ORS 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 (Annual certification of facility), 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 (Annual certification of facility).

(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 (Definitions for ORS 285C.500 to 285C.506).

(b)

“Certified facility” means a facility, as defined in ORS 285C.500 (Definitions for ORS 285C.500 to 285C.506), for which an annual certification under ORS 285C.506 (Annual certification of facility) has been issued. [2001 c.944 §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)


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May. 15, 2020