ORS 315.259¹
First Break Program
  • rules

(1) The tax credits provided under this section may be referred to as the First Break Program.

(2) As used in this section:

(a) "Certificate" means a certificate issued by a community-based organization under subsection (5) of this section that certifies an individual as a qualified youth.

(b) "Community-based organization" means an organization designated by the Employment Department by rule as an organization authorized to certify individuals as qualified youths for purposes of this section, including all local commissions on children and families, schools or class groups offering alternative education programs under ORS 336.615 (Definition for ORS 336.615 to 336.675) to 336.375 ("Dental health program" defined), the federal Job Corps, school districts and the Youth Employment and Empowerment Coalition.

(c) "Employer" means an employer subject to taxation under ORS chapter 316, 317 or 318.

(d) "Hiring date" means the date on which the individual begins work for the first employer after becoming a qualified youth.

(e) "Qualified youth" or "qualified youth employee" means an individual who is 14 to 23 years of age on the hiring date and who has received a certificate pursuant to subsection (5) of this section from a community-based organization identifying the youth as eligible to participate in the First Break Program according to rules adopted by the Employment Department.

(f) "Sustained employment" means employment:

(A)(i) Of at least six months during the 12-month period following the hiring date; and

(ii) By three or fewer employers during the 12-month period following the hiring date; or

(B) Of a full-time student for at least two months during the period between May 1 and September 15.

(3)(a) A credit against the taxes otherwise due under ORS chapter 316 (or, if the taxpayer is a corporation that is an employer, under ORS chapter 317 or 318) is allowed to a resident employer, based upon wages actually paid by the employer to a qualified youth employee.

(b) The credit allowed under this subsection shall be allowed for the tax year in which ends the 12-month period following the hiring date of the qualified youth employee. Nothing in this paragraph shall be interpreted to require the employer to employ the qualified youth for the entire 12-month period in order to be eligible for the credit under this subsection.

(4) The amount of the credit provided under subsection (3) of this section shall be equal to the lesser of:

(a) $1,000;

(b) The amount of credit provided for in paragraph (a) of this subsection that has not already been taken into account by a previous employer of the qualified youth employee; or

(c) 50 percent of the wages paid to the qualified youth employee during the 12-month period following the qualified youth employee’s hiring date.

(5)(a) The Employment Department shall authorize each community-based organization to issue only a fixed number of certificates, the amount to be determined by the Employment Department, but not to exceed 1,500 certificates.

(b) Each certificate is valid only for a two-year period from the date it is issued to a qualified youth by a community-based organization.

(c) A community-based organization shall track the use of each certificate issued by it to a qualified youth and, if the youth is employed by more than one employer during the time the certificate is issued, shall calculate the amount of maximum credit allowable under subsection (4) of this section and shall inform each subsequent employer of the maximum amount of credit under this section to which the employer may be entitled.

(d) If the community-based organization determines that the qualified youth is unable or unwilling to find or maintain sustained employment, the community-based organization shall cancel the certificate and inform the Employment Department of the cancellation. Upon cancellation of a certificate, the Employment Department may authorize any community-based organization to issue a new certificate to a qualified youth, provided that the total number of outstanding certificates and unissued certificates authorized to be issued does not exceed 1,500.

(e) If the community-based organization determines that all of the employers of a qualified youth are collectively entitled to 80 percent or more of the tax credit provided under this section at the time the qualified youth becomes unemployed, the community-based organization shall withdraw the certificate, and any subsequent employer shall not be entitled to a credit under this section for employment of the qualified youth. A certificate that is withdrawn under this paragraph shall not be reissued.

(f) No certificate may be issued under this subsection on or after January 1, 2005.

(6) Wages taken into account for purposes of subsection (4) of this section shall not include any amount paid by the employer to an individual for whom the employer receives federal funds for on-the-job training of the individual.

(7) Only one employer at a time shall be eligible for the credit provided under this section for the employment of a qualified youth employee.

(8)(a) A nonresident shall be allowed the credit provided under subsection (3) of this section computed in the same manner and subject to the same limitations as the credit allowed to a resident of this state. However, the credit shall be prorated using the proportion provided in ORS 316.117 (Proration between Oregon income and other income for nonresidents, part-year residents and trusts).

(b) If a change in the taxable year of a taxpayer occurs as described in ORS 314.085 (Taxable year), or if the Department of Revenue terminates the taxpayer’s taxable year under ORS 314.440 (Tax as debt), the credit allowed by subsection (3) of this section shall be prorated or computed in a manner consistent with ORS 314.085 (Taxable year).

(c) If a change in the status of a taxpayer from resident to nonresident or from nonresident to resident occurs, the credit allowed by subsection (3) of this section shall be determined in a manner consistent with ORS 316.117 (Proration between Oregon income and other income for nonresidents, part-year residents and trusts).

(9) Any tax credit otherwise allowable under this section that is not used by the taxpayer in a particular tax year may be carried forward and offset against the taxpayer’s tax liability for the next succeeding tax year. Any credit remaining unused in such next succeeding tax year may be carried forward and used in the second succeeding tax year, and likewise any credit not used in that second succeeding tax year may be carried forward and used in the third succeeding tax year, and any credit not used in that third succeeding tax year may be carried forward and used in the fourth succeeding tax year, and any credit not used in that fourth succeeding tax year may be carried forward and used in the fifth succeeding tax year, but may not be carried forward for any tax year thereafter.

(10)(a) The credit allowed under subsection (3) of this section is in addition to any deduction otherwise allowable under ORS chapter 316, 317 or 318.

(b) No other credit allowed under this chapter or ORS chapter 316, 317 or 318 shall be based upon all or any portion of amounts upon which the credit allowed under subsection (3) of this section is based.

(11) An employer receiving a credit under subsection (3) of this section shall maintain records for each qualified youth employee establishing that the employee was certified by a community-based organization as a qualified youth on or before the hiring date. The records shall be retained for a period of four years after the tax year in which a credit provided under subsection (3) of this section is taken.

(12) The Employment Department shall adopt rules that:

(a) Provide the criteria by which a youth may be identified as eligible to participate in the First Break Program.

(b) Designate community-based organizations that may issue the certificates described in subsection (5) of this section, including all local commissions on children and families, schools and class groups offering alternative education programs, the federal Jobs Corps, school districts and the Youth Employment and Empowerment Coalition. [1995 c.648 §2; 1997 c.325 §38; 1999 c.59 §78; 1999 c.741 §1]

Chapter 315

Notes of Decisions

State could not recalculate tax for tax year closed to review in order to prevent elective carry forward of tax credit to tax year subject to review. Smurfit Newsprint Corp. v. Dept. of Revenue, 329 Or 591, 997 P2d 185 (2000)

1 Legislative Counsel Committee, CHAPTER 315—Personal and Corporate Income or Excise Tax Credits, https://­www.­oregonlegislature.­gov/­bills_laws/­Archive/­2007ors315.­pdf (2007) (last ac­cessed Feb. 12, 2009).
 
2 Legislative Counsel Committee, Annotations to the Oregon Revised Stat­utes, Cumulative Supplement - 2007, Chapter 315, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­315ano.­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. Currency Information