For tax years beginning on or after January 1, 2018, the current term “business income” becomes “apportionable income” and “nonbusiness income” becomes “nonapportionable income.” See HB 2275 (2017).
Listed foreign jurisdictions
The 2017 Oregon Legislature made no changes to Oregon’s listed jurisdiction law (ORS 317.716). Accordingly, the list of countries used in tax years 2015 and 2016 to compute the listed jurisdiction modification hasn’t changed for tax years 2017 and 2018. See Appendix C for the list of countries.
For tax years beginning on or after January 1, 2018, Oregon corporate excise taxpayers must apportion their income from sales of services and intangible property according to market-based sourcing principles rather than cost of performance. See SB 28(2017).
Sales factor computation
For tax years beginning on or after January 1, 2018, Oregon corporate excise taxpayers must exclude functional type income from the computation of their Oregon sales factor.
For tax years beginning on or after January 1, 2018, any facts related to any affiliated corporation may be used to determine whether a domestic US corporation is part of a unitary consolidated group. Currently, Oregon law prevents any facts related to foreign corporations from being used to determine if a domestic US corporation is part of a unitary consolidated group unless tax avoidance or evasion is at issue. See SB 30 (2017).
Bovine manure tax credit
The bovine manure tax credit is a new tax credit that equals $3.50 for each wet ton of bovine manure and may only be claimed once for each wet ton of bovine manure. The credit is certified by the Oregon Department of Agriculture and applies to tax years beginning January 1, 2018. It’s scheduled to sunset on January 1, 2022. See Sections 6 through 11 of HB 2066 (2017) for more details.
Tax credit sunsets
Beginning January 1, 2018, the following tax credits are no longer available, except for applicable carryforward purposes:
- Biomass production/collection (ORS 315.141).
- Electronic commerce zone investment (ORS 315.507).
- Energy conservation projects (ORS 315.331).
- Fire insurance gross premiums tax (ORS 317.122).
- Long-term rural enterprise zone facilities (June 30, 2018)(ORS 317.124).*
- Qualified research activities and Alternative qualified research activities (ORS 317.152 and 317.154).
- Renewable energy development contributions (ORS 315.326).
- Transportation projects (ORS 315.336).
*The credit for long-term rural enterprise zone facilities must be certified on or before June 30, 2018.
Credits can't offset minimum excise tax
For tax years beginning on or after January 1, 2015, credits can't be used to reduce minimum excise tax for corporations (ORS 317.090).