2015 ORS 316.683¹
State exempt-interest dividends
  • rules

(1) A regulated investment company, or a pool of assets managed by a fiduciary, including a financial institution, shall be qualified to pay state exempt-interest dividends, as defined in subsection (2) of this section, to its shareholders or beneficiaries.

(2) The term "state exempt-interest dividend" means any dividend or part thereof (other than a capital gain dividend, as defined in section 852(b) of the Internal Revenue Code) paid by a regulated investment company, or any pool of assets managed by a fiduciary, including but not limited to a financial institution, and designated by it as a state exempt-interest dividend in a written notice mailed to its shareholders or beneficiaries not later than 60 days after the close of its taxable year. If the aggregate amount so designated with respect to a taxable year (including state exempt-interest dividends paid after the close of the taxable year in the manner described in section 855 of the Internal Revenue Code) is greater than the excess of (a) the amount of interest and dividends received on obligations described in ORS 316.680 (Modification of taxable income) (1)(a), over (b) the sum of the amount of any deductible interest on indebtedness incurred to carry such obligations and the amount of any deductible expenses incurred in the production of interest and dividend income from such obligations, the portion of such distribution which shall constitute a state exempt-interest dividend shall be only that proportion of the amount so designated as the amount of such excess for such taxable year bears to the amount so designated. The exemption created by this section shall not exceed the portion of the dividend which is attributable to items of interest described in ORS 316.680 (Modification of taxable income) (1)(a).

(3) A state exempt-interest dividend shall be treated by a shareholder or beneficiary for all purposes as an item of interest described in ORS 316.680 (Modification of taxable income) (1)(a). The shareholder or beneficiary shall subtract from federal taxable income the state exempt-interest dividends received with respect to the shares of a regulated investment company or any pool of assets managed by a fiduciary, including but not limited to a financial institution. However, the amount subtracted under this section shall be reduced (but not below zero) by an amount equal to any deductible interest on indebtedness incurred to carry such shares multiplied by the state exempt-interest dividends and divided by the total dividends on such shares for the taxable year.

(4) If a shareholder of a regulated investment company, or a beneficiary of a pool of assets managed by a fiduciary, including a financial institution, receives a state exempt-interest dividend with respect to any share, and the share is held by the taxpayer for six months or less, then any loss on the sale or exchange of the share shall, to the extent of the amount the state exempt-interest dividend, be disallowed. The Department of Revenue may adopt rules that reduce the holding period requirements to less than six months.

(5) As used in this section, "financial institution" means a financial institution as defined in ORS 706.008 (Additional definitions for Bank Act). [1987 c.293 §12b; 1989 c.988 §2; 1993 c.18 §81; 1993 c.229 §24; 1993 c.318 §13; 1997 c.631 §457]

Chapter 316

Notes of Decisions

Unless the divorce decree specifically designates that pay­ments are for child support, pay­ments will be treated as alimony. Henderson v. Dept. of Rev., 5 OTR 153 (1972)

The goal of this chapter is to incorporate all of the pro­vi­sions of the federal Internal Revenue Code; taxable income should be adjusted whenever the result of the adjust­ment is to give effect to the policies or principles of the federal Internal Revenue Code, even though no express authority for the adjust­ment is present in the statutes. Christian v. Dept. of Rev., 269 Or 469, 526 P2d 538 (1974); Smith v. Dept. of Rev., 270 Or 456, 528 P2d 73 (1974)

By its enact­ment of this chapter, the legislature intended to adopt §172 of the federal Internal Revenue Code allowing for the carryback and carryforward of net operating losses. Christian v. Dept. of Rev., 269 Or 469, 526 P2d 538 (1974)

Where plaintiff failed to ap­peal timely as re­quired by this sec­tion, ap­peal rights were not preserved so that cause could be considered on merits. Dela Rosa v. Dept. of Rev., 11 OTR 201 (1989), aff'd 313 Or 284, 832 P2d 1228 (1992)

Where taxpayers paid foreign income taxes on foreign income and claimed foreign taxes paid as federal tax credit and as state business expense deduc­tion, taxpayers who claim federal foreign tax credit are entitled only to foreign tax deduc­tion provided in ORS 316.690 (Foreign income taxes). Whipple v. Dept. of Rev., 309 Or 422, 788 P2d 994 (1990)

For purposes of claim preclusion, all issues re­gard­ing taxpayer's income tax liability for tax year constitute same claim. U.S. Bancorp v. Dept. of Revenue, 15 OTR 13 (1999)

Atty. Gen. Opinions

Political contribu­tions as credit against Oregon tax return, (1974) Vol 37, p 159

Law Review Cita­tions

57 OLR 309 (1978); 16 WLR 373 (1979)


1 Legislative Counsel Committee, CHAPTER 316—Income Tax, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ors316.­html (2015) (last ac­cessed Jul. 16, 2016).
 
2 Legislative Counsel Committee, Annotations to the Oregon Revised Stat­utes, Cumulative Supplement - 2015, Chapter 316, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ano316.­html (2015) (last ac­cessed Jul. 16, 2016).
 
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.