ORS 315.119
On-farm processing facilities


(1)

As used in this section:

(a)

“Effective property tax rate” means:

(A)

The ratio of the total amount of property taxes imposed on the account that contains the machinery and equipment for which a credit is being claimed (after application of ORS 310.150 (Segregation into categories) but prior to discount under ORS 311.505 (Due dates)) over the assessed value of the property tax account; and

(B)

The ratio determined under subparagraph (A) of this paragraph for the property tax year that begins in the income tax year for which the credit is claimed.

(b)

“Farm operator” means a person that operates a farming business as defined in section 263A of the Internal Revenue Code.

(c)

“Machinery and equipment” means machinery and equipment that meets the definition of section 1245 property in section 1245 of the Internal Revenue Code.

(d)

“Processing”:

(A)

Means any activity that is directly related and necessary to clean, sort, grade, produce, prepare, manufacture, handle, package, store or ship a farm crop or livestock product after the point of harvest and before the point of sale, in a modified state or altered form.

(B)

Does not include an activity primarily associated with the promotion or retail sale of a product for personal or household use that is normally sold through consumer retail distribution.

(e)

“Qualified machinery and equipment” means machinery and equipment used in processing that meets the requirements of subsections (3) and (4) of this section for the tax year.

(2)

A taxpayer who is a farm operator may claim a credit against the taxes that are otherwise due under ORS chapter 316 or, if the taxpayer is a corporation, under ORS chapter 317 or 318 for ad valorem property taxes paid or incurred on qualified machinery and equipment.

(3)

A credit under this section may be claimed only if:

(a)

The machinery and equipment is owned by the farm operator or by a person who is related to the farm operator under section 267 of the Internal Revenue Code;

(b)

The machinery and equipment is used for processing primarily occurring on land described in subsection (4) of this section; and

(c)

Intentionally left blank —Ed.

(A)

The farm operator has grown or raised at least one-half of the total volume of farm crop or livestock products processed with the machinery and equipment for which the credit is being claimed in three of the five previous income tax years; or

(B)

Intentionally left blank —Ed.
(i)
The farm operator has grown or raised at least one-tenth of the total volume of farm crop or livestock products processed with the machinery and equipment for which the credit is being claimed in three of the five previous income tax years; and
(ii)
The farm operator has used the machinery and equipment to process at least one-half of the volume of the applicable farm crop or livestock products grown or raised by the farm operator in three of the five previous income tax years.

(4)

In addition to the requirements under subsection (3) of this section, a credit under this section may be claimed only if:

(a)

The machinery and equipment is located on land that is specially assessed for farm use under ORS 308A.050 (Legislative intent) to 308A.128 (Certain district assessments inapplicable to exclusive farm use zone farmland) and the machinery and equipment is owned or otherwise controlled by the farm operator; or

(b)

The machinery and equipment is located on land that is contiguous to land that is specially assessed for farm use under ORS 308A.050 (Legislative intent) to 308A.128 (Certain district assessments inapplicable to exclusive farm use zone farmland) and the machinery and equipment is owned or otherwise controlled by the farm operator.

(5)

A credit may be claimed under this section only for qualified machinery and equipment that was subject to assessment and property taxation for the property tax year beginning in the income tax year for which the credit is being claimed.

(6)

The amount of the credit shall be the lesser of:

(a)

The effective property tax rate multiplied by the adjusted basis of the qualified machinery and equipment; or

(b)

$30,000.

(7)

The adjusted basis of the qualified machinery and equipment shall be the adjusted basis of the qualified machinery and equipment for personal income or corporate excise or income tax purposes as of the last day of the income tax year for which the credit is being claimed, except that the adjusted basis shall be increased by the cost of any qualified machinery and equipment that the taxpayer elected to expense under section 179 of the Internal Revenue Code, until the qualified machinery and equipment is fully depreciated for personal income or corporate excise or income tax purposes. The adjusted basis shall reflect any depreciation allowable for the current tax year. A credit under this section may not be allowed for a tax year in which the qualified machinery and equipment is fully depreciated for personal income or corporate excise or income tax purposes.

(8)

The credit allowed under this section for any one tax year may not exceed the tax liability of the taxpayer.

(9)

Any tax credit otherwise allowable under this section that is not used by the taxpayer in a particular 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, 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)

The credit allowed under this section is not in lieu of any depreciation or amortization deduction to which the taxpayer otherwise may be entitled under ORS chapter 316, 317 or 318 for the tax year.

(11)

The taxpayer’s adjusted basis for determining gain or loss may not be further decreased by any amount of credit allowed under this section.

(12)

A nonresident shall be allowed the credit under this section in the proportion provided in ORS 316.117 (Proration between Oregon income and other income for nonresidents, part-year residents and trusts).

(13)

If a change in the status of a taxpayer from resident to nonresident or from nonresident to resident occurs, the credit allowed under 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).

(14)

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 under this section shall be prorated or computed in a manner consistent with ORS 314.085 (Taxable year). [2001 c.725 §3]
Note: Section 5, chapter 725, Oregon Laws 2001, provides:
Sec. 5. (1) Sections 3 and 4 of this 2001 Act [315.119 (On-farm processing facilities) and 315.123 (Minimum production and processing volume requirements)] apply to tax years beginning on or after January 1, 2002.

(2)

Except as provided in section 3 (9) of this 2001 Act [315.119 (On-farm processing facilities) (9)], credits allowed under section 3 of this 2001 Act apply to tax years beginning before January 1, 2008. [2001 c.725 §5]

Source: Section 315.119 — On-farm processing facilities, https://www.­oregonlegislature.­gov/bills_laws/ors/ors315.­html.

315.004
Definitions
315.037
Tax expenditures applicable for limited time
315.044
Statement of purpose
315.047
List of tax credits with revenue impact in excess of projection
315.051
Report by Legislative Revenue Officer
315.052
Limitation on transfer or sale of credit
315.053
Restriction on types of transferees
315.054
Federal tax credits allowable only as specified
315.056
Conditions for transfer of tax credit
315.058
Agency to provide tax credit approval information to Department of Revenue
315.061
Suspension, revocation or forfeiture
315.063
Waiver of substantiation by Department of Revenue
315.068
Claim of right income repayment adjustments
315.104
Reforestation
315.106
Reforestation credit preliminary certificate
315.108
Annual reforestation credit cost limitation
315.111
Legislative declarations regarding riparian land conservation
315.113
Voluntary removal of riparian land from farm production
315.117
Legislative findings and declarations regarding on-farm processing
315.119
On-farm processing facilities
315.123
Minimum production and processing volume requirements
315.138
Screening devices, by-pass devices or fishways
315.141
Biomass production or collection
315.144
Transfer of biomass credit
315.154
Definitions for crop donation credit
315.156
Crop donation
315.163
Definitions for ORS 315.163 to 315.169
315.164
Agriculture workforce housing projects
315.167
Agriculture workforce housing credit application
315.169
Agriculture workforce housing contributor credit
315.171
Tax credit limit for biennium
315.174
Livestock killed by wolf
315.176
Bovine manure production or collection
315.184
Annual limitation on total amount of tax credits
315.204
Dependent care assistance
315.208
Dependent care facilities
315.213
Contributions to Office of Child Care
315.237
Employee and dependent scholarship program payments
315.262
Working family child care
315.264
Working family household and dependent care expenses
315.266
Earned income
315.271
Individual development accounts
315.272
Certain individual development account withdrawals
315.304
Pollution control facilities
315.326
Renewable energy development contributions
315.329
Funding in lieu of tax credit certification
315.331
Energy conservation projects
315.336
Transportation projects
315.341
Renewable energy resource equipment manufacturing facilities
315.354
Energy conservation facilities
315.356
Other grants as offset to cost of energy conservation facility
315.357
Time limit applicable to energy conservation tax credit
315.465
Biofuels and fuel blends
315.469
Biodiesel used in home heating
315.506
New business facility in reservation enterprise zone or reservation partnership zone
315.507
Electronic commerce in designated enterprise zone
315.508
Recordkeeping requirements
315.514
Film production development contributions
315.516
Funding in lieu of tax credit certification
315.517
Water transit vessels
315.523
Employee training
315.526
Short title
315.529
Definitions
315.533
Qualified equity investments
315.536
Transferability of credit
315.591
Definitions
315.593
Short line railroad rehabilitation projects
315.595
Preliminary certification
315.597
Final certification
315.599
Fees
315.603
Tax credit limit for biennium
315.610
Long term care insurance
315.613
Credit available to persons providing rural medical care and affiliated with certain rural hospitals
315.616
Additional providers who may qualify for credit
315.619
Credit for medical staff at type C hospital
315.622
Rural emergency medical services providers
315.624
Medical care to residents of Oregon Veterans’ Home
315.628
Health care services under TRICARE contract
315.631
Certification of health care providers
315.640
University venture development fund contributions
315.643
Opportunity Grant contributions
315.646
Funding in lieu of tax credit certification
315.650
Higher education savings account or ABLE account contributions
315.653
Forfeiture of prior tax relief
315.675
Trust for Cultural Development Account contributions
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