Bill Text: OR HB2541 | 2011 | Regular Session | Enrolled
Bill Title: Relating to inheritance tax; and prescribing an effective date.
Sponsorship: Unknown
Status: (Passed) 2011-06-28 - Chapter 526, (2011 Laws): Effective date September 29, 2011. [HB2541 Detail]
Download: Oregon-2011-HB2541-Enrolled.html
76th OREGON LEGISLATIVE ASSEMBLY--2011 Regular Session
Enrolled
House Bill 2541
Introduced and printed pursuant to House Rule 12.00. Presession
filed (at the request of House Interim Committee on Revenue for
Oregon Law Commission)
CHAPTER ................
AN ACT
Relating to inheritance tax; creating new provisions; amending
ORS 105.645, 111.025, 114.075, 116.083, 116.173, 116.303,
116.343, 118.005, 118.007, 118.010, 118.013, 118.016, 118.100,
118.140, 118.160, 118.171, 118.225, 118.260, 118.280, 118.300,
118.350, 118.525, 129.250, 305.490 and 314.415; repealing ORS
118.009, 118.019, 118.220, 118.240, 118.470, 118.810, 118.820,
118.830, 118.840, 118.855, 118.860, 118.865, 118.870, 118.875
and 118.880 and section 3, chapter 806, Oregon Laws 2003; and
prescribing an effective date.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 118.005 is amended to read:
118.005. As used in ORS 118.005 to 118.840, unless the context
requires otherwise:
(1) 'Beneficiary' means the recipient of a beneficial interest
in property or the income therefrom transferred in a manner
taxable under ORS 118.005 to 118.840.
(2) 'Department' means the Department of Revenue.
(3) 'Director' means the Director of the Department of Revenue.
(4) 'Executor' means the executor, administrator, personal
representative, fiduciary, or custodian of property of the
decedent, or, if there is no executor, administrator, fiduciary
or custodian appointed, qualified and acting, then any person who
is in the actual or constructive possession of any property
includable in the estate of the decedent for
{ - inheritance - } { + estate + } tax purposes whether or not
such estate is subject to administration.
{ + (5) 'Federal taxable estate' means the taxable estate as
determined under subtitle B, chapter 11 of the Internal Revenue
Code. + }
{ - (5) - } { + (6) + } 'Gross estate' has the meaning
given that term in section 2031 of the Internal Revenue Code.
{ - (6) 'Nonresident decedent' means an individual who is
domiciled outside of Oregon at the time of death. - }
{ + (7) 'Oregon taxable estate' means the federal taxable
estate with the adjustments provided by ORS 118.010 (3). + }
{ - (7) - } { + (8) + } 'Passes' includes any case where
for the purposes of ORS 118.005 to 118.840 a taxable transfer
takes place or is deemed to take place.
{ - (8) - } { + (9) + } 'Personal representative' means
personal representative as defined in ORS 111.005.
Enrolled House Bill 2541 (HB 2541-B) Page 1
{ - (9) 'Resident decedent' means an individual who is
domiciled in Oregon at the time of death. - }
{ - (10) 'Transfer' or 'transfer of property' means a
transfer that is subject to the federal estate tax imposed under
subtitle B, chapter 11 of the Internal Revenue Code. - }
SECTION 2. ORS 118.007 is amended to read:
118.007. Any term used in ORS 118.005 to 118.840 has the same
meaning as when used in a comparable context in the laws of the
federal Internal Revenue Code relating to federal estate taxes,
unless a different meaning is clearly required or the term is
specifically defined in ORS 118.005 to 118.840. Any reference in
ORS 118.005 to 118.840 to the Internal Revenue Code means the
federal Internal Revenue Code as amended and in effect on
December 31, { - 2000 - } { + 2010 + }, except where the
Legislative Assembly has specifically provided otherwise.
SECTION 3. ORS 118.010 is amended to read:
118.010. { - (1) A tax is imposed upon a transfer of property
and any interest therein, within the jurisdiction of the state,
whether belonging to the inhabitants of this state or not, which
passes to or vests in any person or persons, or any body or
bodies politic or corporate, in trust or otherwise, or by reason
whereof any person or body politic or corporate shall become
beneficially entitled, in possession or expectation, to any
property or interest therein or income thereof. - }
{ - (2) The tax imposed under this section shall equal the
maximum amount of the state death tax credit allowable against
the federal estate tax under section 2011 of the Internal Revenue
Code. - }
{ + (1) As used in this section:
(a) 'Nonresident decedent' means an individual who is domiciled
outside of Oregon on the date the individual dies.
(b) 'Resident decedent' means an individual who is domiciled in
Oregon on the date the individual dies.
(2) A tax is imposed upon a transfer of the property of each:
(a) Resident decedent; and
(b) Nonresident decedent whose estate includes any interest in:
(A) Real property located in Oregon; or
(B) Tangible personal property located in Oregon.
(3) The Oregon taxable estate to be used for purposes of
computing the tax imposed under this section shall be the federal
taxable estate:
(a) Increased by:
(A) The deduction for state estate, inheritance, legacy or
succession taxes allowable under section 2058 of the Internal
Revenue Code; and
(B) If the decedent is a surviving spouse owning the property
at death, the value of the following property unless included in
the federal taxable estate:
(i) Property for which a deduction for Oregon special marital
property under ORS 118.016 was previously allowed; or
(ii) Property for which a separate Oregon election under
section 2056 or 2056A of the Internal Revenue Code was previously
allowed; and
(b) Reduced by:
(A) The value on the date of the decedent's death of all Oregon
special marital property under ORS 118.013; and
(B) Any other applicable exclusions or deductions.
(4) The tax imposed under this section shall be calculated by
applying the rates in the following table. If the Oregon taxable
estate is at least the amount in column 1, but less than the
Enrolled House Bill 2541 (HB 2541-B) Page 2
amount in column 2, the tax is the amount in column 3, increased
by the excess above the amount in column 1 multiplied by the
percentage in column 4: + }
________________________________________________________________
____NOTE_TO_WEB_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
{ +
1 2 3 4 + }
____NOTE_TO_WEB_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
{ +
$1,500,000 0 10.0%
1,500,2,500,000 50,000 10.25%
2,500,3,500,000 152,500 10.5%
3,500,4,500,000 257,500 11.0%
4,500,5,500,000 367,500 11.5%
5,500,6,500,000 482,500 12.0%
6,500,7,500,000 602,500 13.0%
7,500,8,500,000 732,500 14.0%
8,500,9,500,000 872,500 15.0%
9,500,000 1,022,516.0% + }
____________________________________________________________
END OF POSSIBLE IRREGULAR TABULAR TEXT
____________________________________________________________
________________________________________________________________
{ - (3) - } { + (5) + } In the case of a resident decedent
owning { - property outside of the jurisdiction of this state
at the time of death - } , { + on the date of the decedent's
death, real property located outside Oregon or tangible personal
property located outside Oregon, + } the tax imposed under this
section shall be the amount determined under subsection
{ - (2) - } { + (4) + } of this section multiplied by a ratio.
The numerator of the ratio shall be the sum of the
{ - appraised - } value of the decedent's real property located
in Oregon, tangible personal property located in Oregon and
intangible personal property { - located both in and outside of
Oregon - } . { + The numerator may not include any intangible
personal property subject to a tax imposed, as a result of the
death of the decedent, by another state or country. + } The
denominator of the ratio shall be the total
{ - appraised - } value of the decedent's gross estate.
{ - (4)(a) - } { + (6) + } In the case of a nonresident
decedent owning
{ - property within the jurisdiction of this state at the time
of death - } , { + on the date of the decedent's death, real
property located in Oregon or tangible personal property located
in Oregon, + } the tax imposed under this section shall be the
amount determined under subsection { - (2) - } { + (4) + } of
this section multiplied by a ratio. The numerator of the ratio
shall be the sum of the { - appraised - } value of the
Enrolled House Bill 2541 (HB 2541-B) Page 3
decedent's real property located in Oregon { - , - }
{ + and + } tangible personal property located in Oregon
{ - and intangible personal property located in Oregon - } . The
denominator shall be the total
{ - appraised - } value of the decedent's gross estate.
{ - (b) Intangible personal property of a nonresident
decedent shall not be included in the numerator of the ratio used
to determine the tax under this subsection if a similar exemption
is made by the laws of the state or country of the decedent's
residence in favor of residents of this state. - }
{ - (5) In the case of decedents dying before January 1,
2003, if federal estate tax credits other than the state death
tax credit result in no federal estate tax, no tax shall be
imposed under this section. - }
{ - (6) - } { + (7) + } Payment, in whole or in part, of
{ - inheritance and - } estate taxes from funds of an estate or
trust on any benefit subject to tax under ORS 118.005 to 118.840
is not to be considered { - as - } a further taxable benefit,
when such payment is directed by { + the + } decedent's will or
by a trust agreement.
{ - (7) - } { + (8)(a) + } If the federal taxable estate is
determined by making an election under section { - 2032 or
2056 - } { + 2031(c), 2032, 2032A, 2056 or 2056A + } of the
Internal Revenue Code or another provision of the Internal
Revenue Code, or if a federal estate tax return is not required
under the Internal Revenue Code, { - the Department of Revenue
may adopt rules providing for a separate election for state
inheritance tax purposes. - } { + an executor may make separate
elections for state estate tax purposes under that same
provision.
(b) An executor may make elections under ORS 118.013 and
118.140 and section 2056 of the Internal Revenue Code for state
estate tax purposes.
(c) Elections described in this subsection are irrevocable. + }
SECTION 4. ORS 118.013 is amended to read:
118.013. { - (1) For purposes of computing the tax imposed
under ORS 118.010, the taxable estate to be used for computing
the maximum amount of the state death tax credit allowable under
section 2011 of the Internal Revenue Code shall be the taxable
estate determined for federal estate tax purposes, reduced by the
value on the date of death of the decedent of all Oregon special
marital property in the estate. - }
{ + (1) As used in this section and ORS 118.016, 'permissible
distributee' has the meaning given that term in ORS 130.010. + }
(2) Oregon special marital property consists of any trust or
other property interest, or a portion of a trust or property
interest:
(a) In which principal or income may be accumulated or
distributed to or for the benefit of only the surviving spouse of
the decedent during the lifetime of the surviving spouse;
(b) In which a person may not transfer or exercise a power to
appoint any part of the trust or other property interest to a
person other than the surviving spouse during the lifetime of the
surviving spouse; and
(c) For which the executor of the estate of the decedent has
made the election described in ORS 118.016 (1).
(3) If a trust or other property interest would qualify as
Oregon special marital property under subsection (2) { + + }of
this section except that the trust or other property interest
allows principal or income to be distributed to other persons in
Enrolled House Bill 2541 (HB 2541-B) Page 4
addition to the surviving spouse, the executor may elect to set
aside a share of the trust or other property interest as a
separate share of the trust or property interest or as a separate
trust, which shall qualify as Oregon special marital property if:
(a) The executor makes the election described in ORS 118.016
(1);
(b) Each { - beneficiary who is living at the time the
election is made and who may be entitled to a distribution from
the share during the lifetime of the surviving spouse - }
{ + permissible distributee + } makes the election described in
ORS 118.016 (2);
(c) The surviving spouse makes the election described in ORS
118.016 (2); and
(d) All { - elections - } { + statements of election + }
are attached to the { - inheritance - } { + estate + } tax
return filed with respect to the estate of the decedent, or are
filed or maintained as records as otherwise prescribed by the
Department of Revenue by rule.
SECTION 5. ORS 118.016 is amended to read:
118.016. (1) The executor of an estate containing property that
the executor seeks to qualify as Oregon special marital property
under ORS 118.013 shall make an election under this subsection in
order for the property to be Oregon special marital property. The
election shall be made:
(a) By attaching a statement to the { - inheritance - }
{ + estate + } tax return for the estate of the decedent that
identifies the trust or other property interest that constitutes
Oregon special marital property and that affirms that the
identified property meets the requirements of Oregon special
marital property under ORS 118.013 and will be administered as
required under ORS 118.013; or
(b) In such other manner as the Department of Revenue
prescribes by rule.
(2) For a trust or other property interest described in ORS
118.013 (3), in order for any portion of the trust or other
property interest to be Oregon special marital property, in
addition to the election of the executor described in subsection
(1) of this section, the surviving spouse and each
{ - beneficiary who is living at the time of the election
and - } { + permissible distributee + } who may be eligible for
a distribution from the trust or other property interest
{ - during the lifetime of the surviving spouse - } shall make
an election and { + provide + } written consent that is in
substantially the following form:
_________________________________________________________________
CONSENT TO ESTABLISHMENT OF
OREGON SPECIAL MARITAL PROPERTY
(a) ELECTION TO BE SIGNED BY ALL { - BENEFICIARIES - }
{ + PERMISSIBLE DISTRIBUTEES + } EXCEPT THE SURVIVING SPOUSE:
Each of the undersigned acknowledge and consent to a portion of
the ________ (name of trust or other property interest) being set
aside as a separate share or trust in order to qualify for the
Oregon special marital property election in accordance with ORS
118.013, for the primary purpose of reducing or eliminating the
Oregon { - inheritance - } { + estate + } tax due on the
estate of ________ (name of decedent). The undersigned together
with the surviving spouse constitute all of the persons living on
the date of this election who may be entitled to a distribution
Enrolled House Bill 2541 (HB 2541-B) Page 5
during the lifetime of the surviving spouse from the _______
(name of trust or other property interest). Each of the
undersigned, both on behalf of the undersigned and on behalf of
the unborn lineal descendants of the undersigned, irrevocably
agrees to release all rights to { - distributions from - }
{ + any current interest in + } the Oregon special marital
property during the lifetime of the surviving spouse. Each of the
undersigned agrees that all other provisions of the ______ (name
of trust or other property interest) shall remain in effect and
that, upon the death of the surviving spouse, any remaining
Oregon special marital property shall be distributed as otherwise
provided in the trust or other property interest.
Signature of: ______ ( { - beneficiary - } { + permissible
distributee + })
Signature of: ______ ( { - beneficiary - } { + permissible
distributee + })
(b) ELECTION TO BE SIGNED BY THE SURVIVING SPOUSE: I am the
surviving spouse of ________ (name of decedent). I acknowledge
and consent to a portion of the ________ (name of trust or other
property interest) being set aside as a separate share or trust
in order to qualify as Oregon special marital property under ORS
118.013, for the primary purpose of reducing or eliminating the
Oregon
{ - inheritance - } { + estate + } tax due on the estate of
________ (name of decedent). I, together with all of the other
individuals executing the election in accordance with ORS
118.013, constitute all of the persons living on the date of this
election who { + are permissible distributees or who + } may be
entitled to a distribution from the Oregon special marital
property to which this election applies
{ - and who might be entitled to a distribution during my
lifetime - } . I agree that all other terms, conditions and
provisions that apply to the ________ (name of trust or other
property interest) shall apply to the Oregon special marital
property to which this election applies, and that upon my death,
any remaining Oregon special marital property shall be
distributed as otherwise provided in the trust or other property
interest.
Signature of: ________
(surviving spouse)
SUBSCRIBED AND SWORN TO before me this ___ day of ___, 2___.
__________
Notary Public of Oregon
My commission expires: ______
_________________________________________________________________
(3) Elections made under this section are irrevocable.
(4) The custodial parent or court appointed guardian of a
{ - minor beneficiary - } { + permissible distributee who is
a minor, or any person who is authorized under ORS 130.110,
+ }may sign the election on behalf of the { - minor
beneficiary - } { + permissible distributee + } and the unborn
lineal descendants of the { - minor beneficiary - } { +
permissible distributee + }.
SECTION 6. ORS 118.100 is amended to read:
Enrolled House Bill 2541 (HB 2541-B) Page 6
118.100. (1) The tax provided for in ORS 118.010 shall
{ + take effect at and accrue upon the death of the decedent. A
return shall be filed and the tax shall + } be paid to the
Department of Revenue on the date the federal estate tax is
payable { + or, if no federal estate tax return is required, no
later than nine months following the date of death of the
decedent + }. If { - interest is paid on federal estate tax
installments resulting in a reduction of the federal estate tax,
and - } the department determines, pursuant to an amended return
or refund claim, that the amount of tax imposed by ORS 118.010 is
less than the amount theretofore paid, the excess tax shall be
refunded by the department with interest at the rate established
by ORS 305.220 for each month or fraction thereof during a period
beginning { + 45 days after the due date of the return or + } on
the date the amended return or refund claim is filed { + ,
whichever is later, and ending at + } { - to - } the time the
refund is made.
(2) If the amount of federal estate tax reported on a
{ - United States - } { + federal + } estate tax return is
changed or corrected by the Internal Revenue Service or other
competent authority, resulting in a change in the { - maximum
state death tax credit allowable under the federal estate tax
law - } { + Oregon taxable estate + }, the executor shall
report the change or correction in federal estate tax to the
department. If the federal change or correction results in a
reduction of the { - allowable state death tax credit - } { +
Oregon taxable estate + }, the report of the change or correction
shall be treated by the department as a claim for refund pursuant
to ORS 305.270 and, notwithstanding the limitations of ORS
305.270, shall be deemed timely if filed with the department
within two years after the federal correction was made. If the
change or correction results in an increase in the { - state
death tax credit allowable on the federal estate tax return - }
{ + Oregon taxable estate + }, the department may issue a
notice of deficiency within two years after the federal change or
correction was made or within two years after receiving a report
of the federal change or correction, whichever is the later. Any
executor filing an amended federal estate tax return shall also
file an amended return with the department within 90 days
thereafter.
(3)(a) In the case of an estate that contains property that is
valued under section 2032A of the Internal Revenue Code for
federal estate tax purposes (relating to the valuation of certain
farm or other property) and that ceases to qualify for valuation
under section 2032A, an additional tax under ORS 118.005 to
118.840 shall be imposed { - . The additional tax shall equal
the amount of any increase in the state death tax credit
allowable under section 2011 of the Internal Revenue Code that
is - } { + in the amount + }attributable to the change in the
value of the estate resulting from the imposition of additional
federal estate tax under section 2032A.
(b) The department shall be notified of the disqualification of
the property from valuation under section 2032A in the same time
and manner as the federal Internal Revenue Service is notified of
the disqualification.
(c) The period for assessment of the tax imposed under this
subsection, including any penalty or interest, shall be two years
from the date on which the department receives the notice
described in paragraph (b) of this subsection.
Enrolled House Bill 2541 (HB 2541-B) Page 7
(d) The other provisions of ORS 118.005 to 118.840 and ORS
chapter 305 shall apply to the additional tax imposed under this
subsection in the same manner in which those provisions apply to
the tax imposed under ORS 118.010.
(4) For purposes of this section, a change or correction of a
{ - United States - } { + federal + } estate tax return is
deemed to be made on the date of the federal audit report.
(5) The executor shall, upon request of the department, supply
a copy of the { - United States - } { + federal + } estate
tax return which the executor has filed or may file with the
federal government, or a copy of any federal agent's report upon
any audit or adjustment of the { - United States - } { +
federal + } estate tax return.
{ + (6) The executor shall explain, on the return, how the
reported values were determined and attach copies of any
appraisals. + }
SECTION 7. ORS 118.140 is amended to read:
118.140. { - (1) As used in this section, 'natural resource
property' means real property as defined in ORS 307.010 that at
the decedent's death: - }
{ - (a) Is in farm use, as defined in ORS 308A.056, or is
used as one or more farm use homesites, as defined in ORS
308A.250, related to that real property; or - }
{ - (b) Is used as forestland, as defined in ORS 321.201, or
is used as one or more forestland homesites, as defined in ORS
308A.250, related to that real property, not to exceed 5,000
acres. - }
{ - (2)(a) A credit against the taxes otherwise due under ORS
118.005 to 118.840 shall be allowed based upon the value of the
following property: - }
{ - (A) Natural resource property. - }
{ - (B) If the decedent or a person described in subsection
(3)(c) of this section was licensed under ORS chapter 508,
property that is: - }
{ - (i) Used in the conduct of a fishing business as defined
in section 1301(b)(4) of the Internal Revenue Code, including
boats, gear, equipment, vessel licenses and permits and
commercial fishing licenses and permits; or - }
{ - (ii) Used to process and sell the catch of a commercial
fishing business in fresh, canned or smoked form directly to
consumers, including a restaurant with seating capacity of less
than 15 seats at which catch from the fishing business is
prepared and sold. - }
{ - (C) Tangible and intangible personal property devoted to
use as a farm or used for farm or forestry purposes,
including: - }
{ - (i) Timber, trees and improvements; - }
{ - (ii) Crops, both growing and stored; and - }
{ - (iii) Forestry and farming equipment. - }
{ - (D) Working capital of a farm, natural resource-based
business or fishing business owned by the decedent at the
decedent's death. - }
{ - (b) A taxpayer may: - }
{ - (A) Elect not to claim the credit allowed under this
section; - }
{ - (B) Elect to claim less than the full amount of the
credit allowed under this section; or - }
{ - (C) Elect to claim the credit only for the value of
certain assets. - }
Enrolled House Bill 2541 (HB 2541-B) Page 8
{ - (c) If the value of property for which the credit allowed
under this section is claimed is at least the amount in column 1,
but less than the amount in column 2, the credit is the amount in
column 3, increased by the excess above the amount in column 1
multiplied by the percentage in column 4: - }
? _____________________________________________________________ ?
____NOTE_TO_WEB_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
1 2 3 4
____NOTE_TO_WEB_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
$0 $100,000 $0
100,000 150,000 0 0.8%
150,000 200,000 400 1.6%
200,000 300,000 1,200 2.4%
300,000 500,000 3,600 3.2%
500,000 700,00010,000 4.0%
700,000 900,00018,000 4.8%
900,000 1,100,00027,600 5.6%
1,100,001,600,00038,800 6.4%
1,600,002,100,00070,800 7.2%
2,100,002,600,00106,800 8.0%
2,600,003,100,00146,800 8.8%
3,100,003,600,00190,800 9.6%
3,600,004,100,00238,800 10.4%
4,100,005,100,00290,800 11.2%
5,100,006,100,00402,800 12.0%
6,100,007,100,00522,800 12.8%
7,100,007,500,00650,800 13.6%
7,500,008,100,00402,800 13.0%
8,100,009,100,00253,344 12.5%
9,100,010,100,00146,800 12.0%
10,100,11,100,00035,400 11.2%
11,100,12,100,00015,520 7.7%
12,100,13,100,000 8,000 5.7%
13,100,14,100,000 0 3.7%
14,100,15,100,000 0 1.7%
15,100,000 0 0%
____________________________________________________________
END OF POSSIBLE IRREGULAR TABULAR TEXT
____________________________________________________________
? _____________________________________________________________ ?
{ + (1) As used in this section:
(a) 'Adjusted gross estate' means the value of the gross estate
reduced by the sum of the amounts allowable under sections 2053
and 2054 of the Internal Revenue Code.
(b) 'Family member' means a member of the family, as defined in
section 2032A of the Internal Revenue Code, of the decedent.
(c) 'Farm business' means a business operated for the primary
purpose of obtaining a profit in money by:
Enrolled House Bill 2541 (HB 2541-B) Page 9
(A) Raising, harvesting or selling fruit or crops;
(B) Feeding, breeding, managing or selling livestock, poultry,
fur-bearing animals or bees, or the produce thereof;
(C) Dairying and selling dairy products;
(D) Breeding, stabling or training equines;
(E) Propagating, cultivating, maintaining or harvesting aquatic
species, birds or animal species to the extent allowed by the
rules adopted by the State Fish and Wildlife Commission;
(F) Raising nursery stock;
(G) Practicing animal husbandry; or
(H) Raising other agricultural or horticultural products.
(d) 'Farm use' has the meaning given that term in ORS 308A.056.
(e) 'Fishing business' has the meaning given that term in
section 1301(b)(4) of the Internal Revenue Code.
(f) 'Forestland' has the meaning given that term in ORS
321.201.
(g) 'Forestry business' means a business operated for the
primary purpose of obtaining a profit in money by the planting,
cultivating, caring for, preparing, harvesting or cutting of
timber or trees for market.
(h) 'Homesite' has the meaning given that term in ORS 308A.250.
(i) 'Natural resource property' means the following property,
if on the date of the decedent's death the property is owned by
the decedent and used in the operation of a farm business,
forestry business or fishing business owned by the decedent:
(A) Real property used as forestland or as forestland
homesites, not to exceed 5,000 acres, or that is in farm use.
(B) Timber or trees.
(C) Crops, fruit or other horticultural products, both growing
and stored.
(D) Forestry business or farm business equipment.
(E) Livestock, poultry, fur-bearing animals, bees, dairying
animals, equines, aquatic species, birds or other animal species,
including stored products or by-products.
(F) Nursery stock as defined in ORS 571.005.
(G) Boats, gear, equipment, vessel licenses or permits,
commercial fishing licenses or permits and other real or personal
property used in the operation of a fishing business.
(H) Real or personal property used to process and sell the
catch of a fishing business in fresh, canned or smoked form
directly to consumers, including a restaurant with seating
capacity of fewer than 15 seats at which catch from the fishing
business is prepared and sold.
(I) An operating allowance.
(J) Any other tangible and intangible personal property used in
the operation of a farm business, forestry business or fishing
business.
(j) 'Operating allowance' means cash or a cash equivalent that
is spent, maintained, used or available for the operation of a
farm business, forestry business or fishing business and not
spent or used for any other purpose.
(k) 'Qualified beneficiary' has the meaning given that term in
ORS 130.010.
(L) 'Real property' means real property, as defined in ORS
307.010, that is in this state.
(2)(a) An estate shall be allowed a credit for the value of
natural resource property claimed. Any operating allowance
claimed under this section may not exceed the lesser of $1
million or 15 percent of the total value of natural resource
property claimed, not including the operating allowance.
Enrolled House Bill 2541 (HB 2541-B) Page 10
(b) The credit allowed under this section shall be computed by
multiplying the tax that would be payable under this chapter
absent the credit by a ratio, the numerator of which is an amount
equal to the lesser of the amount of natural resource property
claimed under this section or $7.5 million, and the denominator
of which is an amount equal to the total adjusted gross estate.
(c) An executor may:
(A) Elect not to claim the credit allowed under this section;
(B) Elect to claim less than the full amount of the credit
allowed under this section; or
(C) Elect to claim the credit only for the value of certain
assets. + }
(3) Except as provided in subsections { - (4) and (5) - }
{ + (4), (7) and (8) + }of this section, a credit is allowed
under this section only if:
(a) The total adjusted gross estate does not exceed $15
million;
(b) The total value of { - property for which the credit
established under this section is allowable - } { + natural
resource property in the estate + } is at least 50 percent of the
total adjusted gross estate;
(c) The { + natural resource + } property is transferred to a
{ - member of the family, as that term is defined in section
2032A of the Internal Revenue Code, or the registered domestic
partner, of the decedent - } { + family member + }; and
(d) During an aggregate period of five out of the eight years
ending on the date of the decedent's death, the decedent { - , a
member of the decedent's family or the decedent's registered
domestic partner owned the property and the property was devoted
to use as a farm or used for farm or forest purposes - } { + or
a family member operated a farm business, forestry business or
fishing business and the property for which a credit is claimed
under this section is part of the business + }.
(4) Property that otherwise meets the requirements of this
section shall be allowed a credit under this section if:
(a) The property is the subject of a net cash lease to or from
the decedent or a { - transferee described in subsection (3)(c)
of this section - } { + qualified beneficiary who is a family
member + };
{ - or - }
(b) The property is held in trust for a { - person described
in subsection (3)(c) of this section. - } { + qualified
beneficiary who is a family member; or
(c) The property replaces natural resource property, and the
replacement property would otherwise meet the definition of
natural resource property except that it was acquired after the
date of the decedent's death but before the estate tax return is
filed. In order to qualify under this paragraph, real property
must be replaced with real property.
(5) A credit is allowed under this section for the following
real property only if the real property was owned by the decedent
or a family member during an aggregate period of five out of the
eight years ending on the date of the decedent's death and used
in a business described in subsection (3)(d) of this section:
(a) Real property used as forestland or as forestland
homesites, not to exceed 5,000 acres.
(b) Real property used in farm use.
(6) A credit is allowed under this section for property used in
the operation of a fishing business only if the decedent or a
Enrolled House Bill 2541 (HB 2541-B) Page 11
family member, during an aggregate period of five out of the
eight years ending on the date of the decedent's death:
(a) Owned a vessel used in taking food fish or shellfish for
commercial purposes as defined in ORS 506.006;
(b) Held a boat license as provided in ORS 508.260;
(c) Held a commercial fishing license under ORS 508.235; and
(d) Held one or more restricted fisheries permits as provided
in ORS chapter 508 or an equivalent restricted vessel permit
system under the laws of another state.
(7) For the purpose of meeting the requirements of subsection
(5) of this section, in determining the period of time during
which the decedent or a family member owned real property
received in exchange under section 1031 of the Internal Revenue
Code or acquired in an involuntary conversion under section 1033
of the Internal Revenue Code, the period during which the
decedent or a family member owned the exchanged or acquired real
property, if the exchanged or acquired real property was used in
the farm business or forestry business, may be included. + }
{ - (5) - } { + (8) + } Property that otherwise meets the
requirements of this section and that is owned indirectly by the
decedent or a
{ - member of the family described in subsection (3)(c) of this
section, or the registered domestic partner, of the decedent
shall qualify for a credit - } { + family member qualifies for
a credit + } under this section if the property is owned through
an interest in a limited liability company or in a corporation,
partnership or trust as the terms corporation, partnership or
trust are used in section 2032A(g) of the Internal Revenue Code.
In order to qualify
{ - for a credit - } under this subsection, at least one
{ - member of the family, or the registered domestic partner, of
the decedent - } { + family member + }must materially
participate in the business after the transfer. For purposes of
this subsection, 'materially participate' means to engage in
active management, as defined in section 2032A of the Internal
Revenue Code, of { - natural resource property or a - }
{ + the farm business, forestry business or + } fishing
business. The Department of Revenue may adopt rules to administer
this subsection consistent with this definition.
{ - (6) Property that otherwise meets the requirements of
this section and is involuntarily converted, as that term is used
in section 1033 of the Internal Revenue Code, shall qualify for a
credit under this section if the proceeds of conversion are used
to acquire replacement property, the cost of which equals or
exceeds the amount realized on the conversion. The replacement
property must also meet the requirements of this section. - }
{ - (7)(a) An additional tax under ORS 118.005 to 118.840
shall be imposed if property for which a credit is allowed under
this section is not used in commercial fishing operations or as
natural resource property for at least five out of the eight
calendar years following the decedent's death or is disposed of
by the transferee other than by disposition to another member of
the family, or the registered domestic partner, of the decedent
or to another entity eligible for the credit allowed under this
section. Property that otherwise meets the requirements of this
section and is conveyed after the decedent's death as a qualified
conservation contribution, as that term is defined in section
170(h) of the Internal Revenue Code, shall continue to qualify
for a credit under this section. - }
Enrolled House Bill 2541 (HB 2541-B) Page 12
{ + (9)(a) A disposition shall occur and an additional tax
under ORS 118.005 to 118.840 shall be imposed if the natural
resource property for which a credit is allowed under this
section is not used in the operation of a farm business, forestry
business or fishing business for at least five out of the eight
calendar years following the decedent's death or is transferred
to a person other than a family member or another entity eligible
for the credit allowed under this section.
(b) The use of cash or other assets for which a credit is
claimed under this section for the payment of federal estate
taxes or state inheritance or estate taxes shall be a disposition
and an additional tax shall be imposed under this subsection.
(c) The conveyance after the decedent's death of property that
otherwise meets the requirements of this section and is conveyed
as a qualified conservation contribution, as defined in section
170(h) of the Internal Revenue Code, is not a disposition
requiring payment of additional tax under this subsection.
(d) Natural resource property may be replaced with real
property or personal property after the credit is claimed and not
result in a disposition subject to an additional tax if the
replacement property is used in the operation of the farm
business, forestry business or fishing business. Real property
for which a credit is claimed under this section may be replaced
only with real property that would otherwise qualify as natural
resource property and that replacement must be made within one
year to avoid a disposition and additional tax, except that a
replacement of property that is involuntarily converted under
section 1033 of the Internal Revenue Code must occur within two
years. + }
{ - (b) - } { + (e) + } The additional tax liability shall
be the amount of
{ - the credit allowed on - } { + additional tax that would
have been imposed, had + } the disqualified property { + not
been included in the numerator of the ratio in subsection (2)(b)
of this section, + } multiplied by ((five minus the number of
years the property was used as natural resource property) divided
by five). The additional tax liability { - shall be - }
{ + is + } the responsibility of the owner of the property at
the time of the disposition or disqualifying event { + and is
due within six months after the date on which the disposition or
event occurs. The Department of Revenue may establish by rule
procedures for reporting the additional tax due, consistent with
ORS chapter 305 + }.
{ - (c) - } { + (f) + } Prior to the { - transfer of
property under this section - } { + executor's identification
of property for which a credit under this section is claimed + },
the executor shall notify the transferee of the potential for tax
consequences to the transferee if the transferee fails to meet
the conditions of paragraph (a) of this subsection. The
transferee's written acknowledgment of this notice shall be
attached to the { - inheritance - } { + estate + } tax
return.
{ - (8) The department shall adopt rules consistent with
those adopted under the Internal Revenue Code to administer this
section. - }
{ + (10) The executor shall identify property for which a
credit under this section is claimed, by asset, on a form
prescribed by the department and filed with the estate tax
return. Transferees of property for which a credit under this
section has been claimed shall file a report with the department
Enrolled House Bill 2541 (HB 2541-B) Page 13
on a form prescribed by the department. This report shall be
filed annually until the requirements of subsection (9)(a) of
this section are met and shall require tracking of each asset for
which the credit has been claimed, with confirmation that each
asset falls into one of the following categories:
(a) The asset is still used in the operation of a farm
business, forestry business or fishing business;
(b) The asset has been replaced with property that meets the
requirements of subsection (9)(d) of this section; or
(c) The asset has been subject to a disposition under
subsection (9) of this section, resulting in additional tax. + }
SECTION 8. ORS 118.160 is amended to read:
118.160. (1) Except as provided in subsection (2) of this
section:
(a) An inheritance tax return is not required with respect to
the estates of decedents { - dying - } { + who die + } on or
after January 1, 1987, and before January 1, 2003, unless a
federal estate tax return is required to be filed; { - and - }
(b) An inheritance tax return is not required with respect to
the estates of decedents { - dying - } { + who die + } on or
after:
(A) January 1, 2003, and before January 1, 2004, unless the
value of the gross estate is $700,000 or more;
(B) January 1, 2004, and before January 1, 2005, unless the
value of the gross estate is $850,000 or more;
(C) January 1, 2005, and before January 1, 2006, unless the
value of the gross estate is $950,000 or more; or
(D) January 1, 2006, { + and before January 1, 2012, + }
unless the value of the gross estate is $1 million or more
{ - . - } { + ; and
(c) An estate tax return is not required with respect to the
estates of decedents who die on or after January 1, 2012, unless
the value of the gross estate is $1 million or more. + }
(2) In every estate, whether or not subject to administration
and whether or not a federal estate tax return is required to be
filed, the executor shall at such times and in such manner as
required by rules of the Department of Revenue, file with the
department a return in a form provided by the department setting
forth a list and description of all transfers of property, in
trust or otherwise, made by the decedent in the lifetime of the
decedent as a division or distribution of the estate of the
decedent { - made within the three-year period ending on the
date of death or intended to take effect at or after death - }
and any further data that the department requires to determine
{ - inheritance - } { + estate + } tax under this chapter.
SECTION 9. ORS 118.171 is amended to read:
118.171. The provisions of ORS chapter 305 as to the audit and
examination of reports and returns, determination of
deficiencies, assessments, claims for refund, conferences and
appeals to the Oregon Tax Court, and the procedures relating
thereto, shall apply to the determination of
{ - inheritance - } { + estate + } taxes under this chapter,
except where the context requires otherwise.
SECTION 10. ORS 118.225 is amended to read:
118.225. (1) Upon application of the executor and the securing
of all taxes that are payable by bond, deposit or other good
collateral acceptable to the Department of Revenue, the
department may extend the time for payment of any part of the
amount imposed by ORS 118.005 to 118.840.
Enrolled House Bill 2541 (HB 2541-B) Page 14
(2) The extension under this section shall be for a period not
in excess of 14 years from the date prescribed by ORS
{ - 118.220 - } { + 118.100 + } for payment of the tax.
(3) Under rules prescribed by the department, the department
may extend the time for the payment of any deficiency of a tax
imposed by ORS 118.005 to 118.840 for a reasonable period not to
exceed four years from the date otherwise fixed for the payment
of the deficiency.
SECTION 11. ORS 118.260 is amended to read:
118.260. (1) If no return has been filed as required by this
chapter, there shall be added to the amount of tax required to be
shown on the return a delinquency penalty of five percent of the
amount of such tax.
(2) If the failure to file a return continues for a period in
excess of three months after the due date, there shall be added
to the amount of tax required to be shown as tax on the return a
failure to file penalty of 20 percent of the amount of such tax.
This penalty is in addition to the delinquency penalty imposed by
subsection (1) of this section.
(3) If any part of any deficiency is due to fraud with intent
to evade tax, then 100 percent of the total amount of the
deficiency shall be assessed and collected.
(4) Except for a deferral of payment pursuant to an extension
granted under ORS 118.225 or a timely election made under ORS
118.300, if the taxes imposed by ORS 118.005 to 118.840 are not
paid on or before the date on which payment of the tax is
required to be made under ORS { - 118.220 - } { +
118.100 + }, there shall be added to the amount of tax required
to be shown on the return a delinquency penalty of five percent
of the amount of such tax.
(5)(a) Except as provided in subsection (6) of this section and
paragraph (b) of this subsection, if the tax imposed by ORS
118.005 to 118.840 is not paid on or before the date on which
payment of the tax is required to be made under ORS
{ - 118.220 - } { + 118.100 + }, interest shall be charged and
collected thereon at the rate established under ORS 305.220 for
each month or fraction thereof from the time when the tax became
due and payable.
(b) If payment of the tax or deficiency is extended under ORS
118.225, interest shall be charged and collected on any amount
for which extension is granted from the date the tax or
deficiency is otherwise due and payable to the date of payment at
the rate established under ORS 305.220 { + , without regard to
ORS 305.222, + } for each month or fraction thereof.
(6) In all cases in which a bond is given, under the provisions
of ORS 118.300, interest shall be charged at the rate established
under ORS 305.220 { + , without regard to ORS 305.222, + } for
each month or fraction thereof from the time when the tax became
due and payable, until the date of payment.
(7) If the tax has not been determined, a deposit may be made
to avoid interest. Should the amount of such payment exceed the
sum subsequently determined to be due, the Department of Revenue
shall refund the excess { + with interest at the rate
established under ORS 305.220, for each month or fraction of a
month during a period beginning 45 days after the due date of the
return or the date that the return is filed, whichever is later,
and ending at the time the refund is made + }.
(8) Payments made on the tax shall be applied first to penalty
and interest and then to the principal.
Enrolled House Bill 2541 (HB 2541-B) Page 15
(9) For purposes of this section, the amount of tax required to
be shown on the return shall be reduced by the amount of any part
of the tax which is paid on or before the date prescribed for
payment of the tax and by the amount of any credit against the
tax which may be lawfully claimed upon the return.
SECTION 12. ORS 118.280 is amended to read:
118.280. (1) Every executor, administrator or trustee has power
to sell as much of the property embraced in any inheritance,
devise, bequest or legacy, as will enable the executor,
administrator or trustee to pay the tax imposed by ORS 118.005 to
118.840, in the same manner as the executor, administrator or
trustee is authorized to do for the payment of the debts of a
decedent.
(2) Any part of the gross estate sold for the payment of claims
against the estate and expenses of administration, for the
payment of the tax imposed by ORS 118.005 to 118.840, or for
purposes of distribution, shall be divested of the lien of such
tax, and such lien shall be transferred to the proceeds of such
sale. A mortgage on property executed for payment of claims
against the estate and expenses of administration and for payment
of the tax imposed by ORS 118.005 to 118.840 shall constitute a
lien upon said property prior and superior to the
{ - inheritance - } { + estate + } tax lien, which
{ - inheritance - } { + estate + } tax lien shall attach to
the proceeds of such mortgage.
SECTION 13. ORS 118.300 is amended to read:
118.300. Any { - person or corporation beneficially
interested in - } { + beneficiary of + } any property
chargeable with a tax under this chapter and personal
representatives and trustees, may elect, on or before the date on
which the { - inheritance - } { + estate + } tax is due and
payable under ORS { - 118.220 - } { + 118.100 + }, not to pay
the tax until the person or persons beneficially interested
therein shall come into actual possession or enjoyment thereof.
If it is personal property, the person or persons so electing
shall give a bond or irrevocable letter of credit to the state in
double the amount of the tax, with such sureties or issued by
such insured institution as defined in ORS 706.008 as the
Director of the Department of Revenue may approve, conditioned
for the payment of the tax and interest thereon, at such time and
period as the person or persons beneficially interested therein
may come into actual possession or enjoyment of the property,
which bond shall be executed and filed, and a full return of the
property made to the Director of the Department of Revenue within
six months from the date of transfer thereof, as in this section
provided. The bond or letter of credit must be renewed every five
years.
SECTION 14. ORS 118.350 is amended to read:
118.350. (1) Whenever an estate, devise, legacy or beneficial
interest therein, charged or sought to be charged with the
{ - inheritance - } { + estate + } tax is of such nature or
is so disposed that the liability of the same is doubtful, or the
value thereof cannot with reasonable certainty be ascertained
under the provisions of law, the Department of Revenue may
compromise with the beneficiaries or representatives of such
estate, and { - compound - } { + determine + } the tax
{ - thereon - } . The payment of the amount of the taxes so
agreed upon shall discharge the lien against the property of the
estate.
Enrolled House Bill 2541 (HB 2541-B) Page 16
(2) In any suit or action involving the title to real property,
in which it appears, by the pleadings or otherwise, that an
{ - inheritance - } { + estate + } tax is or might be payable
to the State of Oregon by reason of the death of any person whose
estate has not been administered in Oregon, { - the circuit
court shall direct that - } a copy of the pleadings { - in such
cause - } { + shall + } be served upon the Department of
Revenue, such service to be made as summons is served in any
cause in the circuit court of this state. Thereupon further
proceedings in the cause shall be suspended until the department
has had an opportunity to appear therein, such appearance to be
made within the time that is required by the service of summons
upon a private person or corporation. The department shall appear
in the cause and present the claims of the state, if any, to an
{ - inheritance - } { + estate + } tax, and it is the duty of
the Attorney General of the state to represent the state and the
department in such proceedings, and the department may compromise
and compound the tax claimed to be due upon the passing of such
real property. Such settlement and compromise shall be entered of
record in the register of such court. Thereafter the payment of
the amount of taxes so agreed upon shall discharge the
{ - inheritance - } { + estate + } tax lien against the
property. If a compromise is not effected, the amount of tax, if
any, due upon the passing of the real property shall be
determined by the court as are other questions involved in such
litigation, and subject to the same right of appeal to the Court
of Appeals. The judgment of the court or of the Court of Appeals,
if there is an appeal, is conclusive as to the amount of taxes
due upon the passing of the real property and payment thereof
shall discharge the lien against the property.
SECTION 15. ORS 118.525 is amended to read:
118.525. (1) It shall be unlawful for the Department of Revenue
or any of its officers or employees to divulge or make known in
any manner any particulars disclosed in any return or supporting
data required under this chapter. Except for executors or
beneficiaries and their authorized representatives, it shall be
unlawful for any person or entity who has acquired information
pursuant to subsections (3) and (4) of this section to divulge or
make known such information for any purpose other than that
specified in the provisions of law authorizing the use or
disclosure. No subpoena or judicial order shall be issued
compelling the department, or its officers or employees, or
persons described in subsections (3) and (4) of this section, to
divulge or make known any particulars disclosed in any such
return or supporting data except where the liability for
{ - inheritance - } { + estate + } taxes is to be adjudicated
by the Oregon Tax Court. Nothing in this section shall prohibit
the publication of statistics so classified as to prevent the
identification of particulars in any return or supporting data
covered by this section.
(2) As used in this section:
(a) 'Officer,' 'employee' or 'person' includes an authorized
representative of the officer, employee or person, or former
officer, employee or person, or an authorized representative of
such former officer, employee or person.
(b) 'Particulars' includes, but is not limited to, a taxpayer's
name, address, telephone number, Social Security number and the
amount of refund claimed by or granted to a taxpayer.
(3) Notwithstanding subsection (1) of this section, the
department may permit, for tax purposes only, the Commissioner of
Enrolled House Bill 2541 (HB 2541-B) Page 17
Internal Revenue or authorized representatives, or an officer or
employee of any state or the District of Columbia which has a
provision of law which meets the requirements of any applicable
provision of the Internal Revenue Code as to confidentiality to
inspect any return or supporting data referred to in subsection
(1) of this section. The department may disclose to the executor
or beneficiary of any estate, or an authorized representative
thereof, any information or particulars otherwise made
confidential by this section, if the department determines that
the executor or beneficiary has a material interest which will be
affected by such information or particulars.
(4) The department may disclose a taxpayer's name, address,
telephone number, Social Security number, refund amount or tax
due to the extent necessary in connection with collection
activities or the processing or mailing of returns,
correspondence or forms with respect to the tax imposed under
this chapter.
(5) The department also may disclose and give access to
information described in subsection (1) of this section to those
persons, agencies or entities, described in ORS 314.840 (2)(e),
(f), (g) and (h) to the extent authorized by said paragraphs; and
to any agency of the State of Oregon or any person, or any
officer or employee of such agency or person to whom disclosure
or access is given by state law and not otherwise referred to in
this section, including but not limited to the Secretary of State
and the officers and employees thereof, for the uses and purposes
described in ORS 297.060.
(6) Each officer or employee of the department and each person
described or referred to in subsection (5) of this section to
whom disclosure or access to tax information is given, prior to
beginning employment or the performance of duties involving such
disclosure or access, shall be advised in writing of the
provisions of subsection (1) of this section and ORS 118.990 (3),
and shall as a condition of employment or performance of duties
execute a certificate for the department, stating in substance
that the person has read these provisions of law, that the person
has had them explained and that the person is aware of the
penalties for the violation of subsection (1) of this section.
SECTION 16. ORS 105.645 is amended to read:
105.645. Notwithstanding any other provision of ORS 105.623 to
105.649, if as a result of a disclaimer or transfer the
disclaimed or transferred interest is treated pursuant to the
provisions of the Internal Revenue Code and the regulations
promulgated under that code, as in effect on { - January 1,
2002, - } { + December 31, 2010, + } as never having been
transferred to the disclaimant, then the disclaimer or transfer
is effective as a disclaimer under ORS 105.623 to 105.649.
SECTION 17. ORS 111.025 is amended to read:
111.025. For purposes of ORS chapters 111 to 116, the Oregon
Tax Court is not a court having probate jurisdiction and is
limited to the trial of appeals on inheritance { + or estate + }
tax matters.
SECTION 18. ORS 114.075 is amended to read:
114.075. Subject to the limitations imposed by ORS 114.065,
provision for support under ORS 114.015 ordered by the court has
priority over claims and expenses of administration. The
provision
{ - shall - } { + is + } not { - be - } charged against
the distributive share of the person receiving support. The
provision { - shall be - } { + is + } treated as an expense
Enrolled House Bill 2541 (HB 2541-B) Page 18
of administration, but { - shall - } not { - be - }
{ + as + } a deduction for { - inheritance - }
{ + estate + } tax purposes.
SECTION 19. ORS 116.083 is amended to read:
116.083. (1) A personal representative shall make and file in
the estate proceeding an account of the personal representative's
administration:
(a) Unless the court orders otherwise, annually within 60 days
after the anniversary date of the personal representative's
appointment.
(b) Within 30 days after the date of the personal
representative's removal or resignation or the revocation of the
personal representative's letters.
(c) When the estate is ready for final settlement and
distribution.
(d) At such other times as the court may order.
(2) Each account must include the following information:
(a) The period of time covered by the account.
(b) The total value of the property with which the personal
representative is chargeable according to the inventory, or, if
there was a prior account, the amount of the balance of the prior
account.
(c) All money and property received during the period covered
by the account.
(d) All disbursements made during the period covered by the
account. Vouchers for disbursements must accompany the account,
unless otherwise provided by order or rule of the court, or
unless the personal representative is a trust company that has
complied with ORS 709.030, but that personal representative
shall:
(A) Maintain the vouchers for a period of not less than one
year following the date on which the order approving the final
account is entered;
(B) Permit interested persons to inspect the vouchers and
receive copies thereof at their own expense at the place of
business of the personal representative during the personal
representative's normal business hours at any time prior to the
end of the one-year period following the date on which the order
approving the final account is entered; and
(C) Include in each annual account and in the final account a
statement that the vouchers are not filed with the account but
are maintained by the personal representative and may be
inspected and copied as provided in subparagraph (B) of this
paragraph.
(e) The money and property of the estate on hand.
(f) Such other information as the personal representative
considers necessary to show the condition of the affairs of the
estate or as the court may require.
(g) A declaration under penalty of perjury in the form required
by ORCP 1 E.
(3) When the estate is ready for final settlement and
distribution, the account must also include:
(a) A statement that all Oregon income { + taxes + },
inheritance { + or estate taxes + } and personal property taxes,
if any, have been paid, or if not so paid, that payment of those
taxes has been secured by bond, deposit or otherwise, and that
all required tax returns have been filed.
(b) A petition for a judgment authorizing the personal
representative to distribute the estate to the persons and in the
portions specified therein.
Enrolled House Bill 2541 (HB 2541-B) Page 19
(4) If the distributees consent thereto in writing and all
creditors of the estate have been paid in full other than
creditors owed administrative expenses that require court
approval, the personal representative, in lieu of the final
account otherwise required by this section, may file a statement
that includes the following:
(a) The period of time covered by the statement.
(b) A statement that all creditors have been paid in full other
than creditors owed administrative expenses that require court
approval.
(c) The statement and petition referred to in subsection (3) of
this section.
(d) A declaration under penalty of perjury in the form required
by ORCP 1 E.
(5) Notice of time for filing objections to the statement
described in subsection (4) of this section is not required.
(6) The Chief Justice of the Supreme Court may by rule specify
the form and contents of accounts that must be filed by a
personal representative.
SECTION 20. ORS 116.173 is amended to read:
116.173. (1) Upon application to the court a personal
representative is entitled to receive compensation for services
as provided in this section. If there is more than one personal
representative acting concurrently, the compensation shall not be
increased, but may be divided among them as they agree or as the
court may order. The compensation is a commission upon the whole
estate, as follows:
(a) Upon the property subject to the jurisdiction of the court,
including income and realized gains:
(A) Seven percent of any sum not exceeding $1,000.
(B) Four percent of all above $1,000 and not exceeding $10,000.
(C) Three percent of all above $10,000 and not exceeding
$50,000.
(D) Two percent of all above $50,000.
(b) One percent of the property, exclusive of life insurance
proceeds, not subject to the jurisdiction of the court but
reportable for Oregon inheritance { + or estate + } tax or
federal estate tax purposes.
(2) In all cases, further compensation as is just and
reasonable may be allowed by the court for any extraordinary and
unusual services not ordinarily required of a personal
representative in the performance of duties as a personal
representative.
(3) When a decedent by will has made special provision for the
compensation of a personal representative, the personal
representative is not entitled to any other compensation for
services unless prior to appointment the personal representative
signs and files with the clerk of the court a written
renunciation of the compensation provided by the will.
SECTION 21. ORS 116.303 is amended to read:
116.303. As used in ORS 116.303 to 116.383:
(1) 'Estate' means the gross estate of a decedent as determined
for the purpose of federal estate tax and the
{ - inheritance - } { + estate + } tax payable to this state
under ORS 118.005 to 118.840.
(2) 'Person' means any individual, partnership, association,
joint stock company, corporation, government, political
subdivision, governmental agency or local governmental agency.
(3) 'Person interested in the estate' means any person entitled
to receive, or who has received, from a decedent or by reason of
Enrolled House Bill 2541 (HB 2541-B) Page 20
the death of a decedent any property or interest therein included
in the decedent's estate. It includes a personal representative,
guardian, conservator or trustee.
(4) 'State' means any state, territory or possession of the
United States, the District of Columbia or the Commonwealth of
Puerto Rico.
(5) 'Tax' means the federal estate tax and the
{ - inheritance - } { + estate + } tax payable to this state
under ORS 118.005 to 118.840, and interest and penalties imposed
in addition to the tax.
SECTION 22. ORS 116.343 is amended to read:
116.343. (1) In making an apportionment, allowances shall be
made for any exemptions granted, any classification made of
persons interested in the estate and any deductions and credits
allowed by the law imposing the tax.
(2) Any exemption or deduction allowed by reason of the
relationship of any person to the decedent or by reason of the
purpose of the gift inures to the benefit of the person bearing
that relationship or receiving the gift, except that when an
interest is subject to a prior present interest that is not
allowable as a deduction, the tax apportionable against the
present interest shall be paid from principal.
(3) Any deduction for property previously taxed and any credit
for gift taxes or { - death - } { + estate + } taxes of a
foreign country paid by the decedent or the estate of the
decedent inures to the proportionate benefit of all persons
liable to apportionment.
(4) Any credit for inheritance, succession or estate taxes or
taxes in the nature thereof in respect to property or interests
includable in the estate inures to the benefit of the persons or
interests chargeable with the payment thereof to the extent that,
or in proportion as, the credit reduces the tax.
(5) To the extent that property passing to or in trust for a
surviving spouse or any charitable, public or similar gift or
bequest does not constitute an allowable deduction for purposes
of the tax solely by reason of an inheritance tax or other death
tax imposed upon and deductible from the property, the property
shall not be included in the computation provided for in ORS
116.313, and to that extent no apportionment shall be made
against the property. This subsection does not apply to any case
in which the result will be to deprive the estate of a deduction
otherwise allowable under section 2053 (d) of the Internal
Revenue Code (26 U.S.C. 2053 (d)) relating to deduction for state
{ - death - } { + estate + } taxes on transfers for public,
charitable or religious uses.
SECTION 23. ORS 129.250 is amended to read:
129.250. After a decedent dies, in the case of an estate, or
after an income interest in a trust ends, the following rules
apply:
(1) A fiduciary of an estate or of a terminating income
interest shall determine the amount of net income and net
principal receipts received from property specifically given to a
beneficiary under the rules in ORS 129.270 to 129.425 that apply
to trustees and the rules in subsection (5) of this section. The
fiduciary shall distribute the net income and net principal
receipts to the beneficiary who is to receive the specific
property.
(2) A fiduciary shall determine the remaining net income of a
decedent's estate or a terminating income interest under the
rules in ORS 129.270 to 129.425 that apply to trustees and by:
Enrolled House Bill 2541 (HB 2541-B) Page 21
(a) Including in net income all income from property used to
discharge liabilities;
(b) Paying from income or principal, in the fiduciary's
discretion, fees of attorneys, accountants and fiduciaries, court
costs and other expenses of administration and interest on
{ - death - } { + estate + } taxes, but the fiduciary may pay
those expenses from income of property passing to a trust for
which the fiduciary claims an estate tax marital or charitable
deduction only to the extent that the payment of those expenses
from income will not cause the reduction or loss of the
deduction; and
(c) Paying from principal all other disbursements made or
incurred in connection with the settlement of a decedent's estate
or the winding up of a terminating income interest, including
debts, funeral expenses, disposition of remains, family
allowances, and { - death - } { + estate + } taxes and
related penalties that are apportioned to the estate or
terminating income interest by the will, the terms of the trust
or applicable law.
(3) A fiduciary shall distribute to a beneficiary who receives
a pecuniary amount outright the interest or any other amount
provided by the will, the terms of the trust or applicable law
from net income determined under subsection (2) of this section
or from principal to the extent that net income is insufficient.
If a beneficiary is to receive a pecuniary amount outright from a
trust after an income interest ends and no interest or other
amount is provided for by the terms of the trust or applicable
law, the fiduciary shall distribute the interest or other amount
to which the beneficiary would be entitled under applicable law
if the pecuniary amount were required to be paid under a will.
(4) A fiduciary shall distribute the net income remaining after
distributions required by subsection (3) of this section in the
manner described in ORS 129.255 to all other beneficiaries,
including a beneficiary who receives a pecuniary amount in trust,
even if the beneficiary holds an unqualified power to withdraw
assets from the trust or other presently exercisable general
power of appointment over the trust.
(5) A fiduciary may not reduce principal or income receipts
from property described in subsection (1) of this section because
of a payment described in ORS 129.400 or 129.405 to the extent
that the will, the terms of the trust or applicable law requires
the fiduciary to make the payment from assets other than the
property or to the extent that the fiduciary recovers or expects
to recover the payment from a third party. The net income and
principal receipts from the property are determined by including
all of the amounts the fiduciary receives or pays with respect to
the property, whether those amounts accrued or became due before,
on or after the date of a decedent's death or an income
interest's terminating event, and by making a reasonable
provision for amounts that the fiduciary believes the estate or
terminating income interest may become obligated to pay after the
property is distributed.
SECTION 24. ORS 305.490 is amended to read:
305.490. (1) Plaintiffs or petitioners filing a complaint or
petition in the tax court shall pay a filing fee at the time of
filing for each complaint or petition as follows:
(a) For a complaint or petition in the magistrate division,
$25.
(b) For a complaint or petition in the regular division, $50.
Enrolled House Bill 2541 (HB 2541-B) Page 22
(c) If a complaint or petition is specially designated under
ORS 305.501 for hearing in the regular division, a fee of $50.
(2) Neither the State of Oregon, nor any county, school
district, municipal corporation or other public corporation
therein, nor any officer of any such public political division or
corporation, appearing in the representative capacity of the
officer of any public political division or corporation, shall be
required to pay the fee prescribed under this section. The party
entitled to costs and disbursements on such appeal shall recover
from the opponent of the party the amount so paid upon order of
the court, as in equity suits in the circuit court.
(3)(a) If, in any proceeding before the tax court judge
involving taxes upon or measured by net income in which an
individual taxpayer is a party, or involving inheritance { + or
estate + } taxes, the court grants a refund claimed by the
executor or taxpayer or denies in part or wholly an additional
assessment of taxes claimed by the Department of Revenue to be
due from the estate or taxpayer, the court may allow the
taxpayer, in addition to costs and disbursements, the following:
(A) Reasonable attorney fees for the proceeding under this
subsection and for the prior proceeding in the matter, if any,
before the magistrate; and
(B) Reasonable expenses as determined by the court. Expenses
include accountant fees and fees of other experts incurred by the
executor or individual taxpayer in preparing for and conducting
the proceeding before the tax court judge and the prior
proceeding in the matter, if any, before the magistrate.
(b) Payment of attorney fees or reasonable expenses under this
subsection shall be made by the Department of Revenue in the
manner provided by ORS 305.790.
(4)(a) If, in any proceeding before the tax court judge
involving ad valorem property taxation, exemptions, special
assessments or omitted property, the court finds in favor of the
taxpayer, the court may allow the taxpayer, in addition to costs
and disbursements, the following:
(A) Reasonable attorney fees for the proceeding under this
subsection and for the prior proceeding in the matter, if any,
before the magistrate; and
(B) Reasonable expenses as determined by the court. Expenses
include fees of experts incurred by the individual taxpayer in
preparing for and conducting the proceeding before the tax court
judge and the prior proceeding in the matter, if any, before the
magistrate.
(b) Payment of attorney fees or reasonable expenses under this
subsection shall be made by the Department of Revenue in the
manner provided by ORS 305.790.
(5) All fees and other moneys received or collected by the
clerk by virtue of the office of the clerk shall be paid over to
the State Treasurer and shall be held by the clerk in the General
Fund as miscellaneous receipts.
SECTION 25. ORS 314.415 is amended to read:
314.415. (1) If the Department of Revenue determines pursuant
to ORS 305.270 that the amount of the tax due is less than the
amount theretofore paid, the excess shall be refunded by the
department with interest at the rate established under ORS
305.220, for each month or fraction of a month during a period
beginning 45 days after the due date of the return or the date
the tax was paid, { + or, in the case of a return filed under
ORS 118.100, the date that the return is filed, + } whichever is
the later, to the time the refund is made.
Enrolled House Bill 2541 (HB 2541-B) Page 23
(2)(a) The department may not allow or make a refund after
three years from the time the return was filed, or two years from
the time the tax (or a portion of the tax) was paid, whichever
period expires later, unless before the expiration of this period
a claim for refund is filed by the taxpayer in compliance with
ORS 305.270. In any case, if the original return is not filed
within three years of the due date, excluding extensions, of the
return, the department may allow or make a refund only of amounts
paid within two years from the date of the filing of the claim
for refund. If a refund is disallowed for the tax year during
which excess tax was paid for any reason set forth in this
subsection, the department may not allow the excess as a credit
against any tax occurring on a return filed for a subsequent
year.
(b) The department may not make a refund if the tax owed after
offsets for all amounts owed the state, or a county pursuant to a
judgment obtained under ORS 169.151, is less than $1.
(c) If a taxpayer would qualify under section 6511(h) of the
Internal Revenue Code for a suspension of the running of the
periods specified for filing a claim for refund of federal income
tax, the period specified in paragraph (a) of this subsection
shall also be suspended.
(d) The department may not pay an employee interest on a refund
of a tax withheld by an employer if the interest would be for any
period prior to the time the employee files a personal income tax
return for the tax year involved or for any period prior to the
day that is 45 days after the date when the employee's annual
return for that year was filed or was due, whichever is later.
(e) The department may not pay interest on a refund of
estimated tax paid under ORS 314.505 to 314.525 or 316.557 to
316.589 if the interest would be for any period prior to the time
the taxpayer files a tax return for the tax year involved or for
any period prior to the day that is 45 days after the date when
the tax return for that year was filed or was due, whichever is
later.
(f) The amount of the refund, exclusive of interest on the
refund, may not exceed the portion of the tax paid during the
period preceding the filing of the claim or, if no claim is
filed, then during the period preceding the allowance of the
refund during which a claim might have been filed. Where there
has been an overpayment of any tax imposed, the amount of the
overpayment and interest on the overpayment shall be credited
against any tax, penalty or interest then due from the taxpayer,
and only the balance shall be refunded.
(g) Except as provided in ORS 305.265 (12), if, pursuant to a
notice of deficiency or assessment, the taxpayer pays the amount
specified in the notice, or any part thereof, and if, upon
appeal, the Oregon Tax Court or the Oregon Supreme Court orders
that all or any part of the deficiency amount specified in the
notice and paid by the taxpayer be refunded, the amount so
ordered to be refunded shall bear interest at the rate
established for refunds in ORS 305.220. Interest shall be
computed from the date of payment to the department. Nothing in
this subsection shall require that interest be paid upon any
amount for any period for which interest upon the same amount for
the same period is required to be paid under ORS 305.419.
(3)(a) Notwithstanding any provision to the contrary in ORS
305.265 or 305.270 or subsection (1) or (2) of this section, if,
prior to the expiration of the period prescribed in subsection
(2) of this section, the department and the taxpayer consent in
Enrolled House Bill 2541 (HB 2541-B) Page 24
writing to the refund of tax after the expiration of the period
prescribed:
(A) The department shall make the refund prior to the
expiration of the period agreed upon; and
(B) The department may not make or allow a refund after the
expiration of the period agreed upon unless a claim for refund is
filed by the taxpayer before the expiration of the period agreed
upon in compliance with the manner prescribed by the department.
The period so agreed upon may be extended by subsequent
agreements in writing made before the expiration of the period
previously agreed upon.
(b) The department may consent to extend the period during
which a refund may be made only if the taxpayer has consented to
the assessment of additional tax, if additional taxes are
determined upon audit, after the expiration of the applicable
period prescribed in ORS 314.410 (1) to (3).
(4)(a) If the claim for credit or refund relates to an
overpayment on account of the deductibility by the taxpayer, or
by a partnership, of the worthlessness of a share of stock in a
corporation, of the right to subscribe for or to receive a share
of stock in a corporation, or of a debt, in lieu of the
three-year period of limitation prescribed in subsection (2) of
this section, the period shall be seven years from the date
prescribed by law for the filing of the return for the year with
respect to which the claim is made.
(b) If the claim described in paragraph (a) of this subsection
is made after the expiration of the three-year period prescribed
in subsection (2) of this section, the department may not allow
interest with respect to any credit or refund determined to be
due upon the claim for the period beginning at the close of the
three-year period prescribed in subsection (2) of this section
and ending at the expiration of six months after the date on
which the claim is filed.
(5)(a) If the claim for credit or refund relates to an
overpayment attributable to a net operating loss carryback or a
net capital loss carryback, in lieu of the three-year period of
limitation prescribed in subsection (2) of this section, the
period shall be the period that ends three years after the time
prescribed by law for filing the return (including extensions)
for the taxable year of the net operating loss or net capital
loss that results in such carryback. In the case of such a claim,
the amount of the credit or refund may exceed the portion of the
tax paid within the period provided in subsection (1), (2) or (3)
of this section, whichever is applicable, to the extent of the
amount of the overpayment attributable to the carryback. If the
allowance of a credit or refund of an overpayment of tax
attributable to a net operating loss carryback or a net capital
loss carryback is otherwise prevented by the operation of any law
or rule of law other than ORS 305.150, relating to closing
agreements, the credit or refund may be allowed or made if the
claim for credit or refund is filed within the period provided in
this subsection. To the extent that the carryback was not an
issue in any proceeding in which the determination of a court,
including the Oregon Tax Court, has become final, the claimed
credit or refund applicable to that carryback may be allowed or
made under this subsection.
(b) For purposes of subsection (1) or (2) of this section, if
any overpayment of tax results from a carryback of a net
operating loss or net capital loss, the overpayment shall be
deemed not to have been made prior to the later of:
Enrolled House Bill 2541 (HB 2541-B) Page 25
(A) The due date of the return for the taxable year in which
such net operating loss or net capital loss arises;
(B) The date the return for the year in which the net operating
loss or net capital loss arises is filed; or
(C) The date of filing of the return for the year to which the
net operating loss or net capital loss is carried back.
(6) Notwithstanding any provision to the contrary in ORS
305.265 or 305.270 or this section, if the taxpayer has agreed
with the United States Commissioner of Internal Revenue for an
extension, or a renewal of an extension, of the period for
proposing and assessing deficiencies in federal income tax for
any year, the period within which a claim for credit or refund
may be filed or credit or refund allowed or made if no claim is
filed shall be the period provided within subsections (1) to (5)
of this section or six months after the date of the expiration of
the agreed period for assessing deficiency in federal income tax,
whichever period expires later.
(7) If a joint return is filed, the department may make
separate refunds at the request of either spouse. The separate
refunds shall bear the same proportion to the total refund as the
adjusted gross income of each spouse bears to the adjusted gross
income of both spouses, or as otherwise determined by the
department.
(8) If a taxpayer entitled to a refund under subsection (1) of
this section dies, the department may issue a draft for payment
of such refund under the terms and conditions set out in ORS
293.490 to 293.500 exercising the same powers and subject to the
same restrictions pursuant to which the State Treasurer is
authorized to pay the amounts of warrants, checks or orders under
those statutes.
SECTION 26. { + Sections 27 and 28 of this 2011 Act are added
to and made a part of ORS 118.005 to 118.840. + }
SECTION 27. { + When the Department of Revenue and the taxing
official of one or more other states each claims that the state
of that official respectively was the domicile of the decedent
for the purpose of estate taxes or claims taxing authority over
the same property in an estate, the department may negotiate, and
enter into an agreement, with the taxing official of the other
state and with the executor to accept payment of estate tax,
together with any interest and penalties. The department may
enter into binding arbitration or into a compromise agreement
with respect to disputed liability for estate taxes with each
taxing official and with the executor. + }
SECTION 28. { + (1) At any time within three years after the
date that an estate tax return is filed, the Department of
Revenue may give notice of deficiency as prescribed in ORS
305.265.
(2) If the department finds that the value of the gross estate
has been undervalued on the estate tax return by an amount
greater than 25 percent, notice of deficiency may given at any
time within five years after the date that the return is filed.
(3) The limitations to the giving of notice of a deficiency
provided in this section do not apply to a deficiency resulting
from a false or fraudulent estate tax return or in a case where
no return has been filed. + } { + + }
SECTION 29. { + ORS 118.009, 118.019, 118.220, 118.240,
118.470, 118.810, 118.820, 118.830, 118.840, 118.855, 118.860,
118.865, 118.870, 118.875 and 118.880 and section 3, chapter 806,
Oregon Laws 2003, are repealed. + }
Enrolled House Bill 2541 (HB 2541-B) Page 26
SECTION 30. { + (1) Sections 27 and 28 of this 2011 Act, the
amendments to ORS 111.025, 114.075, 116.083, 116.173, 116.303,
116.343, 118.005, 118.007, 118.010, 118.013, 118.016, 118.100,
118.140, 118.160, 118.171, 118.225, 118.260, 118.280, 118.300,
118.350, 118.525, 129.250, 305.490 and 314.415 by sections 1 to
15 and 17 to 25 of this 2011 Act and the repeal of ORS 118.009,
118.019, 118.220, 118.240, 118.470, 118.810, 118.820, 118.830,
118.840, 118.855, 118.860, 118.865, 118.870, 118.875 and 118.880
and section 3, chapter 806, Oregon Laws 2003, by section 29 of
this 2011 Act apply to estates of decedents who die on or after
January 1, 2012.
(2) The amendments to ORS 105.645 by section 16 of this 2011
Act apply to estates of decedents who die on or after January 1,
2010. + }
SECTION 31. { + This 2011 Act takes effect on the 91st day
after the date on which the 2011 regular session of the
Seventy-sixth Legislative Assembly adjourns sine die. + }
----------
Passed by House May 10, 2011
Repassed by House June 15, 2011
.............................................................
Ramona Kenady Line, Chief Clerk of House
.............................................................
Bruce Hanna, Speaker of House
.............................................................
Arnie Roblan, Speaker of House
Passed by Senate June 13, 2011
.............................................................
Peter Courtney, President of Senate
Enrolled House Bill 2541 (HB 2541-B) Page 27
Received by Governor:
......M.,............., 2011
Approved:
......M.,............., 2011
.............................................................
John Kitzhaber, Governor
Filed in Office of Secretary of State:
......M.,............., 2011
.............................................................
Kate Brown, Secretary of State
Enrolled House Bill 2541 (HB 2541-B) Page 28
