Bill Text: OR HB4103 | 2012 | Regular Session | Introduced
Bill Title: Relating to capital improvements income tax credit; prescribing an effective date.
Spectrum: Partisan Bill (Republican 6-0)
Status: (Failed) 2012-03-05 - In committee upon adjournment. [HB4103 Detail]
Download: Oregon-2012-HB4103-Introduced.html
76th OREGON LEGISLATIVE ASSEMBLY--2012 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 36
House Bill 4103
Sponsored by Representative FREEMAN; Representatives CAMERON,
ESQUIVEL, KENNEMER, LINDSAY, WINGARD (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.
Creates income tax credit for capital improvements to business
facilities or homes that are commenced prior to May 30, 2012, or
effective date of Act, whichever is later. Limits amount each
taxpayer may claim. Establishes requirements for certification of
capital improvements.
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 capital improvements income tax credit; creating new
provisions; amending ORS 314.752 and 318.031; and prescribing
an effective date.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + Sections 2 to 4 of this 2012 Act are added to
and made a part of ORS chapter 315. + }
SECTION 2. { + (1) As used in sections 2 to 4 of this 2012
Act:
(a) 'ADA-compliant' means that a capital improvement results in
a business facility that is compliant with the Americans with
Disabilities Act.
(b) 'Business facility' means a physical asset that is used by
a business in the operation of a revenue-producing enterprise
including, but not limited to, manufacturing, assembly,
fabrication, processing, shipping, storage, retail sales or
services, child care, housing, retail food service, health care,
tourism, entertainment, financial services, professional
services, energy development or construction.
(c) 'Capital improvement' means a project that:
(A) Raises the value of a business facility owned or operated
by the taxpayer;
(B) Raises the value of a home owned by the taxpayer;
(C) Is a capital expenditure as described in section 263 of the
Internal Revenue Code; or
(D) Involves a purchase of machinery or equipment that becomes
a permanent fixture of a business facility owned or operated by
the taxpayer.
(d) 'Energy efficient' means that a capital improvement has
been certified by the State Department of Energy to produce
premium energy efficiency characteristics.
(2) A credit against taxes imposed by ORS chapter 316 (or, if
the taxpayer is a corporation, under ORS chapter 317) shall be
allowed for a taxpayer's expenses for capital improvements that
qualify under this section and section 3 of this 2012 Act. The
amount of the credit allowed under this section may not exceed
$50,000 for a capital improvement to a home or $500,000 for a
capital improvement to a business facility, and shall equal:
(a) The certified cost of a capital improvement that is
certified as energy efficient or ADA-compliant under section 3 of
this 2012 Act; or
(b) Fifty percent of the certified cost for all other capital
improvements.
(3) For a credit to be allowed under this section:
(a) The certified cost of a capital improvement must be:
(A) At least $5,000 for a capital improvement to a home; or
(B) At least $25,000 for a capital improvement to a business
facility.
(b) The taxpayer must:
(A) Be the owner or lessee of the business facility or owner of
the home that is the subject of the capital improvement;
(B) Commence construction or implementation of the capital
improvement prior to May 30, 2012, or the effective date of this
2012 Act, whichever is later;
(C) Complete construction or implementation of the capital
improvement before or during the tax year for which the credit is
claimed; and
(D) Receive all necessary certifications as provided in section
3 of this 2012 Act before claiming the credit.
(4) The credit allowed under this section is not in lieu of any
depreciation or amortization deduction for the investment to
which the taxpayer otherwise may be entitled under ORS chapter
316 or 317 for any tax year.
(5)(a) The credit allowed under this section may not exceed the
tax liability of the taxpayer for the tax year and may not be
carried over to another tax year.
(b) Notwithstanding paragraph (a) of this subsection, if the
certified cost exceeds $100,000, the credit allowed in each of
four succeeding tax years shall be 25 percent of the total
credit.
(6) A nonresident shall be allowed the credit under this
section in the proportion provided in ORS 316.117.
(7) If a change in the status of a taxpayer from resident to
nonresident or from nonresident to resident occurs, the credit
allowed under this section shall be determined in a manner
consistent with ORS 316.117.
(8) If a change in the taxable year of a taxpayer occurs as
described in ORS 314.085, or if the Department of Revenue
terminates the taxable year of a taxpayer under ORS 314.440, the
credit allowed under this section shall be prorated or computed
in a manner consistent with ORS 314.085.
(9) No credit shall be allowed under this section for any
portion of a certified cost for which the taxpayer claims a tax
credit or ad valorem tax relief under ORS 307.405, 315.304,
315.354, 315.356, 316.116 and 469B.130 to 469B.169, or any
similar state or federal tax incentive program. + }
SECTION 3. { + (1) Subject to standards and procedures that
the Department of Revenue shall establish by rule, the department
shall certify taxpayers' expenses as eligible costs for purposes
of claiming the credit allowed under section 2 of this 2012 Act.
The department may establish standards:
(a) For determining whether the value of a business facility or
home is likely to be improved by a taxpayer's expenses described
in section 2 of this 2012 Act.
(b) Requiring a certain ratio between a taxpayer's expenses for
the capital improvement and the likely amount of improvement in
value of the business facility or home.
(c) Requiring taxpayers to receive preliminary certification
before claiming a credit for certain capital improvements.
(2) In addition to the certification procedures required by
subsection (1) of this section:
(a) The State Department of Energy shall establish by rule
standards for certifying capital improvements as energy
efficient.
(b) The Department of Human Services shall establish by rule
standards for certifying capital improvements as
ADA-compliant. + }
SECTION 4. { + (1) A person may apply to the Department of
Revenue for certification under section 3 of this 2012 Act of the
expenses of a capital improvement.
(2) The application shall be made in writing in a form
prescribed by the department and shall contain information on the
capital improvement.
(3) The application shall be accompanied by the fee established
under subsection (4) of this section. The fee may be refunded if
the application for certification is rejected.
(4) By rule and after public hearing, the department may adopt
a schedule of reasonable fees that the department may require of
applicants for certification under section 3 of this 2012 Act.
The fees may vary according to the size and complexity of the
capital improvement. The fees shall not be considered by the
department as part of the cost of the capital improvement to be
certified. + }
SECTION 5. ORS 314.752 is amended to read:
314.752. (1) Except as provided in ORS 314.740 (5)(b), the tax
credits allowed or allowable to a C corporation for purposes of
ORS chapter 317 or 318 shall not be allowed to an S corporation.
The business tax credits allowed or allowable for purposes of ORS
chapter 316 shall be allowed or are allowable to the shareholders
of the S corporation.
(2) In determining the tax imposed under ORS chapter 316, as
provided under ORS 314.734, on income of the shareholder of an S
corporation, there shall be taken into account the shareholder's
pro rata share of business tax credit (or item thereof) that
would be allowed to the corporation (but for subsection (1) of
this section) or recapture or recovery thereof. The credit (or
item thereof), recapture or recovery shall be passed through to
shareholders in pro rata shares as determined in the manner
prescribed under section 1377(a) of the Internal Revenue Code.
(3) The character of any item included in a shareholder's pro
rata share under subsection (2) of this section shall be
determined as if such item were realized directly from the source
from which realized by the corporation, or incurred in the same
manner as incurred by the corporation.
(4) If the shareholder is a nonresident and there is a
requirement applicable for the business tax credit that in the
case of a nonresident the credit be allowed in the proportion
provided in ORS 316.117, then that provision shall apply to the
nonresident shareholder.
(5) As used in this section, 'business tax credit' means a tax
credit granted to personal income taxpayers to encourage certain
investment, to create employment, economic opportunity or
incentive or for charitable, educational, scientific, literary or
public purposes that is listed under this subsection as a
business tax credit or is designated as a business tax credit by
law or by the Department of Revenue by rule and includes but is
not limited to the following credits: ORS 285C.309 (tribal taxes
on reservation enterprise zones and reservation partnership
zones), ORS 315.104 (forestation and reforestation), ORS 315.138
(fish screening, by-pass devices, fishways), ORS 315.141 (biomass
production for biofuel), ORS 315.156 (crop gleaning), ORS 315.164
and 315.169 (farmworker housing), ORS 315.204 (dependent care
assistance), ORS 315.208 (dependent care facilities), ORS 315.213
(contributions for child care), ORS 315.304 (pollution control
facility), ORS 315.326 (renewable energy development
contributions), ORS 315.331 (energy conservation projects), ORS
315.336 (transportation projects), ORS 315.341 (renewable energy
resource equipment manufacturing facilities), ORS 315.354 and
469B.151 (energy conservation facilities), ORS 315.507
(electronic commerce), ORS 315.533 (low income community jobs
initiative) and ORS 317.115 (fueling stations necessary to
operate an alternative fuel vehicle) { + and section 2 of this
2012 Act (capital improvements) + }.
SECTION 6. ORS 318.031 is amended to read:
318.031. It being the intention of the Legislative Assembly
that this chapter and ORS chapter 317 shall be administered as
uniformly as possible (allowance being made for the difference in
imposition of the taxes), ORS 305.140 and 305.150, ORS chapter
314 and the following sections are incorporated into and made a
part of this chapter: ORS 285C.309, 315.104, 315.141, 315.156,
315.204, 315.208, 315.213, 315.304, 315.326, 315.331, 315.336,
315.507 and 315.533 { + and section 2 of this 2012 Act + } (all
only to the extent applicable to a corporation) and ORS chapter
317.
SECTION 7. { + Sections 2 to 4 of this 2012 Act and the
amendments to ORS 314.752 and 318.031 by sections 5 and 6 of this
2012 Act apply to tax years beginning on or after January 1,
2012. + }
SECTION 8. { + This 2012 Act takes effect on the 91st day
after the date on which the 2012 regular session of the
Seventy-sixth Legislative Assembly adjourns sine die. + }
----------
