2017 ORS 314.525¹
Underpayment of estimated tax
  • interest
  • nonapplicability of penalties

(1) An underpayment of estimated tax under ORS 314.505 (Estimate of tax liability by corporations) to 314.525 (Underpayment of estimated tax) will be considered to have occurred if the estimated tax is not paid as required.

(2) Notwithstanding subsection (1) of this section, there shall be no underpayment of estimated tax if the estimated tax paid equals or exceeds the amount described in any one of the following paragraphs:

(a) The amount which would be required to be paid if the estimated tax liability were equal to 100 percent of the tax shown on the return for the taxable year or, if no return was filed, 100 percent of the tax for such taxable year.

(b) The amount which would be required to be paid if the estimated tax liability were equal to 100 percent of the tax shown on the return for the preceding taxable year, and the preceding taxable year was a taxable year of 12 months.

(c)(A) An amount equal to 100 percent of the tax for the taxable year computed by placing on an annualized basis the taxable income:

(i) For the first three months of the taxable year, in the case of the installment required to be paid in the fourth month;

(ii) For the first three months or for the first five months of the taxable year, in the case of the installment required to be paid in the sixth month;

(iii) For the first six months or for the first eight months of the taxable year in the case of the installment required to be paid in the ninth month; and

(iv) For the first nine months or for the first 11 months of the taxable year, in the case of the installment required to be paid in the 12th month of the taxable year.

(B) For purposes of this paragraph the taxable income shall be placed on an annualized basis by:

(i) Multiplying by 12 the taxable income referred to in subparagraph (A) of this paragraph; and

(ii) Dividing the resulting amount by the number of months in the taxable year (3, 5, 6, 8, 9 or 11, as the case may be) referred to in subparagraph (A) of this paragraph.

(d) An amount equal to 100 percent of the amount obtained by applying section 6655(e) (3)(C) of the Internal Revenue Code to Oregon taxable income.

(e) An election made under section 6655(e) (2)(C) of the Internal Revenue Code (relating to annualization periods) for federal tax purposes shall also apply for purposes of estimated tax under ORS 314.505 (Estimate of tax liability by corporations) to 314.525 (Underpayment of estimated tax).

(3) Interest shall accrue on the underpayment of estimated tax under ORS 314.505 (Estimate of tax liability by corporations) to 314.525 (Underpayment of estimated tax) at the rate established under ORS 305.220 (Interest on deficiency, delinquency or refunds) for the period the estimated tax or any installment thereof remains unpaid. The penalty provisions contained in this chapter and ORS chapters 317 and 318 for underpayment of tax shall not apply to underpayments of estimated tax under ORS 314.505 (Estimate of tax liability by corporations) to 314.525 (Underpayment of estimated tax).

(4) For purposes of subsection (3) of this section, the underpayment of estimated tax shall be the excess of:

(a) The amount of the installment which would be required to be paid if the estimated tax were equal to the lowest of the payments required under subsection (2) of this section (and allowed to be made by the taxpayer under subsection (5) of this section), over

(b) The amount, if any, of the installment paid on or before the last date prescribed for payment.

(5) In the case of a large corporation, subsection (2)(b) of this section shall apply only to determine the amount of the first required installment for any taxable year. Any reduction in the first installment by reason of this subsection shall be added to the amount of the next required installment determined without regard to subsection (2)(b) of this section. For purposes of this subsection, a “large corporation” is any corporation that had federal taxable income, determined without regard to any amount carried to any of the three taxable years under section 172 or 1212(a) of the Internal Revenue Code, of $1 million or more in any of the three taxable years immediately preceding the taxable year involved.

(6) The application of this section to taxable years of less than 12 months shall be in accordance with rules adopted by the Department of Revenue. [1973 c.292 §3; 1981 c.678 §5; 1982 s.s.1 c.16 §9; 1983 c.162 §78; 1985 c.603 §3; 1987 c.293 §61a; 1989 c.625 §63; 1995 c.556 §26; 1997 c.839 §57; 2001 c.660 §33; 2017 c.278 §10]

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/­ors314.­html (2017) (last ac­cessed Mar. 30, 2018).
 
2 Legislative Counsel Committee, Annotations to the Oregon Revised Stat­utes, Cumulative Supplement - 2017, Chapter 314, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ano314.­html (2017) (last ac­cessed Mar. 30, 2018).
 
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.