Oregon Administrative Code

150-316-0513 Modification of Federal Taxable Income: Adding Interest or Dividends of the United States Exempted by Federal Income Tax Law Interest or dividend income attributable to obligations of any authority, commission, instrumentality or territorial possession of the United …

150-316-0515 Modification of Federal Taxable Income: Adding Federal Estate Tax Attributable to Income in Respect of a Decedent Not Taxable by Oregon The deduction allowed in the computation of federal taxable income for federal estate tax attributable to income in respect of a de…

150-316-0519 Gain or Loss Upon the Sale of State and Municipal Bonds of Other States (Foreign States) (1) Holders of state and municipal bonds of other states (foreign states) shall determine the gain or loss upon the sale or disposition of the bonds by following the federal rule…

150-316-0525 U.S. Government Interest in Retirement Accounts (1) Interest or dividends on U.S. obligations under ORS 316.680(1)(a) included in distributions from self-employed plans or individual retirement accounts as described under sections 401 to 408 of the Internal Revenue C…

150-316-0530 Pool of Assets that Qualify to Pay State Exempt-Interest Dividends As used in ORS 316.683(1), a “pool of assets” means funds that are managed by financial institutions acting in a fiduciary capacity for the benefit of trust beneficiaries. Financial institutions shall…

150-316-0535 Federal Tax Deduction: Accrual Method of Accounting Required; Deductions Allowable to Cash Basis Taxpayers; Refunds to Be Included (1) Regardless of the method of accounting used by the taxpayer to report income to the federal government and to the State of Oregon, t…

150-316-0537 Adjustment of Federal Tax Liability The federal tax liability accrued shall be the correct federal tax based on all information on the return. If, during processing, the Department recomputes and adjusts the federal tax liability, the adjusted tax shall be the amount…

150-316-0545 Election to Include Child’s Unearned Income — Addition Required An addition to federal taxable income is required for taxpayers who elect to include a minor child’s unearned income on their federal return. For federal purposes, unearned income in excess of a dependen…

150-316-0550 Special Oregon Medical Subtraction (1) Eligible Expenses. Expenses eligible for this subtraction are those authorized under IRC §213. Medical and dental expenses not allowed for this subtraction include expenses: (a) Otherwise deducted in the calculation of Oregon ta…

150-316-0555 Modification of Federal Taxable Income: Itemized vs. Standard Deduction (1) The election of an Oregon taxpayer to itemize or claim a standard deduction is independent of the federal election. Beginning on or after January 1, 1978, a taxpayer may claim the greater of …

150-316-0557 Modification of Federal Taxable Income: Oregon Income Tax Claimed as an Itemized Deduction Beginning in tax year 1991, if the taxpayer itemizes deductions for Oregon, the itemized deductions will be subject to the same phase-out requirement as required for federal in…

150-316-0559 Modification of Federal Taxable Income: Previously Taxed Contributions to Pension or Annuity If part of the contributions toward the purchase of a pension or annuity was taxed by the state of Oregon and not taxed by the federal government, that part taxed by Oregon s…

150-316-0565 Basis of Depreciable Assets Moved into Oregon (1) For purposes of this rule taxpayer means an individual, S corporation, or partnership. (2) Taxpayers not subject to the apportionment provision of ORS 314.280 or 314.605 to 314.675. (a) For Assets First Brought into O…

150-316-0567 Property Subject to Accelerated Cost Recovery System (1)(a) In general, the Accelerated Cost Recovery System (ACRS) is available to recovery property placed in service in tax years beginning on or after January 1, 1985. “Recovery Property” means tangible property of …

150-316-0569 Adjustment to Income for Basis Differences On the return for the first taxable year beginning after December 31, 1995, federal taxable income shall be increased or decreased by an amount equal to the difference between the property’s adjusted federal basis as determi…

150-316-0575 Amount Specially Taxed Under Federal Law to Be Included in Computation of State Taxable Income: Accumulation Distributions (1) Oregon law contains no alternate method of calculating tax in the manner provided by the Internal Revenue Code for the federal tax treatment…

150-316-0580 Definition for Severely Disabled Exemption “Physical or mental condition” means an impairment of the body which is of such gravity as to prevent a person from engaging in normal activity without the aid of special equipment or assistance. Examples of severe disabilit…

150-316-0585 Exemption for Blind and Severely Disabled (1) Oregon allows a personal exemption credit (in the amount determined under ORS 316.085) multiplied by the number of personal exemptions claimed under IRC Section 151. If a taxpayer or spouse qualifies for the additional st…

150-316-0590 Substantiation for Permanently Severely Disabled (1) Upon audit, taxpayers who are permanently severely disabled shall have available a letter from a physician, which substantiates their disability. The letter must: (a) State the nature and extent of the physical dis…

150-316-0595 Exempt Income of Native Americans (1) ORS 316.777 exempts from Oregon taxation certain income earned by an enrolled member of a federally recognized Indian tribe. To qualify under these provisions, at the time the income is earned the tribal member must reside in "In…

150-316-0600 Oregon Investment Advantage Apportionable Income Exemption (1) Definitions. For purposes of ORS 316.778 and this rule, “business firm’s income” has the meaning given the term “apportionable income” in ORS 314.610(1) and OAR 150-314-0335. (2) Computing exempt income. …

150-316-0605 Military Pay Subtraction (1) Definitions. (a) “Uniformed services” refers only to services under the orders of the President of the United States and means the commissioned corps of the National Oceanic and Atmospheric Administration (i.e., the Coast and Geodetic Sur…

150-316-0607 First-time Home Buyer Savings Account (1) An account holder cannot have more than one first-time home buyer savings account at a time, even if the accounts have different beneficiaries. (2) An account holder may withdraw funds from a first-time home buyer savings acc…

150-316-0608 First-time Home Buyer Savings Account – Cost-of-Living Adjustment (1) For tax years beginning after December 31, 2023, for each calendar year, the subtraction limits in ORS 316.800(1) will be adjusted by multiplying each limit amount by a cost-of-living adjustment fo…

150-316-0610 Road Construction Worker’s Travel Expenses (1) As used in ORS 316.806(1), the term “construction job site” includes a roadway. (2) As used in ORS 316.806(2), the term “structure” includes a road or railway. Statutory/Other Authority: ORS 305.100 Statutes/Other Implem…

150-316-0615 Substantiation Required for Construction Worker and Loggers Expenses Upon audit, the taxpayer may be required to provide the same substantiation that would be necessary for a travel expense deduction allowable under IRC 162(a). Statutory/Other Authority: ORS 305.100 …

150-316-0625 (Miscellaneous) Valuation of Forest Land or “Farm Use” Land for Oregon Inheritance Tax Purposes (1) Real property appraised under ORS 308.370 as land for farm use and passing by reason of death, is valued for purposes of Oregon inheritance tax as farm use land and th…

150-316-0630 Scholarship Awards used for Housing Expenses (1) If a scholarship award is used to pay housing expenses, the taxpayer may subtract the amount paid for such expenses from federal taxable income, but not in excess of the amount of the award included in federal taxable …

150-316-0635 Subtraction for Land Contributed to Educational Institutions (1) General. A taxpayer who donates land, or who sells land at less than its fair market value, to a qualified educational institution may claim a subtraction from income. The subtraction is limited to a sp…

150-316-0650 Waiver of Frivolous Return Penalty Imposed Under ORS 316.992 The department will waive 50 percent of the $250 penalty if the taxpayer: (1) Submits a timely written request for waiver as required in OAR 150-305-0068; (2) Files a return for that same tax year that is n…

150-316-0652 Frivolous Return Penalty (1) A $250 penalty shall be assessed if a taxpayer takes a “frivolous position” in respect to preparing the taxpayer’s return. A return is considered frivolous if a taxpayer does not provide information on which the substantial correctness of…

150-316-0662 Voluntary Self-Identification of Race and Ethnicity: Use of Tax Return and Account Information (1) For tax years beginning on or after January 1, 2024, the department must provide a schedule (form), as required under ORS 316.366, for Oregon taxpayers and non-filing O…

150-316-0663 Voluntary Self-Identification of Race and Ethnicity; Policies and Procedures for Filing Schedule (1) The Oregon Department of Revenue will make available an annual schedule which individuals may use to self-identify their race or ethnicity. (a) The schedule will be k…

150-316-0664 Voluntary Self-Identification of Race and Ethnicity; Policies and Procedures on Use and Security of Data (1) Tax preparation software development. To be approved by the department, software vendors must agree to and comply with the requirements outlined in the annual…

150-317-0010 Procedure for Handling State Surplus Refund (1) For purposes of determining underpayment of estimated tax for tax years beginning on or after January 1, 1985 the credit allowed for the state surplus refund shall be used to reduce the amount of the current year “net e…

150-317-0020 Substantial Nexus Guidelines (1) The State of Oregon imposes taxes on or measured by net income to the extent allowed under state statutes, federal Public Law 86-272, and the Oregon and U.S. Constitutions. For purposes of determining whether Oregon has jurisdiction t…

150-317-0030 Definition: “Doing Business” (1) A taxpayer is doing business when it engages in any profit-seeking activity in the State of Oregon. What transaction or transactions need be entered into within this state in the course of such an activity to constitute the doing or c…

150-317-0040 Taxable Income of Regulated Investment Companies and Real Estate Investment Trusts (1) In the case of a corporation that is treated for federal tax purposes as a regulated investment company under IRC Section 851, for purposes of ORS 317.010(10) taxable income under …

150-317-0050 Foreign Corporations Subject to Tax (1) Generally, foreign corporations doing business in Oregon that are exempt from federal income taxes pursuant to treaties between the United States and a foreign country are not exempt from Oregon corporation excise and income ta…

150-317-0060 Capital Losses — Carrybacks and Carry-overs (1) Federal law applies to capital losses. (a) Capital losses are deducted to the extent of capital gains in the same tax year. (b) Capital losses in excess of capital gains must be carried back three tax years. Capital los…

150-317-0070 Administrative and Judicial Interpretations As used in ORS 317.013(2) “administrative and judicial interpretations of the federal income tax law” include interpretive regulations promulgated by the Secretary of the Treasury, Revenue Rulings and Revenue Procedures iss…

150-317-0080 Adoption of Federal Law Generally, Oregon corporation excise tax law, as related to the definition of taxable income, is tied to federal tax law as applicable to the tax year of the taxpayer. Changes enacted to the definition of federal taxable income are effective f…

150-317-0090 Policy — Application of Various Provisions of the Federal Internal Revenue Code (1) The policy of the State of Oregon is to follow the Internal Revenue Code as closely as possible relating to the computation of taxable income of corporations. Other areas, such as tax…

150-317-0100 Periods of Less than 12 Months Are Tax Years (1) Under Oregon’s tie to federal accounting periods, an Oregon return shall cover the same period as the corresponding federal return. See also OAR 150-314-0005. (2) Internal Revenue Code Regulation 1.1502-76 provides tha…

150-317-0110 Tax Reform Act of 1984 Adjustments The rule under OAR 150-316-0020 shall be followed in determining how adjustments due to adoption of effective dates in the federal Tax Reform Act of 1984 shall be reported. Statutory/Other Authority: ORS 305.100 Statutes/Other Imple…

150-317-0120 Farm Capital Gain (1) This rule is effective July 31, 2010 and applies to all tax years open to examination. (2) Definitions. For purposes of ORS 317.063 and this rule: (a) “Substantially complete termination” means the taxpayer is: (A) No longer involved, directly o…

150-317-0130 Tax on Homeowner’s Association Income Homeowners associations, such as condominium management associations and residential real estate management associations, may elect to be treated as tax-exempt organizations for taxable years beginning on and after January 1, 197…