United States

Oregon: Minimum Tax Cannot Be Satisfied by Use of Tax Credits

Aug 10, 2015
From KPMG TaxWatch

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Oregon House Bill 2171, which was signed into law on July 20, 2015, makes certain changes to Oregon’s tax credit statutes. Most significantly, effective for tax years beginning on or after January 1, 2015 and before January 1, 2021, Oregon’s minimum tax can no longer be reduced, satisfied, or paid by use of tax credits.  Recall, in January 2009, Oregon voters approved an initiative that increased Oregon’s minimum corporate excise tax from a flat $10 per taxpayer to a minimum tax based on the taxpayer’s overall Oregon sales. The maximum amount of the revised minimum tax is $100,000 for taxpayers with over $100 million of Oregon-sourced sales. Shortly thereafter, litigation commenced over whether the increased minimum tax could be offset by credits. In 2013, the Oregon Supreme Court held that a taxpayer that purchased a Business Energy Tax Credit could apply the credit against a taxpayer’s minimum tax liability. With this legislation, lawmakers have effectively overturned the court’s decision―at least for the next five tax years. Please contact Rob Passmore at 503-820-6844 with questions on the revised law.

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The following information is not intended to be "written advice concerning one or more federal tax matters" subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230.

The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.