OAR 150-314-0195
Delinquency Penalty

(1)

Although ORS 314.400 (Penalty for failure to file report or return or to pay tax when due)(1) refers to a delinquency penalty for (A) failure to file a report or return by the due date or (B) failure to pay a tax due by the due date, only one five-percent penalty is added, even though there is a failure as to both requirements.
Example 1: Joe did not obtain an extension to file his tax return, which was due on April 15. On July 1, he filed the return and paid $2,000 of tax plus interest of $40. Joe will be charged a penalty of $100 ($2,000 x 5 percent).

(2)

Intentionally left blank —Ed.

(a)

The delinquency penalty is based on the tax required to be shown on the return, reduced by credits claimed on the return and by any amount of the tax that is paid on or before the due date for payment. If the department determines that the tax shown on the return is greater than the tax required to be shown, the lesser amount is used to determine the penalty.
Example 2: Jeanette filed her tax return on time. The tax shown on the return was $800. Jeanette claimed credits of $150, withholding of $150, and showed a balance due of $500. She did not pay the $500 with the filing of the return. The department determined in processing the return that the tax required to be shown on the return was $600. The delinquency penalty of $15 is based on five percent of $300 ($600 tax required to be shown on the return, less credits of $150 and withholding of $150).

(b)

The 20-percent penalty is in addition to the five-percent penalty. A 20-percent penalty is charged when:

(A)

A tax return that is required to be filed annually or for a one-year period is not filed within three months of the due date (determined with regard to any extension of time to file granted to the taxpayer); or

(B)

A tax return that is required to be filed more frequently than annually is not filed within one month of the due date (determined with regard to extensions).
Example 3: Pierre did not request an extension to file his return, which was due on April 15. He filed the return on November 1, showing tax of $900, credits of $300, and withholding of $200. Pierre sent a check for the balance due of $400 with the tax return. A total penalty of $100 will be charged; $20 for failure to pay the tax when due ($400 x 5 percent), and $80 for failing to file the return within three months of the due date ($400 x 20 percent).
Example 4: Same facts as Example 3, except Pierre received an extension to file until October 15. Pierre will be charged a five-percent penalty for failure to pay the tax when due. The 20-percent penalty for failure to file the return will not be charged because Pierre filed the return within three months of the extended due date.
Example 5: French Bakery did not file its Oregon Quarterly Tax Report for 1st quarter 2008 withholding, which was due on April 30, 2008. It filed the return on July 1, 2008, showing tax of $800 and prepayments of $500. French Bakery sent a check for the balance due of $300 with the tax return. A total penalty of $75 will be charged; $15 for failure to pay the tax when due ($300 x five percent), and $60 for failing to file the return within one month of the due date ($300 x 20 percent).

(c)

If a taxpayer is required to file a federal income tax return for a period of less than 12 months under section 443 of the Internal Revenue Code, the Oregon personal income or corporate excise or income tax return required to be filed for that period is considered an annual filing thus subject to the additional 20-percent penalty.

(d)

If a return or report is required to be filed on a one-time basis such as with inheritance returns, the return or report is considered an annual filing thus subject to the 20-percent penalty.

(e)

If a taxpayer fails to file a return and the department must determine and assess the amount of tax, the penalties are based on the tax required to be shown on the return. The tax required to be shown on the return is reduced by any credits that may be lawfully claimed on the return and by any amount of the tax that is paid on or before the due date for payment.
Example 6: Isabelle filed her 2005 tax return on July 1, 2007. The tax shown on the return was $800 and Isabelle claimed credits of $300 and withholding of $400. She paid the balance due of $100 when she filed the return. Isabelle will be charged a five-percent failure-to-pay penalty, plus a 20 percent penalty for filing the return more than three months after the due date. The total penalty of $25 is based on $100 ($800 tax shown on the return less credits of $300 and withholding of $400).
Example 7: Same facts as Example 6, except that Isabelle did not file her 2005 tax return after being requested to do so by the department. The department determined that the tax required to be shown on the return was $900, allowable credits were $150 and withholding was $400. The penalty will be based on $350.

(3)

Exceptions to the penalty for failure to pay tax when due, pursuant to the authority provided by 305.229 (When penalties not imposed).

(a)

Payment of 90 percent of the tax determined, after withholdings and credits are subtracted from the tax otherwise due, as shown on the return. Income and excise tax returns filed within the period of an extension granted are not considered delinquent with regard to the time of filing. However, an extension of time to file a return does not extend the time for paying the tax. Thus, if the tax is not paid by the original due date of the return, a delinquency penalty of five percent is added to the total unpaid tax unless the taxpayer has met all of the following conditions:

(A)

Filed for a federal automatic extension of time to file or filed for a separate Oregon extension, in accordance with current Oregon tax return instructions;

(B)

At least 90 percent of the tax after credits as shown on the return was paid on or before the original due date of the return;

(C)

The taxpayer’s return is filed timely within the extension period;

(D)

The balance of the tax as shown on the return is paid when the return is filed and any interest due is either paid when the return is filed or within 30 days of billing by the department.
Example 8: Henry filed an extension request with Oregon on April 15, along with a payment of $600. He filed his tax return on October 15. The tax shown on the return was $1,200 and Henry claimed total tax credits on the return of $200. Henry paid the balance due of $400 with the return. A five-percent penalty would be charged on the $400 paid on October 15 because Henry did not pay at least $900 (90 percent of the tax shown on the return {$1200}, less withholdings and credits {$200} or 90% of {$1200-$200}, which is $900), on or before the original due date of the return. Interest on the unpaid balance would be due from April 16 to October 15.
Example 9: Jan was granted an extension to file her federal tax return until October 15. She filed her Oregon return on June 14. The tax shown on the return was $2,500 and she had made estimated tax payments totaling $2,300. Jan paid the $200 tax due with the return. The five-percent penalty will not be charged on the $200 paid on June 14 if interest from April 16 to June 14 accompanies the $200 payment or if Jan pays the interest due on the unpaid balance of $200 within 30 days of billing by the department.

(b)

Amended tax returns. If a taxpayer (individual or corporate) files an amended income or excise tax return accompanied by less than full payment of tax and interest, the department must send a billing notice indicating the amount of tax plus accrued interest to be paid. If the taxpayer pays the full amount of tax plus interest within 30 days of the date on the billing notice, the five-percent penalty for failure to pay the tax with the amended return will not apply.
Example 10: ABC Corporation filed an amended income tax return showing a balance of tax due of $1,000. A payment of $1,000 was submitted with the return. The $1,000 payment is first applied to interest that has accrued from the original due date of the return. The department determines that $200 of interest has accrued on the $1,000 of additional tax. Because the corporation has underpaid the tax by $200, ($1,000 payment less $200 applied to interest equals $800 of tax paid with the return), a five-percent penalty applies to the $200 of tax due. However, if ABC Corporation pays the $200 of tax plus any additional interest within 30 days of the date on the billing notice, the five-percent penalty will not apply.

(c)

Deficiencies. If the department issues a Notice of Deficiency and the taxpayer pays the full amount of tax plus interest within 30 days of the date on the Notice of Deficiency, the five-percent penalty for failure to pay the tax required to be shown on the return will not apply. If the taxpayer pays only a portion of the tax plus interest, the five-percent penalty for failure to pay the tax required to be shown on the return will apply only to the unpaid portion of the tax.
Example 11: Hanna filed her original return timely but the department issued a Notice of Deficiency for $500 plus $75 interest. Hanna paid $300 within 30 days of the Notice of Deficiency. The five-percent penalty will apply to the unpaid deficiency ($$575 deficiency plus interest - $300 payment = $275 unpaid deficiency) because she did not pay the deficiency plus interest in full within 30 days of the Notice of Deficiency.

(d)

Differences in the amount of prepaid tax. If a taxpayer (individual or corporate) files an income tax return or an excise tax return and the taxpayer overstates the amount of tax that was paid on or before the due date, the department must send a billing notice indicating the amount of additional tax and interest due. If the taxpayer pays the full amount of tax plus interest within 30 days of the date on the billing notice, the five-percent penalty for failure to pay the tax by the due date does not apply.
Example 12: Maria filed her individual income tax return on April 15. The tax shown on the return was $1,300. She claimed credits of $300 and state income tax withholding of $600. The $400 balance of tax due as shown on the return was paid with the return. During processing of the return, the correct amount of state income tax withholding is determined to be $350. Because Maria did not pay $250 of tax by the due date, a five-percent penalty applies. If Maria pays the additional tax due of $250 plus any additional interest within 30 days of the date on the department’s notice, the five-percent penalty will not be charged.
Example 13: Same facts as Example 12, except Maria did not pay the $400 balance due when she filed the return. A penalty of $20 ($400 x 5 percent) is charged for failure to pay the $400 of tax when due. The $250 of additional tax resulting from the error in the amount of withholding will not have a five-percent penalty added if Maria pays the $250 of tax plus additional interest within 30 days of the department’s notice.

(4)

The penalties provided under ORS 305.265 (Deficiency notice)(13) and 314.400 (Penalty for failure to file report or return or to pay tax when due)(6) are not combined. Only one 100 percent penalty may be assessed on a particular report or return.

Source: Rule 150-314-0195 — Delinquency Penalty, https://secure.­sos.­state.­or.­us/oard/view.­action?ruleNumber=150-314-0195.

150–314–0005
Period of Computation of Taxable Income 150–314–0010
Mitigation of Effect of Limitations and Other Provisions 150–314–0012
Determination by Agreement 150–314–0025
Pollution Control Facilities: Revocation of Certificate 150–314–0027
Pollution Control Facilities: Facilities Not Eligible for Tax Credit 150–314–0035
Formula for Apportionment of Lobbying Expenses Subject to Proxy Tax 150–314–0040
Withholding on Real Property Conveyances 150–314–0045
REMIC Filing Requirements 150–314–0047
REMIC Income Taxable to Nonresidents 150–314–0055
Change in Methods of Accounting or Reporting 150–314–0060
Election to Use Alternative Apportionment Weightings by Taxpayers Engaged in Utilities or Telecommunications 150–314–0062
Apportionment and Allocation of Income of Financial Organizations and Public Utilities from Business Activities Within and Without Oregon 150–314–0064
Definitions 150–314–0066
Apportionment and Allocation of Income Generally 150–314–0068
Allocation of Income 150–314–0070
Apportionment Factors Generally 150–314–0072
Apportionment Factors 150–314–0074
Modified Factors for Carriers of Freight or Passengers: General Rule 150–314–0076
Modified Factors for Carriers of Freight or Passengers: Special Rules — Railroads 150–314–0078
Modified Factors for Carriers of Freight or Passengers: Special Rules — Airlines 150–314–0080
Modified Factors for Carriers of Freight or Passengers: Special Rules — Trucking Companies 150–314–0082
Modified Factors for Companies Engaged in Sea Transportation Service 150–314–0084
Modified Factors for Companies Involved in Interstate River Transportation Service 150–314–0086
Other Methods: Limited Application 150–314–0088
Modified Factors for Financial Institutions 150–314–0090
Public Utilities: Sale of Commodities 150–314–0100
Disallowance of Certain Intercompany Transactions Involving Intangible Assets 150–314–0105
Farm Income Averaging 150–314–0110
Allocation of Oregon Modifications to Passive Activity Losses 150–314–0115
Interest on Deferred Oregon Tax Liability with Respect to Installment Obligations 150–314–0120
Reduction of Tax Attributes after Discharge of Debt 150–314–0125
Listed Transaction Reporting Requirement 150–314–0130
Definition: Final Determination 150–314–0135
Returns When Accounting Period Changed 150–314–0140
Information Returns 150–314–0142
Brokers’ Information Returns 150–314–0150
Requirement to File Returns Electronically (Corporation E-file Mandate) 150–314–0152
Requirement to File Returns Electronically 150–314–0160
Report of Changes in Federal Taxable Income 150–314–0165
Filing Returns of Income: Due date 150–314–0167
Filing Returns of Income: Extensions, Chapters 316, 317 and 318 150–314–0169
Standards for Substitute Tax Forms 150–314–0171
Alternative Filing Methods 150–314–0173
Time Limitations Affected by Military Service 150–314–0175
Time Limitations for Persons Outside United States 150–314–0185
Payment of Tax 150–314–0187
Responsibility for Tax Payments 150–314–0195
Delinquency Penalty 150–314–0197
Failure to File Penalty 150–314–0199
Interest on Deficiencies and Delinquencies 150–314–0205
Substantial Understatement Penalty (SUP) 150–314–0207
Waiver of 20 Percent Substantial Understatement of Net Tax Penalty Imposed under ORS 314.402 150–314–0209
Substantial Authority, Adequate Disclosure and Reasonable Basis 150–314–0215
Listed Transaction Understatement 150–314–0220
Additional Assessments 150–314–0222
Five-Year Statute of Limitations 150–314–0224
Time Limit to Make Adjustment 150–314–0226
Notification of Gain Realized Upon the Sale or Exchange of a Principal Residence 150–314–0228
Extension of Period for Assessment 150–314–0230
Effect of Federal Extension of Period for Assessment 150–314–0240
Refunds Generally 150–314–0242
Refunds 150–314–0244
Minimum Offset Amount 150–314–0246
Interest Computation — Offset 150–314–0248
Refund Offset Priority 150–314–0250
Refunds 150–314–0252
Effect of Federal Extension of Period for Assessment 150–314–0254
Separate Refunds When a Joint Return Has Been Filed 150–314–0256
Refunds of Tax Overpayments to Spouse or Heirs 150–314–0265
Model Recordkeeping and Retention 150–314–0267
Requirement to Provide Copies of Documents 150–314–0275
Definition: Collection Charge 150–314–0277
Payment Secured by Bond, Deposit or Otherwise 150–314–0279
Statute of Limitation on Tax Collection 150–314–0285
Assessment of Withholding Tax Against Liable Officers 150–314–0290
Estimated Tax: When Estimates Are Required 150–314–0292
Estimated Tax: When Estimates Are Required For Tax Exempt Corporations 150–314–0294
Estimated Tax: Affiliated Corporations 150–314–0300
Estimated Tax: Due Dates of Payments for Short-Period Returns 150–314–0302
Estimated Tax: Application of Payments 150–314–0310
Requirement to Use Electronic Funds Transfer 150–314–0315
Corporation Estimated Tax: Delinquent or Underestimated Payment or Both, Constitutes Underpayment 150–314–0317
Estimated Tax: Consolidated Return Underpayments 150–314–0319
Estimated Tax: Apportioned Returns 150–314–0321
Estimated Tax: Application of Net Loss, Annualized Income Exception 150–314–0323
Estimated Tax: Interest on Underpayment 150–314–0325
Estimated Tax: Computation of Underpayment 150–314–0327
Underpayment of Estimated Tax 150–314–0335
Apportionable and Nonapportionable Income Defined 150–314–0337
Apportionable and Nonapportionable Income 150–314–0339
Proration of Deductions 150–314–0345
Apportionment and Allocation of Income Generally 150–314–0347
Application of ORS 314.610 to 314.667: Allocation 150–314–0349
Apportionment and Allocation for a Taxpayer Carrying on a Unitary Business 150–314–0351
Two or More Businesses of a Single Taxpayer 150–314–0353
Apportionment for Long-Term Construction Contracts 150–314–0355
Special Rules: Installment Sales 150–314–0357
Modified Factors for Motion Picture and Television Film Producers 150–314–0365
Taxable in Another State 150–314–0367
Taxable in Another State 150–314–0369
Taxable in Another State 150–314–0371
Taxable in Another State 150–314–0380
Allocation of Interest and Dividends 150–314–0385
Apportionment Formula 150–314–0390
Property Factor 150–314–0392
Property Factor 150–314–0394
Property Factor 150–314–0396
Property Factor 150–314–0398
Property Factor 150–314–0400
Property Factor 150–314–0402
Property Factor 150–314–0404
Property Factor 150–314–0406
Property Factor 150–314–0415
Payroll Factor 150–314–0417
Payroll Factor 150–314–0425
Sales Factor 150–314–0427
Sales Factor 150–314–0429
Sales Factor 150–314–0431
Sales Factor 150–314–0435
Sales Factor 150–314–0437
Gross Receipts Related to Deferred Gain or Loss 150–314–0455
Modified Factors for Publishing 150–314–0460
Apportionment of Net Loss 150–314–0465
Sales Factor for Interstate Broadcasters 150–314–0470
Interstate Broadcasters: Net Income Attributable to this State 150–314–0475
Consistent Treatment of Partnership Items 150–314–0480
Publicly Traded Partnerships Taxed as Corporations 150–314–0485
Partnership Information Returns 150–314–0487
Partnership Penalty 150–314–0495
Corporation Tax Credits — Converting a C Corporation to an S Corporation 150–314–0497
Corporation Tax Credits — Converting an S Corporation to a C Corporation 150–314–0510
Definitions for Composite Tax Returns and Pass-through Entity Withholding 150–314–0515
Oregon Composite Tax Return 150–314–0520
Pass-through Entity Withholding Requirements 150–314–0525
Exceptions to Pass-through Entity Withholding Requirements 150–314–0530
Divulging Particulars of Returns and Reports Prohibited 150–314–0535
Information That May Be Furnished 150–314–0540
Rewards for Information 150–314–0545
Combat Zone Benefits 150–314–0733
Partnership Pays Election After Federal Centralized Partnership Audit Adjustments
Last Updated

Jun. 8, 2021

Rule 150-314-0195’s source at or​.us