74th OREGON LEGISLATIVE ASSEMBLY--2007 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 1346-1
House Bill 3030
Sponsored by Representative BRUUN
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
Reduces rate of tax imposed on capital gains of personal income
and corporate income and excise taxpayers. Phases in reduction.
Applies to tax years beginning on or after January 1, 2008, for
personal income taxpayers and January 1, 2010, for corporate
income and excise taxpayers.
Makes conforming changes to implement constitutional amendment
repealing corporate surplus 'kicker' proposed in ___ Joint
Resolution ___ (2007) (LC 1346).
Does not take effect unless constitutional amendment proposed
in ___ Joint Resolution ___ (2007) (LC 1346) is approved by
people at next primary election. Takes effect on effective date
of proposed constitutional amendment.
A BILL FOR AN ACT
Relating to taxation; creating new provisions; amending ORS
291.349, 291.351, 305.792, 316.037, 316.122, 317.061 and
318.020; repealing ORS 316.045 and 317.063; and prescribing an
effective date.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + (1) For the tax year of the taxpayer beginning
on or after January 1, 2008, and before January 1, 2009,
notwithstanding ORS 316.037 (1), any gain that is treated as net
capital gain for federal tax purposes and that is included in
taxable income in this state shall be taxed at the lesser of the
rate applicable under ORS 316.037 (1) or 8.5 percent.
(2) For the tax year of the taxpayer beginning on or after
January 1, 2009, and before January 1, 2010, notwithstanding ORS
316.037 (1), any gain that is treated as net capital gain for
federal tax purposes and that is included in taxable income in
this state shall be taxed at the lesser of the rate applicable
under ORS 316.037 (1) or 7.5 percent.
(3) For the tax year of the taxpayer beginning on or after
January 1, 2010, and before January 1, 2011, notwithstanding ORS
316.037 (1), any gain that is treated as net capital gain for
federal tax purposes and that is included in taxable income in
this state shall be taxed at the lesser of the rate applicable
under ORS 316.037 (1) or 6.5 percent.
(4) For the tax year of the taxpayer beginning on or after
January 1, 2011, and before January 1, 2012, notwithstanding ORS
316.037 (1), any gain that is treated as net capital gain for
federal tax purposes and that is included in taxable income in
this state shall be taxed at the lesser of the rate applicable
under ORS 316.037 (1) or 5.5 percent. + }
SECTION 2. ORS 316.037 is amended to read:
316.037. (1)(a) A tax is imposed for each taxable year on the
entire taxable income of every resident of this state. The amount
of the tax shall be determined in accordance with the following
table:
_________________________________________________________________
____NOTE_TO_WEB_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
If taxable income The tax is:
____NOTE_TO_WEB_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
Not over $2,000 5% of
____NOTE_TO_WEB_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
taxable
income
Over $2,000 but not
____NOTE_TO_WEB_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
over $5,000 $100 plus 7%
____NOTE_TO_WEB_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
of the excess
over $2,000
____NOTE_TO_WEB_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
Over $5,000 $310 plus 9%
____NOTE_TO_WEB_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
of the excess
over $5,000
_________________________________________________________________
____________________________________________________________
END OF POSSIBLE IRREGULAR TABULAR TEXT
____________________________________________________________
(b) For tax years beginning in each calendar year, the
Department of Revenue shall adopt a table that shall apply in
lieu of the table contained in paragraph (a) of this subsection,
as follows:
(A) The minimum and maximum dollar amounts for each rate
bracket for which a tax is imposed shall be increased by the
cost-of-living adjustment for the calendar year.
(B) The rate applicable to any rate bracket as adjusted under
subparagraph (A) of this paragraph shall not be changed.
(C) The amounts setting forth the tax, to the extent necessary
to reflect the adjustments in the rate brackets, shall be
adjusted.
(c) For purposes of paragraph (b) of this subsection, the
cost-of-living adjustment for any calendar year is the percentage
(if any) by which the monthly averaged U.S. City Average Consumer
Price Index for the 12 consecutive months ending August 31 of the
prior calendar year exceeds the monthly averaged index for the
second quarter of the calendar year 1992.
(d) As used in this subsection, 'U.S. City Average Consumer
Price Index' means the U.S. City Average Consumer Price Index for
All Urban Consumers (All Items) as published by the Bureau of
Labor Statistics of the United States Department of Labor.
(e) If any increase determined under paragraph (b) of this
subsection is not a multiple of $50, the increase shall be
rounded to the next lower multiple of $50.
{ + (2) Notwithstanding subsection (1) of this section, any
gain that is treated as net capital gain for federal tax purposes
and that is included in taxable income in this state shall be
taxed at the rate of 4.5 percent. + }
{ - (2) - } { + (3) + } A tax is imposed for each taxable
year upon the entire taxable income of every part-year resident
of this state. The amount of the tax shall be computed under
{ - subsection (1) - } { + subsections (1) and (2) + } of this
section as if the part-year resident were a full-year resident
and shall be multiplied by the ratio provided under ORS 316.117
to determine the tax on income derived from sources within this
state.
{ - (3) - } { + (4) + } A tax is imposed for each taxable
year on the taxable income of every full-year nonresident that is
derived from sources within this state. The amount of the tax
shall be determined in accordance with { - the table set forth
in subsection (1) - } { + subsections (1) and (2) + } of this
section.
SECTION 3. ORS 316.122 is amended to read:
316.122. (1) If the federal taxable income of husband and wife
(one being a part-year resident and the other a nonresident) is
determined on a joint federal return, their taxable income in
this state shall be separately determined, unless they elect to
file a joint return, in which case their tax on their joint
income shall be determined in this state pursuant to ORS 316.037
{ - (3) - } { + (4) + }.
(2) If the federal taxable income of husband and wife (one
being a full-year resident and the other a part-year resident) is
determined on a joint federal return, their taxable income in
this state shall be separately determined, unless they elect to
file a joint return, in which case their tax on their joint
income shall be determined in this state pursuant to ORS 316.037
{ - (2) - } { + (3) + }.
(3) If the federal taxable income of husband and wife (one
being a full-year resident and the other a nonresident) is
determined on a joint federal return, their taxable income in the
state shall be separately determined, unless they elect to file a
joint return, in which case their tax on their joint income shall
be determined in this state pursuant to ORS 316.037 { - (3) - }
{ + (4) + }.
(4) For purposes of computing the tax of a husband and wife
under this section, if one of the spouses is a full-year resident
individual, then as used in ORS 316.037 { - (2) or - }
(3) { + or (4) + }, that spouse's taxable income derived from
Oregon sources is that spouse's entire federal taxable income,
defined in the laws of the United States, with the modifications,
additions and subtractions provided in this chapter and other
laws of this state applicable to personal income taxation.
(5) The provisions of ORS 316.367 with respect to joint returns
apply if both husband and wife are part-year residents or
full-year nonresidents.
SECTION 4. { + The amendments to ORS 316.037 and 316.122 by
sections 2 and 3 of this 2007 Act apply to tax years beginning on
or after January 1, 2012. + }
SECTION 5. { + (1) For the tax year of the taxpayer beginning
on or after January 1, 2010, and before January 1, 2011,
notwithstanding ORS 317.061, the net capital gain subject to tax
under ORS 317.061 shall be taxed at the rate of 6.5 percent.
(2) For the tax year of the taxpayer beginning on or after
January 1, 2011, and before January 1, 2012, notwithstanding ORS
317.061, the net capital gain subject to tax under ORS 317.061
shall be taxed at the rate of 5.5 percent. + }
SECTION 6. ORS 317.061 is amended to read:
317.061. { + (1) + } The rate of the tax imposed by and
computed under this chapter is { - six and six-tenths - } { +
6.6 + } percent.
{ + (2) Notwithstanding subsection (1) of this section, any
gain that is treated as net capital gain for federal tax purposes
and that is included in taxable income in this state shall be
taxed at the rate of 4.5 percent. + }
SECTION 7. { + The amendments to ORS 317.061 by section 6 of
this 2007 Act apply to tax years beginning on or after January 1,
2012. + }
SECTION 8. ORS 316.045 and 317.063 do not apply to tax years
beginning on or after January 1, 2012.
SECTION 9. ORS 316.045 and 317.063 are repealed on January 2,
2015.
SECTION 10. ORS 318.020 is amended to read:
318.020. (1) There hereby is imposed upon every corporation for
each taxable year a tax at the rate provided in ORS 317.061 upon
its Oregon taxable income derived from sources within this state,
other than income for which the corporation is subject to the tax
imposed by ORS chapter 317 according to or measured by its Oregon
taxable income.
(2) Income from sources within this state includes income from
tangible or intangible property located or having a situs in this
state and income from any activities carried on in this state,
regardless of whether carried on in intrastate, interstate or
foreign commerce.
{ - (3) Income that constitutes net long-term capital gain
described in ORS 317.063 shall be taxed at the rate imposed under
ORS 317.063. - }
SECTION 11. The amendments to ORS 318.020 by section 10 of this
2007 Act apply to tax years beginning on or after January 1,
2012.
SECTION 12. ORS 291.349 is amended to read:
291.349. (1) As soon as practicable after adjournment sine die
of the regular session of the Legislative Assembly, the Oregon
Department of Administrative Services shall report to the
Emergency Board the estimate as of July 1 of the first year of
the biennium of General Fund and State Lottery Fund revenues that
will be received by the state during that biennium. The Oregon
Department of Administrative Services shall base its estimate on
the last forecast given to the Legislative Assembly before
adjournment sine die of the regular session on which the printed,
adopted budget prepared in the Oregon Department of
Administrative Services is based, adjusted only insofar as
necessary to reflect changes in laws adopted at that session. The
report shall contain the estimated revenues from corporate income
and excise taxes separately from the estimated revenues from
other General Fund sources. The Oregon Department of
Administrative Services may revise the estimate if necessary
following adjournment sine die of any special or emergency
session of the Legislative Assembly but any revision does not
affect the basis of the computation described in subsection (3)
{ - or (4) - } of this section.
(2) As soon as practicable after the end of the biennium, the
Oregon Department of Administrative Services shall report to the
Emergency Board, or the Legislative Assembly if it is in session,
the amount of General Fund revenues collected as of the last June
30 of the preceding biennium. The report shall contain the
collections from corporate income and excise taxes separately
from collections from other sources.
{ - (3) If the revenues received from the corporate income
and excise taxes during the biennium exceed the amounts estimated
to be received from such taxes for the biennium, as estimated
after adjournment sine die of the regular session, by two percent
or more, the total amount of that excess shall be credited to
corporate income and excise taxpayers in a percentage amount of
corporate excise and income tax liability as determined under
subsection (5) of this section. However, no credit shall be
allowed against tax liability imposed by ORS 317.090. - }
{ - (4) - } { + (3) + } If the revenues received from
General Fund revenue sources, exclusive of { - those described
in subsection (3) of this section - } { + corporate income and
excise tax revenues + }, during the biennium exceed the amounts
estimated to be received from such sources for the biennium, as
estimated after adjournment sine die of the regular session, by
two percent or more, there shall be refunded from personal income
tax revenues an amount equal to the total amount of that excess,
reduced by the cost certified by the Department of Revenue under
ORS 291.351 as being allocable to payments described under this
subsection. The excess amount to be refunded shall be paid to
personal income taxpayers in a percentage amount of prior year
personal income tax liability as determined under subsection
{ - (6) - } { + (4) + } of this section.
{ - (5) If there is an excess to be credited under subsection
(3) of this section, on or before October 1, following the end of
each biennium, the Oregon Department of Administrative Services
shall determine and certify to the Department of Revenue the
percentage amount of credit for purposes of subsection (3) of
this section. The percentage amount determined shall be a
percentage amount to the nearest one-tenth of a percent that will
distribute the excess to be credited to corporate excise and
income taxpayers for taxable years beginning in the calendar year
during which the excess is determined. The credit shall be
computed after the allowance of any other credit or offset
against tax liability allowed or allowable under any provision of
law of this state, and before the application of estimated tax
payments, withholding or other advance tax payments. - }
{ - (6)(a) - } { + (4)(a) + } If there is an excess to be
refunded under subsection { - (4) - } { + (3) + } of this
section, on or before September 15, following the end of each
biennium, the Oregon Department of Administrative Services shall
determine and certify to the Department of Revenue the percentage
amount of refund payment for purposes of subsection { - (4) - }
{ + (3) + } of this section. The percentage amount so
determined shall be a percentage amount to the nearest
one-hundredth of a percent that will distribute the excess to be
refunded to personal income taxpayers under subsection
{ - (4) - } { + (3) + } of this section. The percentage amount
shall equal the amount distributed under subsection { - (4) - }
{ + (3) + } of this section divided by the estimated total
personal income tax liability for all personal income taxpayers
for tax years beginning in the calendar year immediately
preceding the calendar year in which the excess is determined.
(b) The Department of Revenue shall multiply the percentage
amount determined under paragraph (a) of this subsection by the
total amount of a personal income taxpayer's tax liability for
the tax year beginning in the calendar year immediately preceding
the calendar year in which the excess is determined in order to
calculate the amount of the refund to be made to the taxpayer.
(c) The refund described under this subsection shall be subject
to the rules allowing setoff of refunds or sums due debtors of
this state under ORS 293.250.
(d) The refund described under this subsection shall be mailed
by the Department of Revenue to personal income taxpayers
eligible for the payment on or before December 1 following the
end of the biennium for which the payment described under this
subsection is being made.
(e) Notwithstanding paragraph (d) of this subsection, the
Department of Revenue shall mail the refund at the earliest date
of practicable convenience in the case of a return:
(A) For a tax year beginning in the calendar year immediately
preceding the calendar year in which the excess is determined for
which refund is being made; and
(B) That is first filed on or after August 15 after the end of
the biennium.
{ - (7) - } { + (5) + } No refund shall be made to a
taxpayer if, after making the calculation described under
subsection { - (6) - } { + (4) + } of this section, the
amount calculated is less than $1.
SECTION 13. ORS 291.351 is amended to read:
291.351. If, based on the report made under ORS 291.349 (2),
refund will be made under ORS 291.349 { - (4) - } { +
(3) + }, the Department of Revenue shall certify the costs that
are incurred in calculating and making the refunds under ORS
291.349 { - (4) - } { + (3) + }. Costs shall be certified by
the department within 15 days of the date the report under ORS
291.349 (2) is made. As used in this section, 'costs ' means and
is limited to those costs that, absent the requirement of making
a refund under ORS 291.349 { - (4) - } { + (3) + }, would not
be incurred by the department.
SECTION 14. ORS 305.792 is amended to read:
305.792. (1) The Department of Revenue shall cause a checkoff
box to be printed on the personal income { - and corporate
income or excise - } tax returns for the appropriate tax year,
by which a taxpayer may indicate that a surplus refund payment
{ - or credit - } that the taxpayer may otherwise be entitled to
under ORS 291.349 shall instead be used for funding education.
(2)(a) A personal income taxpayer may elect to donate a surplus
refund payment to be made under ORS 291.349 to public elementary
and secondary school education. The taxpayer may make the
election by checking the appropriate checkoff box on the
taxpayer's return indicating the taxpayer's intention to donate
the surplus refund payment to public elementary and secondary
education.
(b) Once made, the election is irrevocable for any surplus
refund payments received until a subsequent return is filed for a
later tax year, and on which the checkoff box is not checked.
{ - (3)(a) A corporate excise or income taxpayer may elect to
not claim a surplus refund credit that the taxpayer would
otherwise be entitled to pursuant to ORS 291.349, in order to
achieve a corresponding transfer of such moneys from the General
Fund to the State School Fund for the support of public
elementary and secondary school education. The taxpayer may make
the election by checking the appropriate checkoff box on the
taxpayer's return and by not using the surplus refund credit
percentage to reduce the taxpayer's tax liability. - }
{ - (b) A taxpayer that checks the appropriate checkoff box
indicating that the credit will not be claimed but that
nevertheless claims the credit in determining the taxpayer's tax
liability shall be considered to have not made the election under
this subsection. - }
{ - (c) The election to not claim a credit under this
subsection may not be revoked by filing an amended return. - }
{ - (4) - } { + (3) + } After the determination that
surplus refund payments are to be made under ORS 291.349 { + (3)
and + } (4) { - and (6) - } , the department shall determine
the total amount of such payments for which an election to donate
to public elementary and secondary education has been made and
shall certify this amount to the State Treasurer. Following the
department's certification to the State Treasurer, an election to
donate that biennium's surplus refund payments under subsection
(2) of this section is irrevocable.
{ - (5) Following the determination to credit corporate
income and excise taxes pursuant to ORS 291.349 (3) and (5), the
department shall annually certify the total amount of allowable
credits that have not been claimed pursuant to an election made
under subsection (3) of this section. The certification shall be
made on or before December 31 of each year, until the tax year
for which the credit would otherwise be claimed becomes a closed
tax year. - }
SECTION 15. { + Section 16 of this 2007 Act is added to and
made a part of ORS chapter 314. + }
SECTION 16. { + The Department of Revenue shall adjust any
corporate income or excise tax return filed before the effective
date of this 2007 Act to reflect the amendments to ORS 291.349 by
section 12 of this 2007 Act and the amendments to section 14,
Article IX of the Oregon Constitution by ___ Joint Resolution ___
(2007) (LC 1346). + }
SECTION 17. { + This 2007 Act does not take effect unless the
amendment to the Oregon Constitution proposed by ___ Joint
Resolution ___ (2007) (LC 1346) is approved by the people at a
special election held throughout this state on the same date as
the next primary election. This 2007 Act takes effect on the
effective date of that constitutional amendment. + }
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