Oregon Tax Changes - October 2024
Week Of 10.07.2024
Oregon residents who prepare their own tax returns in 2025 can now electronically file both their federal and state income tax returns using the combination of IRS Direct File and Direct File Oregon.
This option is available to wage earners who receive Form(s) W-2, and Social Security income, unemployment income, interest income, retirement income (other than IRAs), and Alaska Permanent Fund dividends. Eligible deductions and credits include the standard deduction, Child Tax Credit, Credit for Other Dependents, Earned Income Credit, Educator Expenses deduction, Student Loan Interest deduction, Saver’s Credit, Credit for the Elderly and Disabled, Premium Tax Credit, and Health Savings Accounts.
Week Of 09.30.2024
Oregon First-Time Home Buyer Savings Account Update:
- Cost-of-Living Adjustment (COLA): The Oregon Department of Revenue has adopted a new regulation for the First-Time Home Buyer Savings Account. This regulation introduces a COLA for the subtraction limits, effective for tax years beginning after December 31, 2023.
- How the COLA Works: The subtraction limits will be adjusted each year based on the percentage change in the U.S. City Average Consumer Price Index (CPI) from August 31, 2019, to August 31 of the prior year. If the increase is not a multiple of 5∗∗,it will be rounded up to the next highest multiple of∗∗5∗∗,it will be rounded up to the next highest multiple of∗∗5.
This regulation is effective as of October 2, 2024.
The Oregon Department of Revenue has announced that Oregon PTE-E tax returns must be filed electronically by October 15, 2024
to allocate credits to partners and shareholders. This deadline applies to taxpayers who need to file PTE-E tax returns before the October 15, 2024 extension deadline.
The Legislative Revenue Office (LRO) has released an analysis of Ballot Measure 118
which proposes to increase state corporate taxes and distribute the increased revenue to Oregon residents in equal amounts. The measure would create a corporate minimum tax, and the increased taxes paid under this tax would be divided by the number of Oregon residents, resulting in a fixed payment to residents as either a refundable income tax credit or as a direct cash payment.
Oregon Corporate Income Tax Subpart F 20% repatriation amount reincluded in Oregon apportionment of unitary business income.
The Oregon Tax Court has ruled that a deemed dividend constituting the Subpart F 20% repatriation amount must be reincluded in the denominator of the Oregon sales factor when the deemed payor was a controlled foreign corporation (CFC) engaged in a unitary business with a water's edge group, and the water's edge group's primary business activity was the same as that of the CFC. This means that the deemed dividend must be included in the calculation of the company's taxable income in Oregon.
The Legislative Revenue Office (LRO) has released an analysis of Ballot Measure 118
which proposes to increase state corporate taxes and distribute the increased revenue to Oregon residents in equal amounts. The measure would create a corporate minimum tax, and the increased taxes paid under this tax would be divided by the number of Oregon residents, resulting in a fixed payment to residents as either a refundable income tax credit or as a direct cash payment.
Week Of 10.07.2024
Oregon Personal Income Tax—IRS Direct File and Direct File Oregon available for 2025 filing.
The IRS and the Oregon Department of Revenue announced that Oregon residents who prepare their own tax returns in 2025 have the option to electronically file both their federal and state income tax returns using the combination of IRS Direct File and Direct File Oregon. Eligible for IRS Direct File for the 2025 tax filing season are wage earners who receive Form(s) W-2, and Social Security income, unemployment income, interest income, retirement Income (other than IRAs), and Alaska Permanent Fund dividends. Deductions and credits available are the standard deduction, Child Tax Credit, Credit for Other Dependents, Earned Income Credit, Educator Expenses deduction, Student Loan Interest deduction, Saver’s Credit, Credit for the Elderly and Disabled, Premium Tax Credit, Hand Health Savings Accounts. (Press Release, Or. Dept. Rev., 10/02/2024; IRS Direct File Expands Eligibility for 2025 Filing Season, Or. Dept. Rev., 10/02/2024.)
Week Of 09.30.2024
Oregon Personal Income Tax—Oregon adopts regulation on first-time home buyer savings account COLA.
The Oregon Department of Revenue has adopted Or. Admin. Code § 150-316-0608, First-time Home Buyer Savings Account—Cost-of-Living Adjustment, effective October 2, 2024. The rule provides that for tax years beginning after December 31, 2023, for each calendar year, the subtraction limits in Or. Rev. Stat. 316.800(1) will be adjusted by multiplying each limit amount by a cost-of-living adjustment for the calendar year. 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 12 consecutive months ending August 31, 2019. If any resulting increase is not a multiple of $5, the increase will be rounded to the next highest multiple of $5.
Oregon Corporate Income Tax—File Oregon PTE-E extension tax returns by October 15 to allocate credits.
The Oregon Department of Revenue has provided notice to taxpayers needing to file pass-through entity elective (PTE-E) tax returns before the October 15, 2024 extension deadline that returns must be filed electronically by October 15 in order to allocate credits to partners and shareholders. (Filing Extension Deadline Approaching, Or. Dept. Rev., 09/25/2024.)
Oregon Corporate Income Tax—Oregon Legislative Revenue Office releases analysis of Ballot Measure 118.
The Legislative Revenue Office (LRO) has issued a follow-up to LRO Report #4-24 on Initiative Petition 17 (see State Tax Update, 07/15/2024), which has been certified as Ballot Measure 118 for the November 5th election. Measure 118 proposes to increase state corporate taxes and distribute the increased revenue to Oregon residents in equal amounts: after accounting for certain costs, the increased taxes paid under the corporate minimum tax would be divided by the number of Oregon residents, resulting in a fixed payment to residents as either a refundable income tax credit or as a direct cash payment. The Key Findings and Impacts section of the report provides a high-level synopsis of the analysis, and the Minimum Tax Changes section describes the proposed tax changes and provides examples of how they would affect hypothetical businesses. (LRO Report #7-24, Oregon Legislative Revenue Office, 09/01/2024.)
Oregon Corporate Income Tax Subpart F 20% repatriation amount reincluded in Oregon apportionment of unitary business income.
The Oregon Tax Court held that a deemed dividend constituting the Subpart F 20% repatriation amount must be reincluded in the denominator of the Oregon sales factor under Or. Rev. Stat. § 314.665(6) when the deemed payor was a controlled foreign corporation (CFC) engaged in a unitary business with a water's edge group, and the water's edge group's primary business activity was the same as that of the CFC. In this case, most if not all of the federal repatriation amount consisted of earnings and profits from selling the same goods and services normally sold in the water's edge group's software business, and the sales activities of the water's edge group and the CFCs were not only of the same type, they were part of the same business. The water's edge group and the CFCs were actively engaged together in the same single, "unitary business" that generated those earnings and profits. The court further held that the water's edge group failed to carry its burden of proof relating to its claim for alternative apportionment; it did not prove that the assessment failed to fairly represent the extent of the taxpayer's business activity in the state, or that the assessment produced unconstitutional results. (Microsoft Corporation v. Dept. Rev., Or. Tax Court (Reg. Div.), Dkt. No. TC 5413, 08/29/2024 (unpublished).)
Oregon Partnerships—File Oregon PTE-E extension tax returns by October 15 to allocate credits.
The Oregon Department of Revenue has provided notice to taxpayers needing to file pass-through entity elective (PTE-E) tax returns before the October 15, 2024 extension deadline that returns must be filed electronically by October 15 in order to allocate credits to partners and shareholders. (Filing Extension Deadline Approaching, Or. Dept. Rev., 09/25/2024.)
Oregon Personal Income Tax—Oregon Legislative Revenue Office releases analysis of Ballot Measure 118.
The Legislative Revenue Office (LRO) has issued a follow-up to LRO Report #4-24 on Initiative Petition 17 (see State Tax Update, 07/15/2024), which has been certified as Ballot Measure 118 for the November 5th election. Measure 118 proposes to increase state corporate taxes and distribute the increased revenue to Oregon residents in equal amounts: after accounting for certain costs, the increased taxes paid under the corporate minimum tax would be divided by the number of Oregon residents, resulting in a fixed payment to residents as either a refundable income tax credit or as a direct cash payment. The Key Findings and Impacts section of the report provides a high-level synopsis of the analysis, and the Minimum Tax Changes section describes the proposed tax changes and provides examples of how they would affect hypothetical businesses. (LRO Report #7-24, Oregon Legislative Revenue Office, 09/01/2024.)
Week Of 10.07.2024
Oregon Personal Income Tax—IRS Direct File and Direct File Oregon available for 2025 filing.
The IRS and the Oregon Department of Revenue announced that Oregon residents who prepare their own tax returns in 2025 have the option to electronically file both their federal and state income tax returns using the combination of IRS Direct File and Direct File Oregon. Eligible for IRS Direct File for the 2025 tax filing season are wage earners who receive Form(s) W-2, and Social Security income, unemployment income, interest income, retirement Income (other than IRAs), and Alaska Permanent Fund dividends. Deductions and credits available are the standard deduction, Child Tax Credit, Credit for Other Dependents, Earned Income Credit, Educator Expenses deduction, Student Loan Interest deduction, Saver’s Credit, Credit for the Elderly and Disabled, Premium Tax Credit, Hand Health Savings Accounts. (Press Release, Or. Dept. Rev., 10/02/2024; IRS Direct File Expands Eligibility for 2025 Filing Season, Or. Dept. Rev., 10/02/2024.)
Week Of 09.30.2024
Oregon Personal Income Tax—Oregon adopts regulation on first-time home buyer savings account COLA.
The Oregon Department of Revenue has adopted Or. Admin. Code § 150-316-0608, First-time Home Buyer Savings Account—Cost-of-Living Adjustment, effective October 2, 2024. The rule provides that for tax years beginning after December 31, 2023, for each calendar year, the subtraction limits in Or. Rev. Stat. 316.800(1) will be adjusted by multiplying each limit amount by a cost-of-living adjustment for the calendar year. 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 12 consecutive months ending August 31, 2019. If any resulting increase is not a multiple of $5, the increase will be rounded to the next highest multiple of $5.
Oregon Corporate Income Tax—File Oregon PTE-E extension tax returns by October 15 to allocate credits.
The Oregon Department of Revenue has provided notice to taxpayers needing to file pass-through entity elective (PTE-E) tax returns before the October 15, 2024 extension deadline that returns must be filed electronically by October 15 in order to allocate credits to partners and shareholders. (Filing Extension Deadline Approaching, Or. Dept. Rev., 09/25/2024.)
Oregon Corporate Income Tax—Oregon Legislative Revenue Office releases analysis of Ballot Measure 118.
The Legislative Revenue Office (LRO) has issued a follow-up to LRO Report #4-24 on Initiative Petition 17 (see State Tax Update, 07/15/2024), which has been certified as Ballot Measure 118 for the November 5th election. Measure 118 proposes to increase state corporate taxes and distribute the increased revenue to Oregon residents in equal amounts: after accounting for certain costs, the increased taxes paid under the corporate minimum tax would be divided by the number of Oregon residents, resulting in a fixed payment to residents as either a refundable income tax credit or as a direct cash payment. The Key Findings and Impacts section of the report provides a high-level synopsis of the analysis, and the Minimum Tax Changes section describes the proposed tax changes and provides examples of how they would affect hypothetical businesses. (LRO Report #7-24, Oregon Legislative Revenue Office, 09/01/2024.)
Oregon Corporate Income Tax Subpart F 20% repatriation amount reincluded in Oregon apportionment of unitary business income.
The Oregon Tax Court held that a deemed dividend constituting the Subpart F 20% repatriation amount must be reincluded in the denominator of the Oregon sales factor under Or. Rev. Stat. § 314.665(6) when the deemed payor was a controlled foreign corporation (CFC) engaged in a unitary business with a water's edge group, and the water's edge group's primary business activity was the same as that of the CFC. In this case, most if not all of the federal repatriation amount consisted of earnings and profits from selling the same goods and services normally sold in the water's edge group's software business, and the sales activities of the water's edge group and the CFCs were not only of the same type, they were part of the same business. The water's edge group and the CFCs were actively engaged together in the same single, "unitary business" that generated those earnings and profits. The court further held that the water's edge group failed to carry its burden of proof relating to its claim for alternative apportionment; it did not prove that the assessment failed to fairly represent the extent of the taxpayer's business activity in the state, or that the assessment produced unconstitutional results. (Microsoft Corporation v. Dept. Rev., Or. Tax Court (Reg. Div.), Dkt. No. TC 5413, 08/29/2024 (unpublished).)
Oregon Partnerships—File Oregon PTE-E extension tax returns by October 15 to allocate credits.
The Oregon Department of Revenue has provided notice to taxpayers needing to file pass-through entity elective (PTE-E) tax returns before the October 15, 2024 extension deadline that returns must be filed electronically by October 15 in order to allocate credits to partners and shareholders. (Filing Extension Deadline Approaching, Or. Dept. Rev., 09/25/2024.)
Oregon Personal Income Tax—Oregon Legislative Revenue Office releases analysis of Ballot Measure 118.
The Legislative Revenue Office (LRO) has issued a follow-up to LRO Report #4-24 on Initiative Petition 17 (see State Tax Update, 07/15/2024), which has been certified as Ballot Measure 118 for the November 5th election. Measure 118 proposes to increase state corporate taxes and distribute the increased revenue to Oregon residents in equal amounts: after accounting for certain costs, the increased taxes paid under the corporate minimum tax would be divided by the number of Oregon residents, resulting in a fixed payment to residents as either a refundable income tax credit or as a direct cash payment. The Key Findings and Impacts section of the report provides a high-level synopsis of the analysis, and the Minimum Tax Changes section describes the proposed tax changes and provides examples of how they would affect hypothetical businesses. (LRO Report #7-24, Oregon Legislative Revenue Office, 09/01/2024.)