OAR 150-314-0520
Pass-through Entity Withholding Requirements


(1)

Withholding requirement. A pass-through entity with Oregon-source distributive income and one or more nonresident owners that have no other Oregon-source income, is required to withhold tax on behalf of the owner unless that owner makes an election as described in OAR 150-314-0515 (Oregon Composite Tax Return) or meets an exception described in 150-314-0525 (Exceptions to Pass-through Entity Withholding Requirements). “Tax payment” or “owner payment” means pass-through entity withholding, which is an estimated tax payment sent on behalf of the owner. The entity must withhold tax as follows:

(a)

For nonelecting owners subject to tax under ORS Chapter 316 (Personal Income Tax), each owner’s share of estimated Oregon-source distributive income for the taxable year multiplied by the highest percent in 316.037 (Imposition and rate of tax); and

(b)

For nonelecting owners subject to tax under ORS Chapter 317 (Corporation Excise Tax) or 318, each owner’s share of estimated Oregon-source distributive income for the taxable year multiplied by the rates in 317.061 (Tax rate).

(2)

Information retention requirement. The pass-through entity must retain in its records the information listed in this section and submit it to the Department of Revenue on request:

(a)

Calculation of the amount required to be withheld pursuant to this rule;

(b)

Whether payments were submitted in addition to the quarterly withholding tax amounts required to be remitted under section (4) of this rule; and

(c)

A detailed summary of the nonelecting owner’s share of the aggregate withholding tax payments made by the pass-through entity for the taxable year and the nonelecting owner’s share of the aggregate additional withholding tax liability paid. See the annual report requirement in section (5) of this rule.

(3)

Information reporting to owner requirement. The pass-through entity, by the due date of its information return, must provide each applicable nonelecting owner with an information statement containing the owner’s share of the entity’s withholding tax payments to be claimed as estimated tax payments on the owner’s tax return.

(4)

Periodic remittance requirement.

(a)

The entity must remit amounts required to be withheld to the department on a quarterly basis using a method approved by the department. The quarterly withholding tax remittance amounts are generally the sum of:

(A)

The highest marginal tax rate for the end of the entity’s tax year in ORS 316.037 (Imposition and rate of tax) multiplied by the sum of the noncorporate nonelecting owner’s estimated share of the entity’s Oregon-source distributive income and then multiplied by 25 percent; and

(B)

The applicable rate in ORS 317.061 (Tax rate) multiplied by the sum of the corporate nonelecting owner’s estimated share of the entity’s Oregon-source distributive income and then multiplied by 25 percent.

(b)

The due dates of these required payments are the 15th day of the 4th, 6th, 9th, and 12th month of the entity’s tax year. Due dates are moved to the next business day when they occur on a weekend or legal holiday. Exception: Fiscal year entities whose owners are all noncorporate taxpayers using a calendar tax year can elect to use the due dates for the owners’ calendar tax year instead. This is the 15th day of the 4th, 6th, and 9th month of the tax year and the 1st month of the succeeding tax year for the calendar year containing the entity’s fiscal year end.
Example 1: Mountain LLC uses a fiscal tax year ending April 30th. Its fiscal year 2013 is from May 1, 2013 to April 30, 2014. Using its tax year, the quarterly payments are due August 15th, 2013; October 15th, 2013; January 15, 2014; and April 15, 2014. Since all of the owners of Mountain LLC are individuals using a calendar tax year, the LLC can opt to use the due dates for the owners’ tax year instead. Because those owners report this income on their 2014 calendar year return, those due dates are: April 15, 2014; June 16, 2014; September 15, 2014; and January 15, 2015.

(5)

Annual report requirement. For estimated tax payments due on or after January 1, 2013, the entity will submit an annual report. The report is due the last day of the second month following the close of the entity’s tax year. The report will have the following information for each owner included in the pass-through entity withholding payments: owner’s name, owner’s federal tax identification number, owner’s mailing address, owner’s share of each payment made on the owner’s behalf, and any additional information requested by the department in the filing instructions. The department may request other information as needed. The owners will not receive credit for payments made on their behalf until the annual report has been filed by the entity.
Example 2: ABC Partners, an Oregon partnership, has 2 nonresident owners who each own 25 percent of the partnership. One is an individual, Rachel, and one is a corporation, Eli & Alexandria Inc. (E&A). Because neither elects to join in filing a composite return and neither has filed an affidavit, ABC must withhold Oregon tax. ABC Partners estimates its Oregon-source distributive income for 2013 will be $1,500,000. For 2013, the entity will calculate the tax payment for each period based on the nonresident owners’ share of 25 percent of $1,500,000 and the appropriate tax rate. Rachel’s pass-through entity withholding is 9.9 percent (the highest marginal tax rate for 2013) multiplied by $375,000 multiplied by 25 percent. This is $9,281 (rounded) for each period. E&A’s pass-through entity withholding is 6.6 percent multiplied by $375,000 multiplied by 25 percent. This is $6,188 (rounded) for each period. ABC Partners will add together the amounts estimated for all owners and send in one payment each period of $15,469. ABC Partners will submit these payments using its tax year. Since ABC Partners uses a calendar tax year, the due dates for each payment for tax year 2013 are April 15, June 17, September 16, 2013 and January 15, 2014. If ABC Partners was a fiscal year taxpayer, then it would submit pass-through entity owner payments by the estimated tax payment due dates for that fiscal tax year instead. At the end of its tax year, ABC Partners will submit an annual report. Since it has no changes to account for, it will show $9,281 of each quarterly payment belongs to Rachel and $6,188 of each quarterly payment belongs to E&A Inc.
[Publications: Publications referenced are available from the agency.]

Source: Rule 150-314-0520 — Pass-through Entity Withholding Requirements, https://secure.­sos.­state.­or.­us/oard/view.­action?ruleNumber=150-314-0520.

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 150-314-0520’s source at or​.us