Bill Text: OR HB2968 | 2011 | Regular Session | Introduced
Bill Title: Relating to personal income taxation.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Failed) 2011-06-30 - In committee upon adjournment. [HB2968 Detail]
Download: Oregon-2011-HB2968-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 1401
House Bill 2968
Sponsored by Representative JENSON (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.
Applies four-year sunset to personal income tax increase
provisions of Ballot Measure 66 (2010).
Decreases tax rates for individuals with taxable income above
$125,000 for tax years beginning on or after January 1, 2013.
Decreases tax liability for certain taxpayers by removing
phaseout of subtraction for federal income taxes paid for
taxpayer with federal adjusted gross income of $125,000 or more
for individual return and $250,000 or more for joint return.
Restores subtraction for taxpayer with adjusted gross income of
$145,000 or more for individual return and $290,000 or more for
joint return. Applies to tax years beginning on or after January
1, 2013.
A BILL FOR AN ACT
Relating to personal income taxation; creating new provisions;
and amending ORS 316.037 and 316.695.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 316.037, as amended by sections 1 and 2, chapter
746, Oregon Laws 2009, is amended to read:
316.037. (1)(a) A tax is imposed for each taxable year on the
entire taxable income of every resident of this state. The amount
of the tax shall be determined in accordance with the following
table:
_________________________________________________________________
____NOTE_TO_WEB_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
If taxable income The tax is:
____NOTE_TO_WEB_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
Not over $2,000 5% of
____NOTE_TO_WEB_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
taxable
income
Over $2,000 but not
____NOTE_TO_WEB_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
over $5,000 $100 plus 7%
____NOTE_TO_WEB_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
of the excess
over $2,000
____NOTE_TO_WEB_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
Over $5,000 but not
____NOTE_TO_WEB_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
over $125,000 $310 plus 9%
____NOTE_TO_WEB_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
of the excess
over $5,000
____NOTE_TO_WEB_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
Over $125,000 $11,110 plus 9.9%
____NOTE_TO_WEB_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
of the excess
over $125,000
____________________________________________________________
END OF POSSIBLE IRREGULAR TABULAR TEXT
____________________________________________________________
_________________________________________________________________
(b) For tax years beginning in each calendar year, the
Department of Revenue shall adopt a table that shall apply in
lieu of the table contained in paragraph (a) of this subsection,
as follows:
(A) { - Except as provided in subparagraph (D) of this
paragraph, - } The minimum and maximum dollar amounts for each
bracket for which a tax is imposed shall be increased by the
cost-of-living adjustment for the calendar year.
(B) The rate applicable to any rate bracket as adjusted under
subparagraph (A) of this paragraph shall not be changed.
(C) The amounts setting forth the tax, to the extent necessary
to reflect the adjustments in the rate brackets, shall be
adjusted.
{ - (D) The rate brackets applicable to taxable income in
excess of $125,000 may not be adjusted. - }
(c) For purposes of paragraph (b) of this subsection, the
cost-of-living adjustment for any calendar year is the percentage
(if any) by which the monthly averaged U.S. City Average Consumer
Price Index for the 12 consecutive months ending August 31 of the
prior calendar year exceeds the monthly averaged index for the
second quarter of the calendar year 1992.
(d) As used in this subsection, '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.
(e) If any increase determined under paragraph (b) of this
subsection is not a multiple of $50, the increase shall be
rounded to the next lower multiple of $50.
(2) A tax is imposed for each taxable year upon the entire
taxable income of every part-year resident of this state. The
amount of the tax shall be computed under subsection (1) of this
section as if the part-year resident were a full-year resident
and shall be multiplied by the ratio provided under ORS 316.117
to determine the tax on income derived from sources within this
state.
(3) A tax is imposed for each taxable year on the taxable
income of every full-year nonresident that is derived from
sources within this state. The amount of the tax shall be
determined in accordance with the table set forth in subsection
(1) of this section.
SECTION 2. 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) 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) 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, 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 { + paragraph (b) of this
subsection and + } 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 - } { + $5,500 + }, 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) - } { + (b) + } 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 - } { + $2,750 + }, 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) - } { + (c)(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 { + (a) and + } (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 - } { + $5,500 + } 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) - } { + (3)(b) + } 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) 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) 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) 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 3. { + The amendments to ORS 316.037 and 316.695 by
sections 1 and 2 of this 2011 Act apply to tax years beginning on
or after January 1, 2013. + }
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