The Oregon Senate passed a bill to:
- update the state’s income tax Internal Revenue Code (IRC) conformity date to December 31, 2017;
- alter the treatment of the federal temporary dividends received deduction; and
- repeal the addition that unitary groups must make for income or losses from members incorporated in listed tax havens.
Oregon IRC Conformity
The current conformity date is December 31, 2016. The updated conformity date would apply to tax years beginning on or after January 1, 2018. If a taxpayer is entitled to a refund before January 1, 2018, because of any retroactive treatment from the amendments, the refund will be paid without interest.
Dividends Received Deduction
The bill requires an addition to the amount of federal taxable income for tax years after January 1, 2017. The addition is for the amount of the federal temporary dividends received deduction for income repatriated as deferred foreign income.
A state credit would be created for reported repatriated income for the 2017 tax year. The credit could not exceed the amount of:
- Oregon tax attributable to income reported as deferred foreign income for tax years beginning after December 31, 2016 and before January 1, 2018; or
- the total amount of tax, if any, added under Oregon’s tax haven addition imposed for all tax years between December 31, 2013 and December 31, 2016.
The credit could be carried forward for five years.
Tax Haven Addition Repeal
Finally, the addition for income or losses of unitary group members located in listed tax havens would be repealed. The repeal would apply to tax years after December 31, 2016.
S.B. 1529, as passed by the Oregon Senate on February 13, 2018