Businesses

Tie to federal tax law

In general, Oregon income tax law is based on federal income tax law. Oregon is tied to the federal definition of taxable income as of December 31, 2015; however, Oregon is still disconnected from:
  • Federal subsidies for prescription drug plans (IRC§139A; ORS 317.401).
  • Domestic production activities (QPAI) (IRC §199; ORS 317.398).
  • Deferral of certain deductions for tax years beginning on or after January 1, 2009 and before January 1, 2011 may require subsequent Oregon modifications (IRC §108; §168(k); and §179; ORS 317.301).

Corporation due dates

Oregon corporation returns are due on the 15th day of the month following the due date of the federal return. Oregon’s C corporation return due dates have changed because of changes to the due date of federal C corporation returns, which moved federal due dates one month forward. For calendar year filers, the due date for 2016 Oregon C corporation returns is May 15, 2017.
Note: S corporation due dates haven’t changed. For S corporations that file on a calendar year basis, the Oregon due date is April 17, 2017. For S corporation fiscal year filers, the due date is the 15th day of the month following the federal due date.
Under a special rule, C corporations with a fiscal year ending June 30th will retain their current federal due date for 10 more years, so they won’t be impacted by the new due date until tax years beginning after December 31, 2025 (7/1/2026–6/30/2027).
Entities not impacted by the changes to return due dates
include:
  • S corporations (Federal Form 1120-S).
  • Exempt or non-profits (Federal Forms 990 & 990-T).
  • Cooperatives (Federal Form 1120-C).
  • Overseas Corporations, without a U.S. office (Federal Form 1120-F).
  • IC-DISC (Federal Form 1120-IC-DISC).

Minimum tax can’t be offset by credits

For tax years beginning on or after January 1, 2015, and before January 1, 2021, taxpayers may not apply any corporation tax credits against the minimum tax of C corporations.

For tax years beginning prior to January 1, 2015, all corporation tax credits, except for the “Contributions of computers or scientific equipment for research” credit, may be applied against the minimum tax of C corporations.

Exemption for emergency service providers

An out-of-state emergency service provider is exempt from tax when operating at the request of a registered business, solely for the purposes of performing disaster or emergency-related work on critical infrastructure.
 
Disaster or emergency-related work conducted by an out-of-state business may not be used as the sole basis for determining that a corporation is doing business in Oregon.

Listed foreign jurisdictions

For tax years beginning on or after January 1, 2016, the list of foreign jurisdictions that must be included in the Oregon corporate excise tax return has changed. The list changed to include Guatemala and the Republic of Trinidad and Tobago. Monaco is deleted from the list. The list has also been updated to include the island nations of Bonaire, Curacao, Saba, Sint Maarten and Sint Eustatius (formerly the Netherlands Antilles) (ORS 317.716 and corresponding administrative rules.)

Additions and subtractions

Marijuana businesses—deduction of expenses

ORS 317.763 allows Oregon taxpayers filing a corporate excise or income tax return to deduct business expenses otherwise barred by Internal Revenue Code (IRC) §280E if the taxpayer is engaged in marijuana-related activities authorized by ORS 475B.010 to 475B.395.

Credits

Important: Corporations must include copies of all credit certifications with your return when claiming any certified credit.
 
Biomass production/collection credit
The amount allowed for animal manure decreased per wet ton. Contact the Oregon Department of Energy for more information.
 
Individual Development Accounts
The Individual Development Accounts (IDA) contribution credit has been modified. The total credit allowed to a taxpayer in any tax year may not exceed $500,000 (ORS 315.271).
 
Child Care Office contribution credit
Starting with tax years beginning on or after January 1, 2016, the calculation of the Child Care Office fund contribution credit is revised. The amount of credit is reduced from 75 percent to no more than 50 percent of the amount contributed to the fund (ORS 315.213). Additionally, the credit is extended to tax years beginning before January 1, 2022.
 
Qualified Research credit
The Qualified Research credit may be calculated using any method allowed under Internal Revenue Code (IRC) §41. This presently includes both the Standard Method and the Alternative Simplified Credit Method. The Oregon applicable percentage is 5% regardless of the method used to calculate the credit. (ORS 317.152 and OAR 150-317.152)
 
University Venture Fund credit
This credit has changed beginning with tax year 2016. The credit is now 60% of the contributions made to the fund, not to exceed $600,000. The credit is claimed up to taxpayer’s tax liability, with a three year carryforward for unused amounts.
 
Credits that sunset on December 31, 2015
  • Dependent care assistance (ORS 315.204).
  • Dependent care information and referral (ORS 315.204).
  • Energy transportation projects (ORS 315.336).
  • Qualified equity investment (ORS 315.533).

Form changes

All corporation forms and schedules. We have changed all our forms and schedules to provide a more consistent format and to include a shorthand name so they’re easier to find. We also renamed our Form 20-I to Form OR-20-INC. Read each form and publication carefully as other items may have changed.

Form OR-DRD
Oregon has a new Dividends-Received Deduction form (Form OR-DRD) that’s required to be filed by all corporations claiming a dividends-received deduction. This new form is very similar in format to the federal schedule C for dividends but it isn’t identical. Refer to the form for more details.
 
Schedule OR-ASC-CORP
This schedule is used to claim additions, subtractions, and credits. For 2016, it has been redesigned to separate credits that have a carryforward provision and those that don’t. Also all corporation credit codes have changed for 2016. Use Appendix A in form instructions from the specific tax year you’re filing to ensure you’re using the proper code number for all credits.
 
Forms OR-20, OR-20-INC, and OR-20-INS
These forms have been redesigned to move most of the additions, subtractions, and credits onto Schedule OR-ASC-CORP. See the specific forms.
 
Form OR-20-V
When making a payment with your return, be sure to include a Form OR-20-V.

New checkboxes

Federal Form 5471. Forms OR-20, OR-20-INC, OR-20-INS, and OR-20-S have a new checkbox for taxpayers who file Federal Form 5471. Check this box if you file for affiliates incorporated in any of the listed foreign jurisdictions in ORS 317.716, also shown in Appendix C in form instructions.
 

Alternative apportionment. See Appendix D in form instructions for complete information.

Looking ahead

Interstate broadcasters

For tax years beginning on or after January 1, 2017, an interstate broadcaster’s method of apportionment of business income will revert to pre-January 1, 2014 law and will be based on an estimate of Oregon’s national audience or subscribers’ share (ORS 314.684 and 314.680).

Read more corporation tax topics >>