2007 ORS 314.752¹
Business tax credits
  • allowance to shareholders
  • rules

(1) Except as provided in ORS 314.740 (Tax on built-in gain) (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 (Taxation of shareholder's income), 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 (Proration between Oregon income and other income for nonresidents, part-year residents and trusts), 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 (Income tax credit for new business facility in reservation enterprise zone) (tribal taxes on reservation enterprise zones), ORS 315.104 (Reforestation) (forestation and reforestation), ORS 315.134 (Fish habitat improvement) (fish habitat improvement), ORS 315.138 (Screening devices, by-pass devices or fishways) (fish screening, by-pass devices, fishways), ORS 315.156 (Crop donation) (crop gleaning), ORS 315.164 (Farmworker housing projects) and 315.169 (Farmworker housing contributor credit) (farmworker housing), ORS 315.204 (Dependent care assistance) (dependent care assistance), ORS 315.208 (Dependent care facilities) (dependent care facilities), ORS 315.213 (Child Care Division contributions) (contributions for child care), ORS 315.254 (Youth apprenticeship sponsorship) (youth apprenticeship sponsorship), ORS 315.304 (Pollution control facilities) (pollution control facility), ORS 315.324 (Plastics recycling) (plastics recycling), ORS 315.354 (Energy conservation facilities) and ORS 469.207 (Tax credit for rental housing units) (energy conservation facilities), ORS 315.507 (Electronic commerce in designated enterprise zone) (electronic commerce), ORS 315.511 (Advanced telecommunications facilities) (advanced telecommunications facilities), ORS 315.604 (Bone marrow donor expense) (bone marrow transplant expenses), ORS 317.115 (Alternative fuel vehicle fueling stations) (fueling stations necessary to operate an alternative fuel vehicle) and ORS 315.141 (Biomass production or collection) (biomass production for biofuel). [1991 c.877 §36; 1993 c.730 §5; 1997 c.170 §34; 1997 c.534 §2; 1999 c.21 §36; 2001 c.674 §11; 2001 c.868 §9; 2001 c.932 §10; 2001 c.957 §18; 2005 c.80 §1; 2005 c.94 §80; 2007 c.739 §7]

Note 1: The amendments to 314.752 (Business tax credits) by section 13, chapter 625, Oregon Laws 2007, become operative January 2, 2014. See section 15, chapter 625, Oregon Laws 2007. The text that is operative from January 2, 2014, until January 2, 2028, is set forth for the user’s convenience.

314.752 (Business tax credits). (1) Except as provided in ORS 314.740 (Tax on built-in gain) (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 (Taxation of shareholder's income), 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 (Proration between Oregon income and other income for nonresidents, part-year residents and trusts), 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 (Income tax credit for new business facility in reservation enterprise zone) (tribal taxes on reservation enterprise zones), ORS 315.104 (Reforestation) (forestation and reforestation), ORS 315.134 (Fish habitat improvement) (fish habitat improvement), ORS 315.156 (Crop donation) (crop gleaning), ORS 315.164 (Farmworker housing projects) and 315.169 (Farmworker housing contributor credit) (farmworker housing), ORS 315.204 (Dependent care assistance) (dependent care assistance), ORS 315.208 (Dependent care facilities) (dependent care facilities), ORS 315.213 (Child Care Division contributions) (contributions for child care), ORS 315.254 (Youth apprenticeship sponsorship) (youth apprenticeship sponsorship), ORS 315.304 (Pollution control facilities) (pollution control facility), ORS 315.324 (Plastics recycling) (plastics recycling), ORS 315.354 (Energy conservation facilities) and ORS 469.207 (Tax credit for rental housing units) (energy conservation facilities), ORS 315.507 (Electronic commerce in designated enterprise zone) (electronic commerce), ORS 315.511 (Advanced telecommunications facilities) (advanced telecommunications facilities), ORS 315.604 (Bone marrow donor expense) (bone marrow transplant expenses), ORS 317.115 (Alternative fuel vehicle fueling stations) (fueling stations necessary to operate an alternative fuel vehicle) and ORS 315.141 (Biomass production or collection) (biomass production for biofuel).

Note 2: The amendments to 314.752 (Business tax credits) by section 3, chapter 883, Oregon Laws 2007, become operative January 2, 2028. See section 10, chapter 883, Oregon Laws 2007. The text that is operative on and after January 2, 2028, is set forth for the user’s convenience.

314.752 (Business tax credits). (1) Except as provided in ORS 314.740 (Tax on built-in gain) (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 (Taxation of shareholder's income), 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 (Proration between Oregon income and other income for nonresidents, part-year residents and trusts), 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 (Income tax credit for new business facility in reservation enterprise zone) (tribal taxes on reservation enterprise zones), ORS 315.134 (Fish habitat improvement) (fish habitat improvement), ORS 315.156 (Crop donation) (crop gleaning), ORS 315.164 (Farmworker housing projects) and 315.169 (Farmworker housing contributor credit) (farmworker housing), ORS 315.204 (Dependent care assistance) (dependent care assistance), ORS 315.208 (Dependent care facilities) (dependent care facilities), ORS 315.213 (Child Care Division contributions) (contributions for child care), ORS 315.254 (Youth apprenticeship sponsorship) (youth apprenticeship sponsorship), ORS 315.304 (Pollution control facilities) (pollution control facility), ORS 315.324 (Plastics recycling) (plastics recycling), ORS 315.354 (Energy conservation facilities) and ORS 469.207 (Tax credit for rental housing units) (energy conservation facilities), ORS 315.507 (Electronic commerce in designated enterprise zone) (electronic commerce), ORS 315.511 (Advanced telecommunications facilities) (advanced telecommunications facilities), ORS 315.604 (Bone marrow donor expense) (bone marrow transplant expenses), ORS 317.115 (Alternative fuel vehicle fueling stations) (fueling stations necessary to operate an alternative fuel vehicle) and ORS 315.141 (Biomass production or collection) (biomass production for biofuel).

Chapter 314

Law Review Cita­tions

9 WLJ 249 (1973); 5 EL 516 (1975)

1 Legislative Counsel Committee, CHAPTER 314—Taxes Imposed Upon or Measured by Net Income, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­314.­html (2007) (last ac­cessed Feb. 12, 2009).
 
2 Legislative Counsel Committee, Annotations to the Oregon Revised Stat­utes, Cumulative Supplement - 2007, Chapter 314, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­314ano.­htm (2007) (last ac­cessed Feb. 12, 2009).
 
3 OregonLaws.org assembles these lists by analyzing references between Sections. Each listed item refers back to the current Section in its own text. The result reveals relationships in the code that may not have otherwise been apparent.