Bill Text: OR HB3221 | 2011 | Regular Session | Introduced

Oregon House Bill 3221 (Prior Session Legislation)

Introduced

Bill Title: Relating to tax deferrals for investments in certain businesses; prescribing an effective date.

Sponsorship: Moderate Partisan Bill (Republican 7-2)

Status: (Failed) 2011-06-30 - In committee upon adjournment. [HB3221 Detail]

Download: Oregon-2011-HB3221-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 3668

                         House Bill 3221

Sponsored by Representative PARRISH; Representatives BOONE,
  CONGER, FREEMAN, KENNEMER, MCLANE, SCHAUFLER, SHEEHAN, WEIDNER

                             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.

  Permits taxpayer to defer recognition of long-term capital gain
if taxpayer invests in business entity in Oregon during tax year.
  Applies to tax years beginning on or after January 1, 2011.
  Takes effect on 91st day following adjournment sine die.

                        A BILL FOR AN ACT
Relating to tax deferrals for investments in certain businesses;
  and prescribing an effective date.
Be It Enacted by the People of the State of Oregon:
  SECTION 1.  { + Section 2 of this 2011 Act is added to and made
a part of ORS chapter 314. + }
  SECTION 2.  { + (1) As used in this section, 'business entity '
has the meaning given that term in ORS 60.470.
  (2) A taxpayer that has income for federal income tax purposes
from the sale or other disposition of a capital asset may defer
recognition of all or part of long-term capital gain in
determining the taxes imposed under this chapter or ORS chapter
316, 317 or 318, if an amount equal to the gain is invested in a
business entity doing business in Oregon during the tax year. The
deferral may be continued for up to four succeeding tax years if
the investment is continuously maintained. An investment under
this section includes:
  (a) Creating a new business entity;
  (b) Expanding an existing business entity;
  (c) Use of capital by a business entity to hire employees;
  (d) Paying for the operations of a business entity; or
  (e) Investing in another business entity that otherwise meets
the requirements of this section.
  (3) A taxpayer that meets the requirements of this section and
seeks a deferral shall file an application for the deferral with
the Department of Revenue at the time the taxpayer files the tax
return for the tax year for which the deferral is sought.
  (4) The department may require the taxpayer to provide proof of
eligibility for a deferral allowed by this section.
  (5) A deferral may be granted under this section only if the
taxpayer:
  (a) Has timely filed the taxpayer's return for the tax year;
and
  (b) Has paid any amount of tax due that is not eligible for
deferral under this section for the tax year.
  (6) If the taxpayer meets the requirements for deferral under
this section, the department shall grant the deferral.
  (7)(a) Recognition of gain may be deferred under this section
for a maximum period of five years. Following the end of the
deferral period, the deferred taxes are immediately due and
payable. The taxpayer may elect to pay the deferred taxes in
equal annual payments over the 10-year period immediately
following the end of the deferral period, but if the gain ceases
to be invested as required under this section, the taxpayer's
election of annual payments shall be revoked and the taxpayer
shall immediately pay all deferred taxes.
  (b) Payments made in any year may exceed the minimum payment
amount described in paragraph (a) of this subsection.
  (8) During the 10-year repayment period prescribed in
subsection (7) of this section, the taxpayer may reinvest all or
a portion of gain and may obtain a subsequent deferral under this
section.
  (9) The basis of the taxpayer in the business entity shall be
reduced by the amount of gain deferred under this section.
  (10) The department may adopt rules and prescribe forms
necessary to administer the deferral allowed under this
section. + }
  SECTION 3.  { + Section 2 of this 2011 Act applies to tax years
beginning on or after January 1, 2011. + }
  SECTION 4.  { + 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. + }
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