualifying Bids and Payments.

(a) Bids must be submitted on-line in a manner consistent with the department’s instructions and within the bidding period as outlined in section (2). Bids received before or after the bidding period will be considered a non-qualified bid. The department will determine the order of bids received by the electronic date and time stamp.

(b) A bidder may submit multiple separate bids.

(c) After a bid is submitted, a bidder must send, and the department must receive, a payment for the total amount bid. Invalid or insufficient payments will be returned to the bidder and the associated bid considered a non-qualified. All bid payments must be received by the department no later than 5:00 p.m. (PT) on the payment date. The department will date stamp payments when they are received. The department will not consider postmarks when determining if the payment has been timely received. It is the bidder’s responsibility to ensure that the department receives the payment by the deadline. The method of payment is limited to the following:

(A) Bank-issued certified check;

(B) Bank-issued cashier’s check; or

(C) Money Order.

(d) All payments will be held until the outcome of the auction is determined. As soon as practicable, the department will return payments received to bidders that do not prevail at the auction. No interest will be paid on payments.

(e) A bid, once submitted, is not revocable and may not be changed. A payment will only be returned if a bid does not result in the issuance of a tax credit certificate.

(5) Determination of the Prevailing Bid(s). After the payment deadline has passed, the department will determine the prevailing bids by placing the qualifying bids in order from highest bid amount to lowest bid amount. The department will allot up to 1,500 tax credit increments of $1,000 each to the highest qualifying bids in order from highest bid to lowest bid. In the event that two or more qualifying bids have identical bid amounts for the last tax credit increment (or increments) available, the prevailing qualifying bid will be the one the department received first as determined under section (4).

Example: Four bidders (A, B, C and D) make qualifying bids on $10,000 worth of tax credits (sold in ten increments of $1,000). Bidder A bids $950 for each of four increments on October 24. Bidder B bids $965 for each of four increments on October 26. Bidder C bids $985 for each of three increments and $965 for each of two increments on November 1. Bidder D bids $990 for each of five increments on November 4. The department will place the bids in the following order:

Bid Amount/Increment — Date Received — Bidder — Number of Increments Bid

$990 — 11/04 — D — 5

$985 — 11/01 — C — 3

$965 — 10/26 — B — 4

$965 — 11/01 — C — 2

$950 — 10/24 — A — 4

The results of the auction are as follows:

5 of the 10 increments go to D.

3 of the 10 increments go to C (for the $985 bid).

2 of the 10 increments go to B (for the $965 bid).

NOTE 1: B only received two of the four increments he bid on because no more increments were available. The department will return the payment to B for the amount of the two non-prevailing bids.

NOTE 2: The bid C placed at $965 did not prevail because it tied with the bid B submitted. B’s bid will prevail over C’s bid in the event of a tie because it was received before C’s bid. C’s payment for the $965 bid will be returned.

NOTE 3: A’s bid was not high enough to prevail. A’s bid payment will be returned.

Stat. Auth.: ORS 305.100

Stats. Implemented: 315.326

Hist.: REV 4-2011, f. 12-30-11, cert. ef. 1-1-12

150-317.710(5)(b)

Different Apportionment Factors

(1) An Oregon taxpayer that is permitted or required to use different apportionment factors under Oregon law cannot be included in an Oregon consolidated return with another Oregon taxpayer using the standard apportionment factor provided in ORS 314.650. This restriction only applies when both corporations using different apportionment factors are subject to Oregon tax under ORS Chapters 317 or 318. The only corporations that are permitted or required to use different apportionment factors are:

(a) Insurers required to apportion income as provided in ORS 317.660; and

(b) Taxpayers primarily engaged in utilities or telecommunications that elect to have income from business activity apportioned by applying the weightings used in ORS 314.650 (1999 Edition) for tax years beginning on or after May 1, 2003.

(2) Corporations other than those listed in subsections 1(a) and 1(b) of this rule use specific applications of the standard apportionment factor provided in ORS 314.650. The factors for each corporation in the unitary group of a consolidated Oregon return are computed as provided in:

(a) ORS 314.650 to 314.665 and the rule thereunder for corporations not described in subsections (b) through (l) of this section;

(b) ORS 314.682 through 314.686 and the rules thereunder for interstate broadcasters;

(c) OAR 150-314.280-(G) for carriers of freight or passengers in general;

(d) OAR 150-314.280-(H) for railroads;

(e) OAR 150-314.280-(I) for airlines;

(f) OAR 150-314.280-(J) for trucking companies;

(g) OAR 150-314.280-(K) for companies engaged in sea transportation service;

(h) OAR 150-314.280-(L) for companies involved in interstate river transportation service;

(i) OAR 150-314.280-(N) for financial organizations;

(j) OAR 150-314.615-(F) for long-term construction contractors;

(k) OAR 150-314.670-(A) for publishers; or

(l) OAR 150-314.615-(h) for movie and television production companies.

Stat. Auth.: ORS 305.100

Stats. Implemented: ORS 317.710

Hist.: RD 12-1985, f. 12-16-85, cert. ef. 12-31-85; RD 11-1988, f. 12-19-88, cert. ef. 12-31-88; REV 7-1998, f. 11-13-98, cert. ef. 12-31-98; REV 5-2006, f. & cert. ef. 7-31-06; REV 4-2011, f. 12-30-11, cert. ef. 1-1-12

 

Rule Caption: Suspending the temporary rule as this rule was filed for permanent status.

Adm. Order No.: REV 5-2011(Temp)

Filed with Sec. of State: 12-30-2011

Certified to be Effective: 1-1-12 thru 3-11-12

Notice Publication Date:

Rules Suspended: 150-315.HB3672

Subject: This temporary rule gave guidance to taxpayers wanting to purchase renewable energy tax credits. It set the requirements for submission of a qualified bid in the credit auction.

Rules Coordinator: Ken Ross—(503) 945-8890

150-315.HB 3672

Tax Credit Auctions

(1) Definitions.

(a) “Tax Credits” means the credits authorized by Chapter 730, Section 23, Oregon Laws 2011 (HB 3672). These credits may also be referred to as the “Renewable Energy Development Contribution Credit(s).”

(b) “Qualified Bid” means a bid that is eligible to participate in the tax credit auction because:

(A) It is submitted in a manner and time prescribed by the department’s instructions and this rule;

(B) It is submitted for no less than 95 percent of the tax credit value or $950 per tax credit increment;

(C) An associated payment is received by the department in the time and manner prescribed in section (4).

(c) “Non-qualified Bid” means a bid that is not eligible to participate in the auction because it does not meet the requirements of subsection (b).

(d) “Invalid or Insufficient Payments” are payments that are:

(A) Not received by the department by 5:00 p.m. (PT) on the date for payment set by the department;

(B) In a form other than one listed in section (4) of this rule;

(C) Fraudulent or otherwise not able to be immediately banked by the department;

(D) Less than the full amount of the corresponding bid received by the department; or

(E) Not submitted in a manner consistent with department’s instructions (including attaching the required completed forms).

(d) “PT” means Pacific Time (Daylight or Standard as dictated by the time of year).

(2) Auction Bidding Period. The tax credits auction bidding period is no less than seven days, not to exceed 14 days; with specific dates as announced by the department.

(3) Tax Credit Certificates. 1,500 increments of $1,000 tax credit certificates ($1,500,000 total) will be available for bidding at the auction. The Oregon Department of Energy will issue tax credit certificates for the prevailing qualified bids. A taxpayer to whom a certificate is issued may claim a credit in the amount shown on the certificate against Oregon personal income or corporate income or excise tax otherwise due for that tax year. The tax credit may not exceed the liability of the taxpayer in any one year. Any credit amount unused by the taxpayer may be carried forward to offset tax liabilities in the next three succeeding tax years. No transfer of the certificate (or the credit that it represents) is allowed.

(4) Determination of Qualifying Bids and Payments.

(a) Bids must be submitted on-line in a manner consistent with the department’s instructions and within the bidding period as outlined in section (2). Bids received before or after the bidding period will be considered a non-qualified bid. The department will determine the order of bids received by the electronic date and time stamp.

(b) A bidder may submit multiple separate bids.

(c) After a bid is submitted, a bidder must send, and the department must receive, a payment for the total amount bid. Invalid or insufficient payments will be returned to the bidder and the associated bid considered a non-qualified. All bid payments must be received by the department no later than 5:00 p.m. (PT) on the payment date. The department will date stamp payments when they are received. The department will not consider postmarks when determining if the payment has been timely received. It is the bidder’s responsibility to ensure that the department receives the payment by the deadline. The method of payment is limited to the following:

(A) Bank-issued certified check;

(B) Bank-issued cashier’s check; or

(C) Money Order.

(d) All payments will be held until the outcome of the auction is determined. As soon as practicable, the department will return payments received to bidders that do not prevail at the auction. No interest will be paid on payments.

(e) A bid, once submitted, is not revocable and may not be changed. A payment will only be returned if a bid does not result in the issuance of a tax credit certificate.

(5) Determination of the Prevailing Bid(s). After the payment deadline has passed, the department will determine the prevailing bids by placing the qualifying bids in order from highest bid amount to lowest bid amount. The department will allot up to 1,500 tax credit increments of $1,000 each to the highest qualifying bids in order from highest bid to lowest bid. In the event that two or more qualifying bids have identical bid amounts for the last tax credit increment (or increments) available, the prevailing qualifying bid will be the one the department received first as determined under section (4).

Example: Four bidders (A, B, C and D) make qualifying bids on $10,000 worth of tax credits (sold in ten increments of $1,000). Bidder A bids $950 for each of four increments on October 24, 2011. Bidder B bids $965 for each of four increments on October 26, 2011. Bidder C bids $985 for each of three increments and $965 for each of two increments on November 1, 2011. Bidder D bids $990 for each of five increments on November 4, 2011. Table not included. See Ed. Note.

[ED. NOTE: Tables & Bids referenced are available from the agency.]

Stat. Auth.: ORS 305.100

Stats. Implemented: Ch 730, § 23, OL 2011(HB 3672)

Hist.: REV 2-2011(Temp), f. & cert. ef. 10-12-11 thru 3-11-12; REV 3-2011(Temp), f. 7 cert. ef. 11-29-11 thru 3-11-12; Suspended by REV 5-2011(Temp), f. 12-30-11, cert. ef. 1-1-12 thru 3-11-12

Notes
1.) This online version of the OREGON BULLETIN is provided for convenience of reference and enhanced access. The official, record copy of this publication is contained in the original Administrative Orders and Rulemaking Notices filed with the Secretary of State, Archives Division. Discrepancies, if any, are satisfied in favor of the original versions. Use the OAR Revision Cumulative Index found in the Oregon Bulletin to access a numerical list of rulemaking actions after November 15, 2011.

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