Personal Income Tax

ORS 316.131
Credit allowed to nonresident for taxes paid to state of residence

  • exception


(1)

A nonresident shall be allowed a credit against the taxes otherwise due under this chapter for income taxes imposed by and paid to the state of residence (not including any preference, alternative or minimum tax) on income taxable under this chapter, subject to the following conditions:

(a)

The credit shall be allowed only if the state of residence either:

(A)

Does not tax the income of residents of this state derived from sources within that state; or

(B)

Allows residents of this state a credit against income taxes imposed by that state on income for tax paid or payable under this chapter.

(b)

The credit may not be allowed for taxes paid to a state that allows its residents a credit against the taxes imposed by that state for income tax paid or payable under this chapter irrespective of whether its residents are allowed a credit against the taxes imposed by this chapter for income taxes paid to that state.

(c)

Credit shall be allowed only for the proportion of the taxes paid to the state of residence (not including preference, alternative or minimum taxes) as the adjusted gross income taxable under this chapter and also subject to taxes in the state of residence bears to the entire adjusted gross income upon which the taxes paid to the state of residence are imposed.

(d)

The credit may not exceed the proportion of the tax payable under this chapter that the modified adjusted gross income subject to tax in the state of residence and also taxable under this chapter bears to the entire modified adjusted gross income of the taxpayer.

(2)

For purposes of this section, the amount of income taxes paid to another state includes the taxpayer’s pro rata share of any taxes on, or according to, or measured by, income or profits paid or accrued that were paid by an S corporation.

(3)

Notwithstanding subsection (1) of this section, credit may not be allowed under this section for taxes paid by a nonresident on qualifying compensation.

(4)

As used in this section:

(a)

“Modified adjusted gross income” means federal adjusted gross income as modified by this chapter and the other laws of this state applicable to personal income taxation.

(b)

“Qualifying compensation” has the meaning given that term in section 1, chapter 559, Oregon Laws 2005.

(c)

“State” means a state, district, territory or possession of the United States. [1991 c.838 §5; 2001 c.9 §2; 2005 c.559 §6]
Chapter 316

Notes of Decisions

Unless the divorce decree specifically designates that payments are for child support, payments will be treated as alimony. Henderson v. Dept. of Rev., 5 OTR 153 (1972)

The goal of this chapter is to incorporate all of the provisions of the federal Internal Revenue Code; taxable income should be adjusted whenever the result of the adjustment is to give effect to the policies or principles of the federal Internal Revenue Code, even though no express authority for the adjustment is present in the statutes. Christian v. Dept. of Rev., 269 Or 469, 526 P2d 538 (1974); Smith v. Dept. of Rev., 270 Or 456, 528 P2d 73 (1974)

By its enactment of this chapter, the legislature intended to adopt §172 of the federal Internal Revenue Code allowing for the carryback and carryforward of net operating losses. Christian v. Dept. of Rev., 269 Or 469, 526 P2d 538 (1974)

Where plaintiff failed to appeal timely as required by this section, appeal rights were not preserved so that cause could be considered on merits. Dela Rosa v. Dept. of Rev., 11 OTR 201 (1989), aff'd 313 Or 284, 832 P2d 1228 (1992)

Where taxpayers paid foreign income taxes on foreign income and claimed foreign taxes paid as federal tax credit and as state business expense deduction, taxpayers who claim federal foreign tax credit are entitled only to foreign tax deduction provided in ORS 316.690. Whipple v. Dept. of Rev., 309 Or 422, 788 P2d 994 (1990)

For purposes of claim preclusion, all issues regarding taxpayer's income tax liability for tax year constitute same claim. U.S. Bancorp v. Dept. of Revenue, 15 OTR 13 (1999)

Atty. Gen. Opinions

Political contributions as credit against Oregon tax return, (1974) Vol 37, p 159

Law Review Citations

57 OLR 309 (1978); 16 WLR 373 (1979)


Source

Last accessed
Jun. 26, 2021