2017 ORS 314.740¹
Tax on built-in gain

(1) If, for any taxable year beginning in the recognition period, an S corporation has a net recognized built-in gain, there is hereby imposed a tax on the income of such corporation for such taxable year.

(2) The amount of the tax imposed under subsection (1) of this section shall be computed by applying the rate of tax specified in ORS 317.061 (Tax rate) to the net recognized built-in gain of the S corporation for the taxable year.

(3) The tax imposed under subsection (1) shall be considered a tax imposed under ORS chapter 317 or 318, whichever is applicable, and shall be returned, estimated, assessed and collected and otherwise treated in the same manner as the tax imposed under ORS chapter 317 or 318. The allocation and apportionment rules of this chapter and ORS chapter 305 apply to the income subject to the tax imposed under this section. The proceeds from the tax shall be distributed in the same manner as the tax imposed under ORS chapter 317 or 318, whichever is applicable.

(4) ORS 317.476 (Net losses of prior years), 317.478 (Pre-change and built-in losses) and 317.479 (Limitation on use of preacquisition losses to offset built-in gain) shall not apply to the tax imposed under this section. Notwithstanding ORS 314.732 (Taxation of S corporation) (2)(c), any net operating loss carryforward arising in a taxable year for which the corporation was a C corporation shall be allowed for purposes of the tax imposed under this section as a deduction against the net recognized built-in gain of the S corporation for the taxable year. For purposes of determining the amount of any such loss which may be carried to any of the 15 subsequent taxable years, the amount of the net recognized built-in gain shall be treated as taxable income.

(5)(a) Except for estimated and other advance tax payments and except as provided under paragraph (b) of this subsection, no credits shall be allowed against the tax imposed under this section.

(b) Notwithstanding ORS 314.732 (Taxation of S corporation) (2)(c), any credit carryforward under ORS chapter 317 or 318 arising in a taxable year for which the corporation was a C corporation shall be allowed as a credit against the tax imposed under this section in the same manner as if it were the tax imposed under ORS chapter 317 or 318.

(6) To the extent applicable, the definitions, special rules and interpretations and other provisions of section 1374 of the Internal Revenue Code that relate to the measurement of built-in gain shall apply to the tax imposed under this section. [1989 c.625 §46; 1997 c.839 §61]

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.