Effect of productivity increases on qualification of certain firms
- • uses of tax savings
The requirements of ORS 285C.200 (Qualifications of business firm) (2)(b)(B) are met if the qualified business firm does all of the following:
(1) The firm demonstrates at least a 10 percent increase in productivity no later than 18 months following January 1 of the first assessment year for which an exemption under ORS 285C.175 (Enterprise zone exemption) is claimed. Unless further specified by the sponsor of the enterprise zone through the resolution adopted under ORS 285C.155 (Minimum employment and other requirements for authorization):
(a) The increase must be in business operations of the firm that are using qualified property receiving the exemption;
(b) Productivity is measured by dividing physical units or quantity of output by the number of labor hours engaged in the operations that produced the physical units or quantity of output; and
(c) The base level of productivity shall be established over a minimum 12-month period preceding the date on which the qualified property is placed in service.
(2) The firm maintains or exceeds the 10 percent increase in productivity under subsection (1) of this section as an annual average rate for each subsequent assessment year during the remainder of the exemption period.
(3) On or before April 1 of each of the first three assessment years for which an exemption is claimed, the firm deposits into an account established by the sponsor an amount equal to 25 percent of the estimated tax savings arising from the exemption for that year. The sponsor may adopt additional specifications or requirements applicable to this subsection in the resolution the sponsor adopts under ORS 285C.155 (Minimum employment and other requirements for authorization). Consistent with this subsection and any additional specifications or requirements adopted by the sponsor:
(a) For up to 30 months following the relevant April 1 date for which a deposit is made, the firm may draw from the account amounts equal to any expense incurred for training or retraining employees to promote or facilitate productivity increases under this section, except that the total amount withdrawn from the account for that deposit may not exceed $3,500 per trained employee;
(b) Any amount attributable to the deposit that remains in the account after the 30-month period in which firm withdrawals may be made under paragraph (a) of this subsection shall be transferred to a special fund for use by local publicly funded job training providers; and
(c) No more than 18 months after the deposit, the estimated tax savings on which the deposit was based shall be reconciled with the actual tax savings arising from the exemption. The reconciliation shall be accomplished by the firm immediately making a further deposit into the account to cover any shortfall or by being reimbursed from the account for any surplus. A deposit or reimbursement made pursuant to this paragraph does not affect withdrawals or transfers that occur as a result of paragraph (a) or (b) of this subsection. [2003 c.662 §33a]
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