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2010 Corporate Tax Law Changes

Tax changes

Oregon's corporate tax has changed for tax years beginning on or after January 1, 2009. Oregon corporate tax is the greater of either the computed tax or the minimum tax. (ORS 317.061, 317.090)

Computed tax

For tax years beginning on or after January 1, 2009, and before January 1, 2011:
  • For Oregon taxable income of $250,000 or less, multiply taxable income by 6.6 percent.
  • For Oregon taxable income greater than $250,000, multiply taxable income of more than $250,000 by 7.9 percent and add $16,500.

Minimum tax

S corporations carrying on or doing business in Oregon are subject to $150 minimum tax. ORS 317.090
C corporations carrying on or doing business in Oregon are subject to minimum tax based on Oregon sales shown here:
  • Less than $500,000, minimum tax is $150. 
  • $500,000 or more, but less than $1 million, minimum tax is $500.
  • $1 million or more, but less than $2 million, minimum tax is $1,000.
  • $2 million or more, but less than $3 million, minimum tax is $1,500.
  • $3 million or more, but less than $5 million, minimum tax is $2,000.
  • $5 million or more, but less than $7 million, minimum tax is $4,000.
  • $7 million or more, but less than $10 million, minimum tax is $7,500.
  • $10 million or more, but less than $25 million, minimum tax is $15,000.
  • $25 million or more, but less than $50 million, minimum tax is $30,000.
  • $50 million or more, but less than $75 million, minimum tax is $50,000.
  • $75 million or more, but less than $100 million, minimum tax is $75,000.
  • $100 million or more, minimum tax is $100,000.

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Oregon sales

Nonapportioned returns. C corporations doing business only within Oregon will calculate Oregon sales by adding:
  • Gross receipts from sales of inventory (less returns and allowances), equipment, and other assets;
  • Gross rent and lease payments received;
  • Gross receipts from the performance of services;
  • Gross receipts from the sale, exchange, redemption, or holding of intangible assets derived from the tax-payer's primary business activity and included in the taxpayer's business income;
  • Net gain from the sale, exchange, or redemption of intangible assets not property if it's not derived from the taxpayer's primary business activity but included in the taxpayer's business income; and
  • Other income.
Generally, for purposes of determining minimum tax, the calculation for Oregon sales includes business income amounts from federal Form 1120, lines 1c, and 5 through 10. Include positive numbers only.

Apportioned returns. C corporations and insurance companies doing business in more than one state that apportion business income for Oregon tax purposes, use the Oregon sales amount from Line 21(a) on Schedule AP.

Note:
  • Consolidated returns: the minimum tax is based on Oregon sales of the affiliated group of corporations filing an Oregon return.
  • Consolidated filers: one minimum tax applies to the affiliated group filing the consolidated return, not to each individual affiliate included in the consolidated return doing business in Oregon.
  • The minimum tax is not apportionable for a short tax year (except a change of accounting period).
  • The minimum tax is payable in full for any part of the year during which a taxpayer is subject to tax.

Questions about minimum tax?

For specific questions relating to corporation minimum excise tax, please e-mail us. We'll answer most inquiries within two business days.

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Ties to federal tax law

Oregon is tied to the federal definition of taxable income as of December 31, 2009, with the following exceptions:
  • Any additional deduction allowed as a result of the American Recovery and Reinvestment Act of 2009 (P.L. 111-5) with regard to the following provisions of the Internal Revenue Code:
Discharge of indebtedness—IRC section 108(i) election to include Section 108 cancellation of debt income over a 5-year period is not available for Oregon taxpayers.
Bonus depreciation—IRC section 168(k) additional 50 percent first-year depreciation is not available for Oregon purposes for "qualified property" placed in service during calendar year 2009. This creates a modification for Oregon purposes for 2009 and subsequent years.
Section 179 expense—For tax years beginning on or after January 1, 2009, the Section 179 expense is limited to the federal limitation, excluding the additional amount allowed under ARRA 2009.
  • Any deduction for qualified production activities income (QPAI) under IRC 199. An addition on the Oregon return is required for tax years beginning on or after January 1, 2005.
  • Any exclusions from income under IRC 139A, for tax years beginning on or after January 1, 2008. Federal law allows you to exclude certain subsidy payments made by the federal government related to Part D of the Medicare Prescription Drug Insurance program. You must add this income on your Oregon return.

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REITs and RICs

For tax years beginning on or after January 1, 2010, Oregon law requires that a real estate investment trust (REIT) or regulated investment company (RIC) that otherwise meets the definition of a federal affiliate be included in the consolidated Oregon return. This will be an Oregon modification (addition or subtraction) to federal taxable income. For apportioning taxpayers, factors from the REIT or RIC will be included in the apportionment calculation.
 

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Intangible and interest expense add-back and credit

For tax years beginning on or after January 1, 2010, Oregon law provides that intangible and interest expenses must be added back to federal taxable income for Oregon purposes when a related member that isn't included in the same tax return receives them and they are paid in connection with a direct or indirect transaction with a related member. If the related member paid tax on the income in this state or another tax jurisdiction, a credit will be allowed on the taxpayer's return.
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Transferable credits

Transferable credits may not be transferred (sold), for tax purposes, to an entity treated as a partnership for tax purposes. Transferable credits may only be transferred once.
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Biomass credit

The Department of Energy will certify the biomass collector or producer credit.
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Lender's credit

A qualified borrower, for purposes of the credit, can be a nonprofit corporation, nonprofit cooperative, state governmental entity, or local unit of government on a loan to finance a manufactured dwelling park. The Housing and Community Services Department will certify the lender's credit.
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Film and video contribution credit

Beginning January 1, 2010, the total amount of certified credits allowable each fiscal year has increased from $5 million to $7.5 million.
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Reservation enterprise zone credit

Certain Indian tribes may request that land be designated as reservation enterprise zone. Exemptions and tax credits available in connection with an enterprise zone are also available for a reservation enterprise zone.
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Forest products apportionment

For tax years beginning on or after January 1, 2010, the forest products double-weighted apportionment option for certain forest products companies is no longer available.
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Business energy tax credit (BETC)

ORS 315.354 has been amended to specify a transferee holding a BETC that has been transferred may not claim the BETC for any tax year before the tax year in which the transferee obtained the credit

Questions—General

We will answer most email inquiries within two business days.

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