2017 ORS 315.113¹
Voluntary removal of riparian land from farm production
  • rules

(1) As used in this section:

(a) “Crop” means the total yearly production of an agricultural commodity, not including livestock, that is harvested from a specified area.

(b) “Riparian land” means land in this state that:

(A) Borders both a river, stream or other natural watercourse and land that is in farm production; and

(B) Does not exceed a width of 35 feet between the land that is in farm production and the bank of the river, stream or other natural watercourse.

(c) “Share-rent agreement” means an agreement in which the person who engages in farming operations and the person who owns the land where the farming operations are conducted share the crop grown on that land or the profits from that crop.

(2) A taxpayer may claim a credit against the taxes otherwise due under ORS chapter 316, 317 or 318 for 75 percent of the market value of crops forgone when riparian land is voluntarily taken out of farm production.

(3) A credit under this section may be claimed only if:

(a) The taxpayer owns the riparian land that is the basis of the credit;

(b) The taxpayer is actively engaged in farming operations on land adjacent to the riparian land;

(c) The riparian land was in farm production for the previous tax year or a credit under this section was claimed during the previous tax year;

(d) The conservation practices employed on the riparian land are consistent with the agricultural water quality management plan administered by the State Department of Agriculture in the applicable river basin management area; and

(e) The decision to remove the riparian land from farm production was a voluntary decision and not the result of a federal, state or local law or government decision requiring the riparian land to be taken out of farm production. For purposes of this paragraph, action taken by a taxpayer under an agricultural water quality management plan administered by the State Department of Agriculture is not the result of a government decision requiring the land to be taken out of farm production.

(4)(a) The amount of the credit shall be calculated by multiplying the market value per acre of the forgone crop by the acreage of the riparian land that is not in farm production and multiplying that product by 75 percent.

(b) For the first tax year for which a credit is claimed under this section, the forgone crop for which a value is determined under this section shall be the crop grown on the land in the previous tax year.

(c) For a tax year following the first tax year for which a credit is claimed under this section, the forgone crop for which a value is determined under this section shall be the crop for which the value was determined for the previous tax year.

(d) If a taxpayer does not claim a credit under this section for a tax year, any credit claimed in a subsequent tax year shall be treated as the first tax year for which a credit is claimed under this section.

(5) Notwithstanding subsection (3)(a) and (b) of this section, if the riparian land that is the basis of a credit under this section is adjacent to land that is in farm production under a share-rent agreement, the taxpayer that is engaged in farming operations and the taxpayer that is the landowner may each claim a credit under this section. The amount of the credit shall be allocated to each taxpayer in the proportion that the share-rent agreement allocates crop proceeds to each of those taxpayers. The total amount of credit allowed to both taxpayers under this subsection may not exceed the amount of the credit otherwise allowable under this section if the farming operations were not subject to a share-rent agreement.

(6) Notwithstanding subsections (3)(a) and (5) of this section, if the taxpayer is actively engaged in farming operations and pays the landowner in cash, the taxpayer may claim all of the credit available under this section.

(7) The credit allowed in any one tax year may not exceed the tax liability of the taxpayer.

(8) 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 the next succeeding tax year may be carried forward and used in the second succeeding tax year. Any credit remaining unused in the second succeeding tax year may be carried forward and used in the third succeeding tax year. Any credit remaining unused in the third succeeding tax year may be carried forward and used in the fourth succeeding tax year. Any credit remaining unused in the fourth succeeding tax year may be carried forward and used in the fifth succeeding tax year, but may not be used in any tax year thereafter.

(9) In the case of a credit allowed under this section for purposes of ORS chapter 316:

(a) A nonresident shall be allowed the credit in the same manner and subject to the same limitations as a resident. 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 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 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).

(10) If a taxpayer that has claimed a credit under this section places the riparian land for which the credit is claimed back in farm production, the taxpayer may not claim a credit under this section for five tax years following the year the riparian land was placed back in farm production.

(11) The Department of Revenue may adopt rules prescribing procedures for identifying forgone crops and for establishing the market value of forgone crops. [2001 c.912 §3; 2003 c.46 §32]

Note: Section 6, chapter 913, Oregon Laws 2009, provides:

Sec. 6. Except as provided in ORS 315.113 (Voluntary removal of riparian land from farm production) (8), a credit may not be claimed under ORS 315.113 (Voluntary removal of riparian land from farm production) for tax years beginning on or after January 1, 2012. [2009 c.913 §6]

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/­ors/­ors315.­html (2017) (last ac­cessed Mar. 30, 2018).
 
2 Legislative Counsel Committee, Annotations to the Oregon Revised Stat­utes, Cumulative Supplement - 2017, Chapter 315, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ano315.­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.