ORS 657.505
Payment of and liability for taxes
- rules
(1)
On and after January 1, 1936, taxes shall be payable by each employer then subject to this chapter. Taxes shall become payable by any other employer on and after the date on which the employer becomes subject to this chapter.(2)
An employer shall be liable for taxes on all wages paid for services performed on or after the first day of a calendar quarter.(3)
Taxes of an employer shall not become payable until this chapter has been approved by the Secretary of Labor, and notice of such approval has been given to the Governor as provided in section 3304 of the Federal Unemployment Tax Act.(4)
All taxes shall be paid to and collected by the Director of the Employment Department at such times and in such manner as the director may prescribe and upon collection, shall be deposited in the Unemployment Compensation Trust Fund.(5)
In lieu of taxes required of all other employers subject to this chapter, the state shall pay into the fund an amount equivalent to the amount of all regular benefits and all extended benefits paid out to claimants who during the applicable base year were paid wages by the state. Payments required under this section shall be payable from the General Fund of the state, except that if a claimant was paid wages by the state during the base year from a special or administrative fund provided for by law, the payment into the fund shall be made from such special or administrative fund with the approval of the Oregon Department of Administrative Services.(6)
Any political subdivision subject to this chapter shall, in lieu of taxes required of other employers subject to this chapter, pay into the fund an amount equivalent to the amount of all regular benefits and all extended benefits paid out to claimants who during the applicable base year were paid wages by the political subdivision.(7)
Intentionally left blank —Ed.(a)
Any nonprofit employing unit or any Indian tribe subject to or electing coverage under this chapter shall pay taxes under the provisions of ORS 657.475 (Where a number of the same workers are normally employed by several employers) and 657.480 (Effect of transfer of trade or business). However:(A)
Such nonprofit employing unit may elect to make reimbursement payments into the Unemployment Compensation Trust Fund in an amount equivalent to the amount of regular benefits and one-half of extended benefits paid out to claimants who during the applicable base period were paid wages by such nonprofit employing unit. Such reimbursement payments shall be deemed to be taxes for all purposes of this chapter.(B)
Such Indian tribe may elect to make reimbursement payments into the Unemployment Compensation Trust Fund in an amount equivalent to the amount of regular benefits and all extended benefits paid out to claimants who during the applicable base period were paid wages by the Indian tribe. Such reimbursement payments shall be deemed to be taxes for all purposes of this chapter.(b)
A nonprofit employing unit or an Indian tribe may elect to make reimbursement payments by filing with the director a written notice to this effect within the 30-day period following the close of the calendar quarter in which the nonprofit employing unit or Indian tribe became an employer, or may make a timely election within 30 days after the director finds the nonprofit employing unit or Indian tribe in default with respect to payment of taxes if the director has not found the default to be due to an intent to postpone or avoid either payment of taxes due the Unemployment Compensation Trust Fund or the election to make reimbursement payments pursuant to this paragraph. A nonprofit employing unit or an Indian tribe failing to submit a timely notice of election of reimbursement shall be liable for taxes on any wages paid for services performed for such nonprofit employing unit or Indian tribe for two calendar years. Such nonprofit employing unit or Indian tribe will remain liable for taxes for any calendar year thereafter unless a written notice of election of reimbursement is filed with the director by January 31 of such calendar year. The director shall for good cause extend the period within which a notice of election of reimbursement must be filed for an additional 30 days.(c)
Elections of reimbursement shall continue until canceled but shall be for a period of not less than two calendar years. Any nonprofit employing unit or Indian tribe may cancel such election, and pay taxes as any other employer, by filing with the director a written notice of its intention to cancel such election by January 31 of the year in which the cancellation is to be effective. The director may for good cause extend the period within which a notice of cancellation may be filed for an additional 30 days. Once a cancellation is effective the nonprofit employing unit or Indian tribe must pay taxes for two calendar years before it is again eligible for election of reimbursement. An employer whose election of reimbursement has been canceled shall thereafter be liable for taxes at the rate assigned an employer in accordance with ORS 657.435 (Base rate for first year) until such employer is eligible for a rate based on the experience of the employer in accordance with the provisions of ORS 657.475 (Where a number of the same workers are normally employed by several employers) and 657.480 (Effect of transfer of trade or business).(d)
Each nonprofit employing unit that elects to reimburse the fund shall, within 30 days after the effective date of its election, either execute and file with the director a surety bond or deposit with the director money, an irrevocable letter of credit issued by an insured institution as defined in ORS 706.008 (Additional definitions for Bank Act) or other security as approved by the director. The amount of the bond or deposit shall be two percent of the nonprofit employing unit’s total wages paid for employment covered by this chapter for the four calendar quarters immediately preceding the effective date of the election. If the nonprofit employing unit did not pay wages in each of such four calendar quarters, the amount of the bond or deposit shall be as determined by the director. The amount of the bond or deposit shall not exceed the amount of taxes the nonprofit employing unit would have been assessed at the maximum tax rate for the same period had not the nonprofit employing unit elected to make reimbursement payments. However, no surety bond or deposit shall be required of an institution of higher education, unless in the discretion of the director the director determines that a surety bond or deposit shall be required of such an institution.(A)
Any bond or letter of credit deposited under this paragraph shall be in force for a period of not less than two calendar years and shall be renewed with the approval of the director, at such times as the director may prescribe, but not less frequently than at two year intervals as long as the nonprofit employing unit continues to be liable for reimbursement payments. The director shall require adjustments to be made in a previously filed bond or letter of credit as the director deems appropriate. If the bond or letter of credit is to be increased, the bond or letter of credit shall be filed by the nonprofit employing unit within 30 days of the date notice of the required adjustment was mailed or otherwise delivered to it. Failure by any nonprofit employing unit covered by such bond or letter of credit to pay the full amount of reimbursements when due, together with any applicable interest and penalties, shall render the surety liable on said bond or the issuer liable on the letter of credit to the extent of the amount thereof including interest and penalties assessed pursuant to this chapter.(B)
Any deposit of money or security in accordance with this paragraph shall be retained by the director. Money shall be deposited in the Employment Tax Guarantee Fund. When liability under the election is terminated the deposit shall be returned to the nonprofit employing unit, less any deductions as hereinafter provided. The director may transfer moneys from the Employment Tax Guarantee Fund or sell securities deposited as necessary to satisfy any due and unpaid reimbursements and any applicable interest and penalties. The director shall require the nonprofit employing unit within 30 days following transfer of a money deposit or sale of securities to deposit sufficient additional money or securities to restore the original deposit in full. The director may, at any time, review the adequacy of the deposit made by any nonprofit employing unit. If, as a result of such review, the director determines that an adjustment is necessary, the director shall require the nonprofit employing unit to make an additional deposit within 30 days of written notice of the determination or shall return to it such portion of the deposit as the director no longer considers necessary, whichever action is appropriate.(C)
If any nonprofit employing unit fails to file a bond or make a deposit, or to file a bond in an increased amount or to increase or make whole the amount of a previously made deposit, as provided in this section, the director may terminate such nonprofit employing unit’s election to make reimbursement payments. The director may extend for good cause the applicable filing, deposit or adjustment period by not more than 30 days. A nonprofit employing unit having its election terminated under this section shall pay taxes for a period of two calendar years before it is again eligible for election to reimburse.(8)
Intentionally left blank —Ed.(a)
At the end of each calendar quarter, or at the end of any other period as prescribed by the director, the director shall determine the amount of payments in lieu of taxes or reimbursement payments required, under subsections (5), (6) and (7) of this section, and shall bill each employer for such amount. If a claimant during a base year was employed by an employer liable for payments in lieu of taxes or reimbursement payments and other employers subject to the tax rate provisions of this chapter, the amount to be paid into the fund by employers liable for payments in lieu of taxes or reimbursement payments shall be an amount that is in the same proportion that the wages paid by each employer to the individual during the base year bear to the wages paid by all employers to that individual during that year.(b)
In determining the amount of payments in lieu of taxes or reimbursement payments, benefits paid for any reason shall be included if such benefits or any portion thereof were paid as a result of wages earned in the employ of an employer required to make reimbursing payments or payments in lieu of taxes. Such benefits paid include but are not limited to payments made as a result of a determination or payments erroneously or incorrectly paid or paid as a result of a determination of eligibility that is subsequently reversed. Any benefit payments described in this paragraph that are subsequently recovered by the Employment Department will be credited on a pro rata basis to the account of the employer that reimbursed the fund for such benefits.(c)
Payment of any bill rendered under paragraph (a) of this subsection shall be made not later than the last day of the month immediately following the month in which such bill was mailed to the last-known address of the employer or was otherwise delivered to it. The director may assess a nonprofit employing unit or an Indian tribe for past due taxes and such assessment shall be subject to the same interest, penalties, enforcement, appeal and any other provisions of this chapter that apply to taxes assessed pursuant to ORS 657.681 (Computation and assessment of employer contributions and interest).(d)
If a nonprofit employing unit is delinquent in making reimbursement payments as required under this section, the director may terminate the nonprofit employing unit’s election and the nonprofit employing unit must pay taxes for two calendar years before it is again eligible for election of reimbursement. Any employer whose election is terminated under provisions of this subsection shall remain liable for reimbursement payments for any benefits paid based on wages received prior to the effective date of termination of the election.(e)
Intentionally left blank —Ed.(A)
If an Indian tribe fails to make reimbursement payments as required under this section, including assessments of interest and penalties, within 90 days of receipt of the delinquency or bill, the director shall terminate the Indian tribe’s election and the Indian tribe must pay taxes for two calendar years before it is again eligible for election of reimbursement. Any employer whose election is terminated under the provisions of this subsection remains liable for reimbursement payments for any benefits paid based on wages received before the effective date of termination of the election.(B)
Services performed for an Indian tribe may not be treated as employment for purposes of this chapter if, after all collection activities considered necessary by the director have been exhausted, the Indian tribe or any unit of the Indian tribe fails to make required payments, including contributions, reimbursement payments and assessments of interest and penalties.(C)
Services performed for an Indian tribe that has lost coverage under subparagraph (B) of this paragraph may be treated as employment for purposes of this chapter if the Indian tribe makes all required payments, including contributions, reimbursement payments and assessments of interest and penalties.(D)
For purposes of this section, an Indian tribe and any units of the Indian tribe that separately elect coverage are jointly and severally liable for all required payments, including contributions, reimbursement payments and assessments of interest and penalties.(E)
The director shall notify the United States Internal Revenue Service and the United States Department of Labor if an Indian tribe fails to make payments required under this section, including assessments of interest and penalties, within 90 days of receipt of a final notice of assessment.(9)
Notwithstanding the provisions of subsections (5), (6), (7) and (8) of this section, each employing unit that is required to make payments in lieu of taxes or has elected to make reimbursement payments may request permission to make advance or budget payments in accordance with rules adopted by the director.(10)
Two or more employers that have become liable for payments in lieu of taxes or reimbursement payments, in accordance with the provisions of subsections (5), (6) and (7) of this section, may file a joint application to the director for the establishment of a group account for the purpose of sharing the cost of benefits paid that are attributable to service in the employ of such employers. Each application shall identify and authorize a group representative to act as the group’s agent for the purpose of this subsection. Upon the approval of the director of the application, the director shall establish a group account for such employers effective as of the beginning of the calendar quarter in which the director receives the application and shall notify the group’s agent of the effective date of the account. Such account shall remain in effect for not less than two years and thereafter until terminated at the discretion of the director or upon application by the group. Upon establishment of the account, each member of the group shall be liable for payments with respect to each calendar quarter in the amount that bears the same ratio to the total benefits paid in such quarter that are attributable to service performed in the employ of all members of the group. The director shall prescribe such rules as the director deems necessary with respect to application for establishment, maintenance and termination of group accounts. This subsection shall not be construed to make such agent the employer of such workers, or relieve any employer of the obligations of the employer to comply with the terms of this chapter, except to the extent that such obligations are discharged by such agent as provided thereunder. [Amended by 1957 c.682 §6; 1971 c.463 §18; 1973 c.118 §2; 1977 c.446 §7; 1989 c.329 §4; 1989 c.609 §3; 1991 c.67 §161; 1991 c.331 §96; 1997 c.631 §516; 2001 c.572 §12; 2003 c.401 §1; 2005 c.218 §15]
Source:
Section 657.505 — Payment of and liability for taxes; rules, https://www.oregonlegislature.gov/bills_laws/ors/ors657.html.
Notes of Decisions
Corporation and person acting solely as corporate director are not in employer-employee relationship. Necanicum Investment Co. v. Employment Department, 345 Or 138, 190 P3d 368 (2008)
Attorney General Opinions
School districts expenditure of funds set aside for potential unemployment insurance liability for operating the district, (1976) Vol 38, p 304
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