The Oregon Legislature convenes on January 22, 2019, and there are a myriad of proposed bills that would make changes to the state’s corporate tax laws. A group of introduced bills would increase the state’s corporate tax rate or the corporate minimum tax. House Bills 2156 and 2145 would increase the corporate excise tax rate from 6.6 percent to 7.0 percent on the first $1 million of taxable income and from 7.6 to 8.0 percent on taxable income in excess of $1 million. House Bill 2636 would revise the minimum tax to be .03 percent of Oregon sales for taxpayers with Oregon sales of $500,000 or more. The bill would also restructure the excise tax rate schedule and increase the rate to 9.9 percent on income over $125,000. House Bill 2163 would revise the minimum tax to be .01 percent of Oregon sales for taxpayers with receipts over $100 million. Senate Bill 208 would increase the minimum tax flat dollar amounts; the highest minimum tax on taxpayers with $100 million or more in Oregon sales would be increased, for example, from $100,000 to $115,000. House Bill 2160 would extend the minimum tax to corporations making sales into Oregon from outside the state. Currently, the minimum tax is imposed on corporations filing an Oregon return.
House Bill 2148 and Senate Bill 206 appear to be in response to the Wayfair decision and, if enacted, would adopt a $100,000 of Oregon sales economic nexus standard for corporate income tax purposes. Three other bills (House Bill 2147, House Bill 2162 and Senate Bill 207) would adopt the so-called Finnigan apportionment methodology effective for tax years beginning on or after January 1, 2020. Finally, House Bill 2149 and House Bill 2697 would amend Oregon law to provide that in determining whether two or more corporations included in the same consolidated federal return are engaged in a unitary business, reference can be made to any corporation that is (1) owned or controlled directly or indirect by the same interests and (2) incorporated in the U.S. or a foreign country. The reference to foreign corporations is not currently in the statute. Please stay tuned to TWIST for future legislative updates.