Bill Text: OR HB2845 | 2011 | Regular Session | Introduced
Bill Title: Relating to modifications to taxable income for personal income taxation purposes; prescribing an effective date.
Sponsorship: Partisan Bill (Democrat 1)
Status: (Failed) 2011-06-30 - In committee upon adjournment. [HB2845 Detail]
Download: Oregon-2011-HB2845-Introduced.html
76th OREGON LEGISLATIVE ASSEMBLY--2011 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 402
House Bill 2845
Sponsored by Representative HUNT (at the request of Thomas D.
Moore) (Presession filed.)
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
Allows personal income taxpayer to deduct transportation costs
related to medical care at mileage rate available for trade or
business deduction. Removes limitation on amount of available
subtraction for federal income tax paid. Removes age restrictions
and limitation on amount of expenses eligible for medical
expenses deduction.
Applies to tax years beginning on or after January 1, 2012.
Takes effect on 91st day following adjournment sine die.
A BILL FOR AN ACT
Relating to modifications to taxable income for personal income
taxation purposes; creating new provisions; amending ORS
316.362, 316.687, 316.690 and 316.695; and prescribing an
effective date.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 316.695, as amended by section 3, chapter 746,
Oregon Laws 2009, is amended to read:
316.695. (1) In addition to the modifications to federal
taxable income contained in this chapter, there shall be added to
or subtracted from federal taxable income:
(a) If, in computing federal income tax for a taxable year, the
taxpayer deducted itemized deductions, as defined in section
63(d) of the Internal Revenue Code, the taxpayer shall add the
amount of itemized deductions deducted (the itemized deductions
less an amount, if any, by which the itemized deductions are
reduced under section 68 of the Internal Revenue Code).
(b) If, in computing federal income tax for a taxable year, the
taxpayer deducted the standard deduction, as defined in section
63(c) of the Internal Revenue Code, the taxpayer shall add the
amount of the standard deduction deducted.
(c)(A) From federal taxable income there shall be subtracted
the larger of (i) the taxpayer's itemized deductions or (ii) a
standard deduction. Except as provided in subsection
{ - (8) - } { + (5) + } of this section, for purposes of this
subparagraph, 'standard deduction' means the sum of the basic
standard deduction and the additional standard deduction.
(B) For purposes of subparagraph (A) of this paragraph, the
basic standard deduction is:
(i) $3,280, in the case of joint return filers or a surviving
spouse;
(ii) $1,640, in the case of an individual who is not a married
individual and is not a surviving spouse;
(iii) $1,640, in the case of a married individual who files a
separate return; or
(iv) $2,640, in the case of a head of household.
(C)(i) For purposes of subparagraph (A) of this paragraph for
tax years beginning on or after January 1, 2003, the Department
of Revenue shall annually recompute the basic standard deduction
for each category of return filer listed under subparagraph (B)
of this paragraph. The basic standard deduction shall be computed
by dividing the monthly averaged U.S. City Average Consumer Price
Index for the 12 consecutive months ending August 31 of the prior
calendar year by the average U.S. City Average Consumer Price
Index for the second quarter of 2002, then multiplying that
quotient by the amount listed under subparagraph (B) of this
paragraph for each category of return filer.
(ii) If any change in the maximum household income determined
under this subparagraph is not a multiple of $5, the increase
shall be rounded to the next lower multiple of $5.
(iii) As used in this subparagraph, 'U.S. City Average Consumer
Price Index' means the U.S. City Average Consumer Price Index for
All Urban Consumers (All Items) as published by the Bureau of
Labor Statistics of the United States Department of Labor.
(D) For purposes of subparagraph (A) of this paragraph, the
additional standard deduction is the sum of each additional
amount to which the taxpayer is entitled under subsection
{ - (7) - } { + (4) + } of this section.
(E) As used in subparagraph (B) of this paragraph, ' surviving
spouse' and 'head of household' have the meaning given those
terms in section 2 of the Internal Revenue Code.
(F) In the case of the following, the standard deduction
referred to in subparagraph (A) of this paragraph shall be zero:
(i) A husband or wife filing a separate return where the other
spouse has claimed itemized deductions under subparagraph (A) of
this paragraph;
(ii) A nonresident alien individual;
(iii) An individual making a return for a period of less than
12 months on account of a change in the individual's annual
accounting period;
(iv) An estate or trust;
(v) A common trust fund; or
(vi) A partnership.
(d) For the purposes of paragraph (c)(A) of this subsection,
the taxpayer's itemized deductions are the sum of:
(A) The taxpayer's itemized deductions as defined in section
63(d) of the Internal Revenue Code (reduced, if applicable, as
described under section 68 of the Internal Revenue Code) minus
the deduction for Oregon income tax (reduced, if applicable, by
the proportion that the reduction in federal itemized deductions
resulting from section 68 of the Internal Revenue Code bears to
the amount of federal itemized deductions as defined for purposes
of section 68 of the Internal Revenue Code); and
(B) The amount that may be taken into account under section
213(a) of the Internal Revenue Code { + , except that amounts
paid for transportation that qualify under section 213(d)(1)(B)
of the Internal Revenue Code may be deducted using the mileage
rate applicable to trade or business expenses under section 162
of the Internal Revenue Code, instead of the rate applicable to
medical transportation expenses. + } { - , not to exceed seven
and one-half percent of the federal adjusted gross income of the
taxpayer, if the taxpayer has attained the following age before
the close of the taxable year, or, in the case of a joint return,
if either taxpayer has attained the following age before the
close of the taxable year: - }
{ - (i) For taxable years beginning on or after January 1,
1991, and before January 1, 1993, a taxpayer must attain 58 years
of age before the close of the taxable year. - }
{ - (ii) For taxable years beginning on or after January 1,
1993, and before January 1, 1995, a taxpayer must attain 59 years
of age before the close of the taxable year. - }
{ - (iii) For taxable years beginning on or after January 1,
1995, and before January 1, 1997, a taxpayer must attain 60 years
of age before the close of the taxable year. - }
{ - (iv) For taxable years beginning on or after January 1,
1997, and before January 1, 1999, a taxpayer must attain 61 years
of age before the close of the taxable year. - }
{ - (v) For taxable years beginning on or after January 1,
1999, a taxpayer must attain 62 years of age before the close of
the taxable year. - }
(2)(a) There shall be subtracted from federal taxable income
any portion of the distribution of a pension, profit-sharing,
stock bonus or other retirement plan, representing that portion
of contributions which were taxed by the State of Oregon but not
taxed by the federal government under laws in effect for tax
years beginning prior to January 1, 1969, or for any subsequent
year in which the amount that was contributed to the plan under
the Internal Revenue Code was greater than the amount allowed
under this chapter.
(b) Interest or other earnings on any excess contributions of a
pension, profit-sharing, stock bonus or other retirement plan not
permitted to be deducted under paragraph (a) of this subsection
shall not be added to federal taxable income in the year earned
by the plan and shall not be subtracted from federal taxable
income in the year received by the taxpayer.
{ - (3)(a) Except as provided in subsection (4) of this
section, there shall be added to federal taxable income the
amount of any federal income taxes in excess of the amount
provided in paragraphs (b) to (d) of this subsection, accrued by
the taxpayer during the taxable year as described in ORS 316.685,
less the amount of any refund of federal taxes previously accrued
for which a tax benefit was received. - }
{ - (b) The limits applicable to this subsection are: - }
{ - (A) $5,500, if the federal adjusted gross income of the
taxpayer for the tax year is less than $125,000, or, if reported
on a joint return, less than $250,000. - }
{ - (B) $4,400, if the federal adjusted gross income of the
taxpayer for the tax year is $125,000 or more and less than
$130,000, or, if reported on a joint return, $250,000 or more and
less than $260,000. - }
{ - (C) $3,300, if the federal adjusted gross income of the
taxpayer for the tax year is $130,000 or more and less than
$135,000, or, if reported on a joint return, $260,000 or more and
less than $270,000. - }
{ - (D) $2,200, if the federal adjusted gross income of the
taxpayer for the tax year is $135,000 or more and less than
$140,000, or, if reported on a joint return, $270,000 or more and
less than $280,000. - }
{ - (E) $1,100, if the federal adjusted gross income of the
taxpayer for the tax year is $140,000 or more and less than
$145,000, or, if reported on a joint return, $280,000 or more and
less than $290,000. - }
{ - (c) If the federal adjusted gross income of the taxpayer
is $145,000 or more for the tax year, or, if reported on a joint
return, $290,000 or more, the limit is zero and the taxpayer is
not allowed a subtraction for federal income taxes under ORS
316.680 (1) for the tax year. - }
{ - (d) In the case of a husband and wife filing separate tax
returns, the amount added shall be in the amount of any federal
income taxes in excess of the amount provided for individual
taxpayers under paragraphs (a) to (c) of this subsection, less
the amount of any refund of federal taxes previously accrued for
which a tax benefit was received. - }
{ - (e) For purposes of this subsection, the limits
applicable to a joint return shall apply to a head of household
or a surviving spouse, as defined in section 2(a) and (b) of the
Internal Revenue Code. - }
{ - (f)(A) For a calendar year beginning on or after January
1, 2008, the Department of Revenue shall make a cost-of-living
adjustment to the federal income tax threshold amounts described
in paragraphs (b) and (d) of this subsection. - }
{ - (B) The cost-of-living adjustment for a calendar year is
the percentage by which the monthly averaged U.S. City Average
Consumer Price Index for the 12 consecutive months ending August
31 of the prior calendar year exceeds the monthly averaged index
for the period beginning September 1, 2005, and ending August 31,
2006. - }
{ - (C) As used in this paragraph, 'U.S. City Average
Consumer Price Index' means the U.S. City Average Consumer Price
Index for All Urban Consumers (All Items) as published by the
Bureau of Labor Statistics of the United States Department of
Labor. - }
{ - (D) If any adjustment determined under subparagraph (B)
of this paragraph is not a multiple of $50, the adjustment shall
be rounded to the next lower multiple of $50. - }
{ - (E) The adjustment shall apply to all tax years beginning
in the calendar year for which the adjustment is made. - }
{ - (4)(a) In addition to the adjustments required by ORS
316.130, a full-year nonresident individual shall add to taxable
income a proportion of any accrued federal income taxes as
computed under ORS 316.685 in excess of the amount provided in
subsection (3) of this section in the proportion provided in ORS
316.117. - }
{ - (b) In the case of a husband and wife filing separate tax
returns, the amount added under this subsection shall be computed
in a manner consistent with the computation of the amount to be
added in the case of a husband and wife filing separate returns
under subsection (3) of this section. The method of computation
shall be determined by the Department of Revenue by rule. - }
{ - (5) Subsections (3)(d) and (4)(b) of this section shall
not apply to married individuals living apart as defined in
section 7703(b) of the Internal Revenue Code. - }
{ - (6)(a) - } { + (3)(a) + } For tax years beginning on or
after January 1, 1981, and prior to January 1, 1983, income or
loss taken into account in determining federal taxable income by
a shareholder of an S corporation pursuant to sections 1373 to
1375 of the Internal Revenue Code shall be adjusted for purposes
of determining Oregon taxable income, to the extent that as
income or loss of the S corporation, they were required to be
adjusted under the provisions of ORS chapter 317.
(b) For tax years beginning on or after January 1, 1983, items
of income, loss or deduction taken into account in determining
federal taxable income by a shareholder of an S corporation
pursuant to sections 1366 to 1368 of the Internal Revenue Code
shall be adjusted for purposes of determining Oregon taxable
income, to the extent that as items of income, loss or deduction
of the shareholder the items are required to be adjusted under
the provisions of this chapter.
(c) The tax years referred to in paragraphs (a) and (b) of this
subsection are those of the S corporation.
(d) As used in paragraph (a) of this subsection, an S
corporation refers to an electing small business corporation.
{ - (7)(a) - } { + (4)(a) + } The taxpayer shall be
entitled to an additional amount, as referred to in subsection
(1)(c)(A) and (D) of this section, of $1,000:
(A) For the taxpayer if the taxpayer has attained age 65 before
the close of the taxpayer's taxable year; and
(B) For the spouse of the taxpayer if the spouse has attained
age 65 before the close of the taxable year and an additional
exemption is allowable to the taxpayer for such spouse for
federal income tax purposes under section 151(b) of the Internal
Revenue Code.
(b) The taxpayer shall be entitled to an additional amount, as
referred to in subsection (1)(c)(A) and (D) of this section, of
$1,000:
(A) For the taxpayer if the taxpayer is blind at the close of
the taxable year; and
(B) For the spouse of the taxpayer if the spouse is blind as of
the close of the taxable year and an additional exemption is
allowable to the taxpayer for such spouse for federal income tax
purposes under section 151(b) of the Internal Revenue Code. For
purposes of this subparagraph, if the spouse dies during the
taxable year, the determination of whether such spouse is blind
shall be made immediately prior to death.
(c) In the case of an individual who is not married and is not
a surviving spouse, paragraphs (a) and (b) of this subsection
shall be applied by substituting '$1,200' for '$1,000. '
(d) For purposes of this subsection, an individual is blind
only if the individual's central visual acuity does not exceed
20/200 in the better eye with correcting lenses, or if the
individual's visual acuity is greater than 20/200 but is
accompanied by a limitation in the fields of vision such that the
widest diameter of the visual field subtends an angle no greater
than 20 degrees.
{ - (8) - } { + (5) + } In the case of an individual with
respect to whom a deduction under section 151 of the Internal
Revenue Code is allowable for federal income tax purposes to
another taxpayer for a taxable year beginning in the calendar
year in which the individual's taxable year begins, the basic
standard deduction (referred to in subsection (1)(c)(B) of this
section) applicable to such individual for such individual's
taxable year shall equal the lesser of:
(a) The amount allowed to the individual under section 63(c)(5)
of the Internal Revenue Code for federal income tax purposes for
the tax year for which the deduction is being claimed; or
(b) The amount determined under subsection (1)(c)(B) of this
section.
SECTION 2. ORS 316.362 is amended to read:
316.362. (1) An income tax return with respect to the tax
imposed by this chapter shall be made by the following:
(a) Every resident individual:
(A) Who is required to file a federal income tax return for the
taxable year; or
(B) Who has gross income greater than the sum of:
(i) The basic standard deduction allowed under ORS 316.695
(1)(c)(B);
(ii) Any additional standard deduction allowed to the taxpayer
under ORS 316.695 { - (7) - } { + (4) + }; and
(iii) An amount equal to the income equivalent of one personal
exemption credit under ORS 316.085 (3)(b) if unmarried, or equal
to the income equivalent of two personal exemption credits under
ORS 316.085 (3)(b) if married.
(b) Every nonresident individual who has federal gross income
from sources in this state of more than the basic standard
deduction allowed under ORS 316.695 (1)(c)(B).
(c) Every resident estate or trust that is required to file a
federal income tax return.
(d) Every nonresident estate that has federal gross income of
$600 or more for the taxable year from sources within this state.
(e) Every nonresident trust that for the taxable year has from
sources within this state any taxable income, or gross income of
$600 or more regardless of the amount of taxable income.
(2) Nothing contained in this section shall preclude the
Department of Revenue from requiring any individual, estate or
trust to file a return when, in the judgment of the department, a
return should be filed.
(3) For purposes of this section, the income equivalent of a
personal exemption credit under ORS 316.085 (3)(b) shall be
determined as follows:
(a) Divide the personal exemption credit amount by the rate
applicable to the lowest income bracket under ORS 316.037.
(b) If the resulting quotient is less than the maximum amount
of income subject to the rate used in paragraph (a) of this
subsection, the quotient is the income equivalent.
(c) If the resulting quotient is more than the maximum amount
of income subject to the rate used in paragraph (a) of this
subsection:
(A) Multiply the maximum amount of income subject to the rate
used in paragraph (a) of this subsection by the rate used in
paragraph (a) of this subsection.
(B) Determine the difference between the product calculated
under subparagraph (A) of this paragraph and the personal
exemption credit amount.
(C) Divide the difference determined in subparagraph (B) of
this paragraph by the rate applicable to the income bracket that
is the next succeeding the lowest income bracket under ORS
316.037.
(D) Add the quotient determined in subparagraph (C) of this
paragraph to the maximum amount of income subject to the rate
used in paragraph (a) of this subsection. The sum is the income
equivalent.
SECTION 3. ORS 316.687 is amended to read:
316.687. There shall be added to federal taxable income of a
parent who makes an election under section 1(g)(7)(B) of the
Internal Revenue Code any amount in excess of the standard
deduction allowed for a child under ORS 316.695 { - (8) - }
{ + (5) + } but not in excess of the amount described in section
1(g)(7)(B)(i) of the Internal Revenue Code (twice the amount in
effect for the taxable year under section 63(c)(5)(A) of the
Internal Revenue Code). The addition under this section shall be
made for each child whose income is included in the taxable
income of the parent under section 1(g)(7)(B) of the Internal
Revenue Code.
SECTION 4. ORS 316.690 is amended to read:
316.690. (1) Subject to subsection (2) of this section, in
addition to other modifications provided in this chapter, and if
a taxpayer elects to take foreign income taxes imposed for the
taxable year by a foreign country as a credit on the federal
income tax return or does not itemize personal deductions on the
federal income tax return, there shall be subtracted from federal
taxable income in the computation of state taxable income the
amount of foreign income taxes imposed for the taxable year by a
foreign country.
(2) The deduction for foreign country income taxes provided by
this section shall be limited as follows:
(a) Except as provided in paragraph (b) of this subsection, the
sum of foreign country income taxes deducted in computing state
taxable income and the modification for federal income taxes
authorized by ORS 316.680 (1)(b) { - as limited by ORS 316.695
(3) shall - } { + may + } not exceed $3,000.
(b) In the case of a husband and wife filing separate tax
returns, the sum described in paragraph (a) of this subsection
shall be limited to $1,500.
SECTION 5. { + The amendments to ORS 316.362, 316.687, 316.690
and 316.695 by sections 1 to 4 of this 2011 Act apply to tax
years beginning on or after January 1, 2012. + }
SECTION 6. { + This 2011 Act takes effect on the 91st day
after the date on which the 2011 session of the Seventy-sixth
Legislative Assembly adjourns sine die. + }
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