68th OREGON LEGISLATIVE ASSEMBLY--1995 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 3617
House Bill 3425
Sponsored by Representative BEYER, Senator DWYER; Representatives
CARTER, CORCORAN, PROZANSKI, WOOTEN, Senators McCOY, SORENSON,
TROW
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
Imposes gross receipts tax. Reduces property taxes by amounts
received from gross receipts tax.
Requires that person who engages in business in state or who is
required to collect education tax must register with Department
of Revenue. Punishes violations of provisions of Act by maximum
of one year in county jail, $1,000 fine, or both. Provides that
person who engages in business in state when registration is
revoked is guilty of Class C felony. Punishes by maximum of five
years imprisonment, $100,000 fine, or both. Provides additional
criminal penalties for certain violations.
Appropriates moneys.
Becomes operative July 1, 1996.
A BILL FOR AN ACT
Relating to finance; and appropriating money.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + Short title. + } { + Sections 1 to 131 of this
Act may be cited as the Oregon Education Tax Act. + }
{ +
DEFINITIONS + }
SECTION 2. { + Construction. + } { + Unless the context
requires otherwise, the definitions contained in sections 2 to 32
of this Act shall govern the construction of sections 1 to 131 of
this Act. + }
SECTION 3. { + Business. + } { + ' Business' includes all
activities engaged in with the object of gain, benefit or
advantage to the taxpayer or to another person or class, directly
or indirectly. + }
SECTION 4. { + By-product. + } { + ' By-product' means any
additional product, other than the principal or intended product,
which results from extracting or manufacturing activities and
which has a market value without regard to whether or not such
additional product was an expected or intended result of the
extracting or manufacturing activity. + }
SECTION 5. { + Cash discount. + } { + ' Cash discount' means
a deduction from the invoice price of goods or charge for
services which is allowed if the bill is paid on or before a
specified date. + }
SECTION 6. { + Casual or isolated sale. + } { + ' Casual or
isolated sale' means a sale made by a person who is not engaged
in the business of selling the type of property involved. + }
SECTION 7. { + Commercial or industrial use. + } { + '
Commercial or industrial use' means the following uses of
products, including by-products, by the extractor or manufacturer
thereof:
(1) Any use as a consumer.
(2) The manufacturing of articles, substances or
commodities. + }
SECTION 8. { + Competitive telephone service, network
telephone service, telephone service, telephone business. (1)
'Competitive telephone service' means the providing by any person
of telecommunications equipment or apparatus, or service related
to that equipment or apparatus, including, but not limited to,
repair or maintenance service, if the equipment or apparatus is
of a type which can be provided by persons not subject to
regulation as telephone companies and for which a separate charge
is made.
(2) 'Network telephone service' means the providing by any
person of access to a local telephone network, local telephone
network switching service, toll service or coin telephone
services, or the providing of telephonic, video, data or similar
communication or transmission for hire, via a local telephone
network, toll line or channel, cable, microwave or similar
communication or transmission system. 'Network telephone service'
includes interstate service, including toll service, originating
from or received on telecommunications equipment or apparatus in
this state if the charge for the service is billed to a person in
this state. 'Network telephone service' does not include the
providing of competitive telephone service or the providing of
cable television service, nor the providing of broadcast services
by radio or television stations.
(3) 'Telephone business' means the business of providing
network telephone service, as defined in subsection (2) of this
section. It includes cooperative or farmer line telephone
companies or associations operating an exchange.
(4) 'Telephone service' means competitive telephone service or
network telephone service, or both, as defined in subsections (1)
and (2) of this section. + }
SECTION 9. { + Consumer. (1) 'Consumer' means:
(a) Any person who purchases, acquires, owns, holds or uses any
article of tangible personal property irrespective of the nature
of the business of the person.
(b) Any person who installs, repairs, cleans, alters, improves,
constructs or decorates real or personal property of or for
consumers, other than for one or more of the following purposes:
(A) Resale as tangible personal property in the regular course
of business.
(B) Incorporation of such property as an ingredient or
component of real or personal property when installing,
repairing, cleaning, altering, imprinting, improving,
constructing or decorating such real or personal property of or
for consumers.
(C) Consumption of such property in producing for sale a new
article of tangible personal property or a new substance, of
which such property becomes an ingredient or component or as a
chemical used in processing, when the primary purpose of such
chemical is to create a chemical reaction directly through
contact with an ingredient of a new article being produced for
sale.
(D) Purchases for the purpose of consuming the property
purchased in producing ferrosilicon that is subsequently used in
producing magnesium for sale, if the primary purpose of such
property is to create a chemical reaction directly through
contact with an ingredient of ferrosilicon.
(c) Any person engaged in any business activity taxable under
section 42 of this Act and any person who purchases, acquires or
uses any telephone service as defined in section 8 of this Act
other than for resale in the regular course of business.
(d) Any person engaged in the business of contracting for the
building, repairing or improving of any street, place, road,
highway, easement, right of way, mass public transportation
terminal or parking facility, bridge, tunnel or trestle which is
owned by a municipal corporation or political subdivision of the
State of Oregon, the State of Oregon or by the United States and
which is used, or to be used, primarily for foot or vehicular
traffic including mass transportation vehicles of any kind, as
described in section 41 of this Act.
(e) Any person who, in respect to tangible personal property,
incorporates the property as an ingredient or component of a
publicly owned street, place, road, highway, easement, right of
way, mass public transportation terminal or parking facility,
bridge, tunnel or trestle by installing, placing or spreading the
property in or upon the right of way of the street, place, road,
highway, easement, bridge, tunnel or trestle, or in or upon the
site of the mass public transportation terminal or parking
facility.
(f) Any person who is an owner, lessee or has the right of
possession to, or an easement in, real property which is being
constructed, repaired, decorated, improved or otherwise altered
by a person engaged in business, except:
(A) The State of Oregon or municipal corporations or political
subdivisions of the state in respect to labor and services
rendered to the real property of the corporation or subdivision
which is used or held for public road purposes.
(B) The United States or instrumentalities thereof in respect
to labor and services rendered to their real property.
(g) Any person who is an owner, lessee or has the right of
possession to personal property which is being constructed,
repaired, improved, cleaned, imprinted or otherwise altered by a
person engaged in business.
(h) Any person engaged in the business of constructing,
repairing, decorating or improving new or existing buildings or
other structures under, upon or above real property of or for the
State of Oregon, a municipal corporation or political subdivision
of the State of Oregon, or the United States or any
instrumentality thereof, including the installing or attaching of
any article of tangible personal property therein or thereto,
whether or not such personal property becomes a part of the
realty by virtue of installation.
(i) Any person engaged in the business of clearing land and
moving earth of or for the State of Oregon, a municipal
corporation or political subdivision of the State of Oregon, the
United States or any instrumentality thereof.
(2) A person shall be a consumer within the meaning of
subsection (1)(h) and (i) of this section in respect to tangible
personal property incorporated into, installed in or attached to
buildings or other structures by the person. Nothing contained in
this or any other subsection of this definition shall be
construed to modify any other definition of 'consumer.' + }
SECTION 10. { + Department. + } { + ' Department' means the
Department of Revenue. + }
SECTION 11. { + Education tax. + } { + ' Education tax'
means the taxes imposed by sections 1 to 131 of this Act. + }
SECTION 12. { + Engaging in business. + } { + ' Engaging in
business ' means commencing, conducting or continuing in business
and also the exercise of corporate or franchise powers, as well
as liquidating a business when the liquidators thereof hold
themselves out to the public as conducting business. + }
SECTION 13. { + Extractor. + } { + (1) 'Extractor' means
every person who from the land of the person or from the land of
another person under a right or license granted by lease or
contract, either directly or by contracting with others for the
necessary labor or mechanical services, for sale or for
commercial or industrial use:
(a) Mines, quarries, takes or produces coal, oil, natural gas,
ore, stone, sand, gravel, clay, mineral or other natural resource
product.
(b) Fells, cuts or takes timber, cultured Christmas trees or
other natural products or agricultural products.
(c) Takes fish or takes, cultivates or raises shellfish or
other sea or inland water foods or products.
(2) 'Extractor' includes a person who extracts for hire.
(3) 'Extractor' does not include persons performing under
contract the necessary labor or mechanical services for
others. + }
SECTION 14. { + Gross income of the business. + } { + (1)
'Gross income of the business' means the value proceeding or
accruing by reason of the transaction of the business engaged in
and includes, but is not limited to, gross proceeds of sales,
compensation for the rendition of services, gains realized from
trading in stocks, bonds or other evidences of indebtedness,
interest (other than interest which the state is prohibited from
taxing by federal Constitution or law), discount, rents,
royalties, fees, commissions, dividends and other emoluments
however designated, all without any deduction on account of the
cost of tangible property sold, the cost of materials used, labor
costs, interest, discount, delivery costs, taxes or any other
expense whatsoever paid or accrued and without any deduction on
account of losses.
(2) If gross income of the business is attributable to
activities both within and without this state, the gross income
of the business shall be apportioned to this state in the
proportion that the income that is derived from services rendered
or activities engaged in within this state bears to gross income
of the business from services rendered or activities engaged in
everywhere.
(3) If apportionment as described under subsection (2) of this
section cannot be accurately made by separate accounting methods,
the taxpayer shall apportion to this state that proportion of
total income which the cost of doing business within the state
bears to the total cost of doing business both within and without
the state.
(4) Notwithstanding subsections (2) and (3) of this section, if
gross income from the business is attributable to activities
engaged in both within and without this state, the Department of
Revenue may adopt rules permitting or requiring the apportionment
of the gross income to this state consistent with uniform rules
for apportionment or allocation described under ORS 305.655 or
314.605 to 314.670. Rules adopted under this subsection may be of
general applicability or may apply only to specific business
activities. + }
SECTION 15. { + Gross proceeds of sales. + } { + ' Gross
proceeds of sales' means the value proceeding or accruing from
the sale of tangible personal property or for services rendered,
without any deduction on account of the cost of property sold,
the cost of materials used, labor costs, interest, discount paid,
delivery costs, taxes or any other expense whatsoever paid or
accrued and without any deduction on account of losses. + }
SECTION 16. { + Improvement. + } { + ' Improve' or
'improvement' in the case of real or personal property includes
but is not limited to construction, reconstruction, renovation,
rehabilitation, reconditioning, refurbishment, alteration,
installation, repair, maintenance, cleaning, alteration,
decoration, fabrication, printing or imprinting. + }
SECTION 17. { + In this state. + } { + ' In this state' or
'within this state' includes all federal areas lying within the
boundaries of the state. + }
SECTION 18. { + Local government unit. + } { + ' Local
government unit ' or 'unit of local government' has the meaning
given unit of local government under ORS 190.003. + }
SECTION 19. { + Manufacturer. (1) 'Manufacturer' means every
person who, either directly or by contracting with others for the
necessary labor or mechanical services, manufactures for sale or
for commercial or industrial use, from materials or ingredients,
any articles, substances or commodities.
(2) If the owner of equipment or facilities furnishes, or sells
to the customer prior to manufacture, all or a portion of the
materials that become a part or whole of the manufactured
article, the Department of Revenue shall prescribe equitable
rules for determining tax liability.
(3) A nonresident of this state who is the owner of materials
processed in this state by a processor for hire shall not be
deemed to be engaged in business in this state as a manufacturer
because of the performance of such processing work.
(4) 'Manufacture,' as used in this section, embraces all
activities of a commercial or industrial nature wherein labor or
skill is applied, by hand or machinery, to materials so that as a
result thereof a new, different or useful substance or article of
tangible personal property is produced for sale or commercial or
industrial use, and shall include the production or fabrication
of special made or custom made articles. + }
{ + (5) 'Manufacture' includes processing for hire. + } { +
+ } { + SECTION 20. + } { + Person. 'Person' means any
individual, receiver, administrator, executor, assignee, trustee
in bankruptcy, trust, estate, firm, copartnership, joint venture,
club, company, joint stock company, business trust, the State of
Oregon, a municipal corporation or political subdivision of the
State of Oregon, corporation, association, society or any group
of individuals acting as a unit, whether mutual, cooperative,
fraternal, nonprofit or otherwise and the United States or any
instrumentality thereof. + }
SECTION 21. { + Cultured Christmas trees. + } { + ' Cultured
Christmas trees' means Christmas trees which are exempt from the
timber severance tax under ORS 321.747. + }
SECTION 22. { + Retail store, outlet. + } { + (1) 'Retail
store' or ' retail outlet' includes automats or business
establishments retailing diversified goods primarily through the
use of devices or apparatus through which sales are activated by
coin deposits.
(2) 'Retail store' or 'retail outlet' does not include a device
or apparatus through which sales are activated by coin
deposits. + }
SECTION 23. { + Sale. 'Sale' means any transfer of the
ownership of, title to or possession of property for a valuable
consideration. 'Sale' includes:
(1) Renting or leasing, conditional sale contracts, leases with
option to purchase and any contract under which possession of the
property is given to the purchaser but title is retained by the
vendor as security for the payment of the purchase price.
(2) The furnishing of food, drink or meals for compensation
whether consumed upon the premises or not. + }
SECTION 24. { + Sale at retail. (1) 'Sale at retail' or '
retail sale' means every sale of an article of tangible personal
property to any person without regard to the nature of the
business of the person or if the person is engaged in business
and includes but is not limited to the following:
(a) A sale to a person who improves real or personal property
of or for a consumer.
(b) A sale of an article produced, fabricated or imprinted.
(c) A sale of an article that is used or consumed or to be used
or consumed in the performance of any activity classified as a
sale at retail even though the article is resold or utilized
after the use.
(d) A sale to a person engaged in any business that is taxable
under section 42 of this Act (services and related activities)
with respect to that business.
(e) A sale to a person engaged in business that is taxable
under section 41 (1)(b) of this Act (United States and state and
local government highway contractor) with respect to that
business.
(f) A sale to a person engaged in business that is taxable
under section 41 (1)(c) of this Act (government building
contractor) with respect to that business.
(2) 'Sale at retail' or 'retail sale' includes the renting or
leasing of tangible personal property to consumers.
(3) 'Sale at retail' or 'retail sale' does not include:
(a) The sale of, or charge made for, labor and services
rendered in respect to the building, repairing or improving of
any street, place, road, highway, easement, right of way, mass
public transportation terminal or parking facility, bridge,
tunnel or trestle that is owned by the United States, its
instrumentality, this state or a unit of local government and
which is used or to be used primarily for foot or vehicular
traffic including mass transportation.
(b) The sale of or charge made for labor and services rendered
in respect to the constructing, repairing, decorating or
improving of new or existing buildings or other structures under,
upon or above real property of or for the United States, its
instrumentality, this state or a unit of local government, or to
the installing or attaching of any article of tangible personal
property therein or thereto, whether or not such personal
property becomes a part of the realty by virtue of installation.
(c) The sale of services or charges made for the clearing of
land and the moving of earth of or for the United States, its
instrumentality, this state or a unit of local government.
(4) 'Sale at retail' or 'retail sale' does not include a sale
to a person who:
(a) Purchases for the purpose of resale as tangible personal
property in the regular course of business without intervening
use by the person.
(b) Installs, repairs, cleans, alters, imprints, improves,
constructs or decorates real or personal property of or for
consumers, if the tangible personal property becomes an
ingredient or component of the real or personal property without
intervening use by the person.
(c) Purchases for the purpose of consuming the property
purchased in producing for sale a new article of tangible
personal property or substance, of which the property becomes an
ingredient or component or is a chemical used in processing, when
the primary purpose of such chemical is to create a chemical
reaction directly through contact with an ingredient of a new
article being produced for sale. + }
SECTION 25. { + Sale at wholesale, wholesale sale. (1) 'Sale
at wholesale' or 'wholesale sale' means any sale of tangible
personal property, or any sale of telephone service as defined in
section 8 of this Act, which is not a sale at retail.
(2) 'Sale at wholesale' means any charge made for labor and
services rendered for persons who are not consumers, in respect
to real or personal property, if such charge is expressly defined
as a 'retail sale' in section 24 of this Act, when rendered to or
for consumers.
(3) As used in this section, 'real or personal property ' shall
not include any natural products named in section 13 of this
Act. + }
SECTION 26. { + Sale at wholesale, sale at retail. (1) As used
in sections 1 to 131 of this Act, 'wholesale sale,' 'sale at
wholesale,' 'retail sale' and 'sale at retail' do not include the
sale of precious metal bullion or monetized bullion.
(2) In computing the tax imposed in sections 1 to 131 of this
Act on the business of making sales of precious metal bullion or
monetized bullion, the tax shall be imposed on the amounts
received as commissions upon transactions for the accounts of
customers over and above the amount paid to other dealers
associated in such transactions.
(3) As used in this section, the amount of tax computed in the
sale of precious metal bullion or monetized bullion does not
include a deduction or offset for salaries or commissions paid to
salespeople or other employees.
(4) As used in this section, 'precious metal bullion ' means
any precious metal which has been put through a process of
smelting or refining, including, but not limited to, gold,
silver, platinum, rhodium and palladium and which is in such
state or condition that its value depends upon its contents and
not upon its form.
(5) As used in this section, 'monetized bullion' means coins or
other forms of money manufactured from gold, silver or other
metals used as a medium of exchange under the laws of this state,
the United States or any foreign nation, but does not include
coins or money sold to be manufactured into jewelry or works of
art. + }
SECTION 27. { + Successor. (1) 'Successor' means any person to
whom a taxpayer quitting, selling out, exchanging or disposing of
a business sells or otherwise conveys, directly or indirectly, in
bulk and not in the ordinary course of the business of the
taxpayer, a major part of the materials, supplies, merchandise,
inventory, fixtures or equipment of the taxpayer.
(2) As used in this section, any person obligated to fulfill
the terms of a contract shall be deemed a successor to any
contractor defaulting in the performance of any contract as to
which such person is a surety or guarantor. + }
SECTION 28. { + Tax year. 'Tax year' or 'taxable year' means
either the calendar year or, when permission is obtained from the
Department of Revenue to use a fiscal year in lieu of the
calendar year, the fiscal year of the taxpayer. + }
SECTION 29. { + To manufacture. (1) 'To manufacture' embraces
all activities of a commercial or industrial nature where labor
or skill is applied, by hand or machinery, to materials so that
as a result thereof a new, different or useful substance or
article of tangible personal property is produced for sale or
commercial or industrial use, and shall include the production or
fabrication of special made or custom made articles.
(2) As used in this section, 'to manufacture' shall not include
conditioning of seed for use in planting or activities which
consist of cutting, grading or ice-glazing seafood which has been
cooked, frozen or canned outside this state. + }
SECTION 30. { + Tuition fee. (1) 'Tuition fee' includes
library, laboratory, health service and other special fees and
amounts charged for room and board by an educational institution
when the property or service for which such charges are made is
furnished exclusively to the students or faculty of such
institution.
(2) 'Educational institution,' as used in this section, means
only those institutions created or generally accredited as such
by the state or defined as a degree granting institution and
accredited by an accrediting association recognized by the United
States Secretary of Education:
(a) Which offer to students an educational program of a general
academic nature; or
(b) Which are not operated for profit and which are privately
endowed under a deed of trust to offer instruction in trade,
industry and agriculture.
(3) As used in this section, 'educational institution ' does
not include specialty schools, business colleges, other trade
schools or similar institutions. + }
SECTION 31. { + Value of products. (1) The 'value of
products,' including by-products, extracted or manufactured,
shall be determined by the gross proceeds derived from the sale
thereof whether such sale is at wholesale or at retail, to which
shall be added all subsidies and bonuses received from the
purchaser or from any other person with respect to the
extraction, manufacture or sale of the products or by-products by
the seller, except:
(a) Where the products, including by-products, are extracted or
manufactured for commercial or industrial use; or
(b) Where the products, including by-products, are shipped,
transported or transferred out of the state, or to another
person, without prior sale or are sold under circumstances such
that the gross proceeds from the sale are not indicative of the
true value of the subject matter of the sale.
(2) In cases described in subsection (1)(a) or (b) of this
section, the value shall correspond as nearly as possible to the
gross proceeds from sales in this state of similar products of
like quality and character, and in similar quantities, by other
taxpayers plus the amount of subsidies or bonuses ordinarily
payable by the purchaser or by any third person with respect to
the extraction, manufacture or sale of the products. + }
SECTION 32. { + Value proceeding or accruing. 'Value
proceeding or accruing' means the consideration, whether money,
credits, rights or other property expressed in terms of money,
actually received or accrued. The term shall be applied, in each
case, on a cash receipts or accrual basis according to which
method of accounting is regularly employed in keeping the books
of the taxpayer. The Department of Revenue may provide by rule
that the value proceeding or accruing from sales on the
installment plan under conditional contracts of sale may be
reported as of the dates when the payments become due. + }
{ +
IMPOSITION OF TAX + }
SECTION 33. { + Imposition of tax generally. There is imposed
and shall be collected from every person a tax for the act or
privilege of engaging in business. The tax shall be measured by
the application of the schedule set forth in section 34 of this
Act to the designated multiple of the value of products, gross
proceeds of sales or gross income of the business, as provided in
sections 1 to 131 of this Act. + }
SECTION 34. { + Tax rate schedule. The rate of tax imposed
under this Act shall be as follows: + }
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
{ +
Rates
Gross 10/01/93 to6/01/95
Receipts 5/31/95 and
thereafter + }
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
{ +
$0 - 300,00% 0%
$300,1,000,000 0.45% 0.6%
$1,002,000,000 0.55% 0.73%
$2,005,000,000 0.75%1.0% + }
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
{ +
5,000,000 and ab1.01.33% + }
____________________________________________________________
END OF POSSIBLE IRREGULAR TABULAR TEXT
____________________________________________________________
SECTION 35. { + Extractors. (1) The amount of the education
tax upon every person who engages in business within this state
as an extractor is equal to the value of the products, including
by-products, extracted for sale or for commercial or industrial
use multiplied by 1.00 times the applicable rates set forth in
section 34 of this Act.
(2) The measure of the tax is the value of the products,
including by-products, so extracted, regardless of the place of
sale or the fact that deliveries may be made to points outside
the state. + }
SECTION 36. { + Manufacturers. (1) The amount of the education
tax imposed upon every person who engages in business within this
state as a manufacturer is equal to the value of the products
manufactured, including by-products, multiplied by 1.00 times the
applicable rates set forth in section 34 of this Act.
(2) The measure of the tax is the value of the products,
including by-products, so manufactured regardless of the place of
sale or the fact that deliveries may be made to points outside
the state. + }
SECTION 37. { + Retailers. For every person who engages in the
business within this state of making sales at retail, the amount
of education tax with respect to such business shall be equal to
the gross proceeds of sales of the business multiplied by 1.00
times the applicable rates set forth in section 34 of this
Act. + }
SECTION 38. { + Real estate brokers. (1) For every person who
engages in business within this state as a real estate broker,
the amount of the education tax with respect to such business
shall be equal to the gross income of the business multiplied by
1.00 times the applicable rates set forth in section 34 of this
Act.
(2) The measure of the tax on real estate commissions earned by
the real estate broker shall be the gross commission earned by
the particular real estate brokerage office including that
portion of the commission paid to salespersons or associate
brokers in the same office on a particular transaction.
(3) The tax imposed by subsection (1) of this section does not
apply where a real estate commission is divided between an
originating brokerage office and a cooperating brokerage office
on a particular transaction. If the commission is divided between
two separate brokerage offices, each brokerage office shall pay
the tax only upon its respective share of the commission.
(4) Where the brokerage office has paid the tax as provided in
subsection (1) of this section, the salespersons or associate
brokers within the same brokerage office shall not be required to
pay a similar tax upon the same transaction. + }
SECTION 39. { + Tax on buyer and wholesaler of wheat, oats,
dry peas, dry beans, lentils, triticale, corn, rye and
barley--Flour, pearl barley and oil manufacturers--Seafood
products manufacturers--Fruit and vegetable processors--Research
and development organizations--Perishable meat products
processors and wholesalers--Travel agents--Certain international
activities--Stevedoring and associated activities--Low-level
waste disposers--Insurance agents, brokers and solicitors. For
every person engaging within this state:
(1) In the business of buying wheat, oats, dry peas, dry beans,
lentils, triticale, corn, rye and barley, and selling the same at
wholesale, the education tax imposed shall be equal to the gross
proceeds derived from such sales multiplied by 1.00 times the
applicable rates set forth in section 34 of this Act.
(2) In the business of manufacturing wheat into flour, barley
into pearl barley, soybeans into soybean oil or sunflower seeds
into sunflower oil, the amount of education tax with respect to
such business shall be equal to the value of the flour, pearl
barley or oil manufactured, multiplied by 1.00 times the
applicable rates set forth in section 34 of this Act.
(3) In the business of splitting or processing dried peas, the
amount of education tax with respect to such business shall be
equal to the value of the peas split or processed, multiplied by
1.00 times the applicable rate set forth in section 34 of this
Act.
(4) In the business of manufacturing seafood products which
remain in a raw, raw frozen or raw salted state at the completion
of the manufacturing by that person, the amount of education tax
with respect to such business shall be equal to the value of the
products manufactured multiplied by 1.00 times the applicable
rates set forth in section 34 of this Act.
(5) In the business of manufacturing by canning, preserving,
freezing or dehydrating fresh fruits and vegetables, the amount
of education tax with respect to such business shall be equal to
the value of the products canned, preserved, frozen or dehydrated
multiplied by 1.00 times the applicable rates set forth in
section 34 of this Act.
(6) In the business of conducting research and development, and
having the status of a nonprofit corporation or nonprofit
association, the amount of education tax with respect to such
activities shall be equal to the gross income derived from such
activities multiplied by 1.00 times the applicable rates set
forth in section 34 of this Act.
(7) In the business of slaughtering, breaking or processing
perishable meat products or selling perishable meat products at
wholesale, the education tax imposed on such persons shall be
equal to the gross proceeds derived from such sales multiplied by
1.00 times the applicable rates set forth in section 34 of this
Act.
(8) In the business of acting as a travel agent, the education
tax on such activities shall be equal to the gross income derived
from such activities multiplied by 1.00 times the applicable
rates set forth in section 34 of this Act.
(9) In business as an international steamship agent,
international customs house broker, international freight
forwarder, vessel or cargo charter broker in foreign commerce or
international air cargo agent, the amount of the education tax
with respect only to international activities shall be equal to
the gross income derived from such activities multiplied by 1.00
times the applicable rates set forth in section 34 of this Act.
(10) In the business of stevedoring and associated activities
pertinent to the movement of goods and commodities in waterborne
interstate or foreign commerce, the amount of education tax with
respect to such business shall be equal to the gross proceeds
derived from such activities multiplied by 1.00 times the
applicable rates set forth in section 34 of this Act. As used in
this subsection, 'stevedoring' and 'associated activities
pertinent to the conduct of goods and commodities in waterborne
interstate or foreign commerce' means all activities of a labor,
service or transportation nature where cargo may be loaded or
unloaded to or from vessels or barges, passing over, onto or
under a wharf, pier or similar structure. This includes but is
not limited to:
(a) Moving cargo to a warehouse or similar holding or storage
yard or area to await further movement in import or export.
(b) Moving cargo to a consolidation freight station to be
stuffed, unstuffed, containerized, separated or otherwise
segregated or aggregated for delivery or loaded on any mode of
transportation for delivery to its consignee.
(c) Wharfage, handling, loading, unloading and moving of cargo
to a convenient place of delivery to the consignee or a
convenient place for further movement to export mode.
(d) Documentation services in connection with the receipt,
delivery, checking, care, custody and control of cargo required
in the transfer of cargo.
(e) Imported automobile handling prior to delivery to
consignee.
(f) Terminal stevedoring and incidental vessel services,
including but not limited to plugging and unplugging refrigerator
service to containers, trailers and other refrigerated cargo
receptacles, and securing ship hatch covers.
(11) As an insurance agent, insurance broker or insurance
solicitor licensed under ORS chapter 746, the amount of the
education tax with respect to such licensed activities shall be
equal to the gross income of such business multiplied by 1.00
times the applicable rates set forth in section 34 of this
Act. + }
SECTION 40. { + Wholesalers, distributors. (1) For every
person except persons taxable under section 39 (1) or (7) of this
Act, engaging within this state in the business of making sales
at wholesale, the amount of education tax shall be equal to the
gross proceeds of sales of such business multiplied by 1.00 times
the applicable rates set forth in section 34 of this Act.
(2) The tax imposed by this section is levied and shall be
collected from every person engaged in the business of
distributing in this state articles of tangible personal
property, owned by them, from their own warehouse or other
central location in this state to two or more of their own retail
stores or outlets.
(3) Where no change of title or ownership occurs, the education
tax imposed is equal to the tax upon wholesalers for persons
performing functions essentially comparable to those of a
wholesaler but not actually making sales. In addition:
(a) The tax imposed by subsection (1) of this section may not
be assessed twice to the same person for the same article. The
amount of the tax as to such persons shall be computed by
multiplying 1.00 times the applicable rates set forth in section
34 of this Act by the value of the article so distributed as of
the time of such distribution.
(b) The persons engaged in the activities described in this
subsection shall not be liable for the tax imposed if by proper
invoice it can be shown that the purchase of such property was
made from a wholesaler who has paid the education tax to the
state upon the same articles. Subsection (1) of this section
shall not apply to purchases from manufacturers as defined in
section 19 of this Act.
(4) The Department of Revenue shall prescribe uniform and
equitable rules for the purpose of ascertaining such value, which
value shall correspond as nearly as possible to the gross
proceeds from sales at wholesale in this state of similar
articles of like quality and character and in similar quantities
by other taxpayers.
(5) Delivery trucks or vans shall not, under this section, be
considered to be retail stores or outlets. + }
SECTION 41. { + Printers, publishers, highway contractors,
extracting or processing for hire, cold storage warehouse or
storage warehouse operation, insurance general agents, radio and
television broadcasting --Cold storage warehouse defined--Storage
warehouse defined. (1) For every person engaging within this
state in any of the following businesses, the amount of education
tax on such business shall be equal to the gross income of the
business multiplied by 1.00 times the applicable rates set forth
in section 34 of this Act:
(a) Printing, and publishing newspapers, periodicals or
magazines.
(b) Building, repairing or improving any street, place, road,
highway, easement, right of way, mass public transportation
terminal or parking facility, bridge, tunnel or trestle which is
owned by this state, a municipal corporation or political
subdivision of the state or by the United States and which is
used, or to be used, primarily for foot or vehicular traffic
including mass transportation vehicles of any kind and including
any readjustment, reconstruction or relocation of the facilities
of any public, private or cooperatively owned utility or railroad
in the course of such building, repairing or improving, the cost
of which readjustment, reconstruction or relocation is the
responsibility of the public authority whose street, place, road,
highway, easement, right of way, mass public transportation
terminal or parking facility, bridge, tunnel or trestle is being
built, repaired or improved.
(c) Constructing, repairing, decorating or improving new or
existing buildings or other structures under, upon or above real
property of or for the United States, its instrumentality, this
state or a unit of local government, or the installing or
attaching of any article of tangible personal property therein or
thereto, whether or not such personal property becomes a part of
the realty by virtue of installation, including the clearing of
land and the moving of earth of or for the United States, its
instrumentality, this state or a unit of local government.
(d) Extracting for hire or processing for hire.
(e) Operating a cold storage warehouse or storage warehouse,
not including the rental of cold storage lockers.
(f) Representing and performing services for fire or casualty
insurance companies as an independent resident managing general
agent licensed under ORS chapter 744.
(g) Radio and television broadcasting, excluding network,
national and regional advertising computed as a standard
deduction based on the national average thereof as annually
reported by the Federal Communications Commission, or in lieu
thereof by itemization by the individual broadcasting station,
and excluding that portion of revenue represented by the
out-of-state audience computed as a ratio to the station's total
audience as measured by the 100 microvolt signal strength and
delivery by wire.
(h) Engaging in activities which bring a person within the
definition of consumer contained in section 9 of this Act, as now
or hereafter amended.
(2) As used in this section, 'cold storage warehouse' means a
storage warehouse used to store fresh or frozen perishable fruits
or vegetables, meat, seafood, dairy products or fowl, or any
combination, at a desired temperature to maintain the quality of
the product for orderly marketing.
(3) As used in this section, 'storage warehouse' means a
building or structure, or any part thereof, in which goods, wares
or merchandise are received for storage for compensation.
(4) As used in this section, 'storage warehouse' does not mean
field warehouses, fruit warehouses, fruit packing plants,
warehouses, public garages storing automobiles, railroad freight
sheds, docks and wharves, and 'self-storage' or 'mini-storage '
facilities whereby customers have direct access to individual
storage areas by separate entrance. + }
SECTION 42. { + Business or service activities. (1) Every
person engaging within this state in any business activity other
than, or in addition to, those enumerated in sections 35 to 41 of
this Act is included in the scope of the education tax. The
amount of tax on account of the business activity shall be equal
to the gross income of the business multiplied by 1.00 times the
applicable rates set forth in section 34 of this Act.
(2) This section includes but is not limited to:
(a) Any activity whether or not title to materials used in the
performance of the business passes to another by accession,
confusion or other than by outright sale.
(b) Persons engaged in the business of rendering any type of
service which does not constitute a sale at retail or a sale at
wholesale.
(3) The value of advertising, demonstrative and promotional
supplies and materials furnished to an agent by a principal or
supplier to be used for informational, educational and
promotional purposes shall not be considered a part of the
remuneration or commission of the agent and shall not be subject
to taxation under sections 1 to 131 of this Act. + } �
{ +
EXEMPTIONS AND DEDUCTIONS + }
SECTION 43. { + Exemptions--Public utilities. Sections 1 to
131 of this Act shall not apply to any governmental unit, or to
any public or private corporation, company, individual,
association of individuals, or its lessees, trustees or receivers
engaged in the ownership, operation, management or control of all
or part of any plant or equipment in this state for the
production, transmission, delivery or furnishing of heat, light,
water, sewer or power directly or indirectly to or for the
public. + }
SECTION 44. { + Exemptions--Transportation and public service
companies. The tax imposed by sections 1 to 131 of this Act shall
not apply to the following:
(1) Express carrier businesses.
(2) Motor transportation businesses.
(3) Public service businesses.
(4) Railroad businesses.
(5) Railroad car businesses.
(6) Telegraph businesses.
(7) Tugboat businesses.
(8) Urban transportation businesses.
(9) Vessels under 65 feet in length. + }
SECTION 45. { + Definitions. As used in section 44 of this
Act:
(1) 'Express carrier business' means the business of carrying
property for public hire on the line of any common carrier
operated in this state, when such common carrier is not owned or
leased by the person engaging in such business.
(2) 'Motor transportation business' means the business, except
urban transportation business, of operating any motor propelled
vehicle by which persons or property of others are conveyed for
hire. In addition:
(a) 'Motor transportation business' includes but is not limited
to:
(A) The operation of any motor propelled vehicle as an auto
transportation company, except urban transportation business; and
(B) A common carrier or contract carrier.
(b) 'Motor transportation business' shall not mean or include
the transportation of logs or other forest products exclusively
upon private roads or private highways.
(3) 'Public service business' means any business subject to
control by the state, or having the powers of eminent domain and
the duties incident thereto, or any business hereafter declared
by the Legislative Assembly to be of a public service nature,
except telephone business as defined in section 8 of this Act. It
includes but is not limited to airplane transportation, boom,
dock, ferry, log patrol, pipeline, toll bridge, toll logging
road, utilities, water transportation and wharf businesses.
(4) 'Railroad business' means the business of operating any
railroad, by whatever power operated, for public use in the
conveyance of persons or property for hire. It shall not,
however, include any business herein defined as an urban
transportation business.
(5) 'Railroad car business' means the business of renting,
leasing or operating stock cars, furniture cars, refrigerator
cars, fruit cars, poultry cars, tank cars, sleeping cars, parlor
cars, buffet cars, tourist cars or any other kinds of cars used
for transportation of property or persons upon the line of any
railroad operated in this state when such railroad is not owned
or leased by the person engaging in such business.
(6) 'Telegraph business' means the business of affording
telegraphic communication for hire.
(7) 'Tugboat business' means the business of operating
tugboats, towboats, wharf boats or similar vessels in the towing
or pushing of vessels, barges or rafts for hire.
(8)(a) 'Urban transportation business' means the business of
operating any vehicle for public use in the conveyance of persons
or property for hire, insofar as:
(A) Operating entirely within the corporate limits of any city
or town, or within five miles of the corporate limits thereof; or
(B) Operating entirely within and between cities and towns
whose corporate limits are not more than five miles apart or
within five miles of the corporate limits of either.
(b) 'Urban transportation business' includes but is not limited
to the business of operating passenger vehicles of every type and
also the business of operating cartage, pickup or delivery
services, including in such services the collection and
distribution of property arriving from or destined to a point
within or without the state, whether or not such collection or
distribution is made by the person performing a local or
interstate line-haul of the property. + }
SECTION 46. { + Exemptions--International banking facilities.
(1) Sections 1 to 131 of this Act shall not apply to the gross
receipts of an international banking facility.
(2) As used in this section, an 'international banking
facility' means a facility represented by a set of asset and
liability accounts segregated on the books and records of a
commercial bank, the principal office of which is located in this
state, and which is incorporated and doing business under the
laws of the United States or of this state, a United States
branch or agency of a foreign bank, an Edge corporation organized
under Section 25(a) of the Federal Reserve Act, 12 U.S.C. ��611
to 631, or a corporation having an agreement or undertaking with
the Board of Governors of the Federal Reserve System under
Section 25 of the Federal Reserve Act, 12 U.S.C. ��601 to 604(a),
that includes only international banking facility time deposits
as defined in subsection (a)(2) of Section 204.8 of Regulation D
(12 CFR Part 204, as promulgated by the Board of Governors of the
Federal Reserve System), and international banking facility
extensions of credit as defined in subsection (a)(3) of Section
204.8 of Regulation D. + }
SECTION 47. { + Exemptions--Insurance business. (1) Sections 1
to 131 of this Act shall not apply to any person with respect to
insurance business upon which a tax based on gross premiums is
paid to the state pursuant to ORS chapter 731.
(2) The provisions of this section shall not exempt any person
engaging in the business of representing any insurance company,
whether as general or local agent or acting as broker for such
companies.
(3) The provisions of this section shall not exempt any bonding
company from tax with respect to gross income derived from the
completion of any contract as to which it is a surety or as to
any liability as successor to the liability of the defaulting
contractor. + }
SECTION 48. { + Exemptions--Alcohol manufactured for
gasohol--Gasohol for motor vehicle fuel. (1) The tax imposed by
section 40 (1) of this Act does not apply to any person who
manufactures alcohol with respect to sales of alcohol to be used
in the production of gasohol for use as motor vehicle fuel nor
with respect to sales of gasohol for use as motor vehicle fuel.
(2) As used in this section, 'motor vehicle fuel' has the
meaning given in ORS 319.010 (12).
(3) As used in this section, 'gasohol' means motor vehicle fuel
which contains at least 10 percent ethanol. + }
SECTION 49. { + Exemptions--Adult family homes. Sections 1 to
131 of this Act do not apply to adult foster homes which are
licensed under ORS chapter 443, or which are specifically exempt
from licensing under rules of the Department of Human
Resources. + }
SECTION 50. { + Exemptions--Agriculture. (1) Sections 1 to 131
of this Act shall not apply to any person with respect to the
business of growing or producing for sale upon land owned by the
person or upon land in which the person has a present right of
possession, any agricultural or horticultural produce or crop, or
of raising upon land owned by the person or upon land in which
the person has a present right of possession, any cultured
Christmas tree or any animal, bird, fish or insect, or the milk,
eggs, wool, fur, meat, honey or other substance obtained
therefrom, or in respect to the sale of such products at
wholesale by such grower, producer or raiser thereof.
(2) The exemption granted by this section shall not apply to:
(a) Any person selling such products at retail or using such
products as ingredients in a manufacturing process.
(b) The sale of any animal or substance obtained therefrom by a
person in connection with the operating by the person of a
stockyard or a slaughterhouse or packinghouse.
(c) Any person with respect to the business of taking,
cultivating or raising timber.
(d) Any association of persons, whether mutual, cooperative or
otherwise, engaging in any business activity with respect to
which tax liability is imposed under the provisions of sections 1
to 129 of this Act.
(3) As used in this section, 'fish' means fish which are
cultivated or raised entirely within confined rearing areas on
land owned by the person or on land in which the person has a
present right of possession.
(4) The education tax does not apply to any persons who
participate in the Federal Conservation Reserve Program or its
successor administered by the United States Department of
Agriculture with respect to land enrolled in that program. + }
SECTION 51. { + Exemptions--Agricultural fairs. (1) Sections 1
to 131 of this Act shall not apply to any business of any bona
fide agricultural fair, if no part of the net earnings therefrom
inures to the benefit of any stockholder or member of the
association conducting the same.
(2) Any amount paid for admission to any exhibit, grandstand,
entertainment or other feature conducted within the fairgrounds
by others shall be taxable under the provisions of this Act,
except as otherwise provided by law. + }
SECTION 52. { + Exemptions--Amounts received by hop growers or
dealers for processed hops shipped outside the state. (1)
Sections 1 to 131 of this Act shall not apply to amounts received
by hop growers or dealers for hops which are shipped outside the
State of Oregon for first use, if the hops have been processed
into extract, pellets or powder in this state.
(2) This section does not exempt a processor or warehouser from
taxation under this Act on amounts charged for processing or
warehousing. + }
SECTION 53. { + Exemptions--Athletic exhibitions. Sections 1
to 131 of this Act shall not apply to any person with respect to
the business of conducting boxing contests and sparring or
wrestling matches and exhibitions for the conduct of which a
license must be secured from the Oregon State Boxing and
Wrestling Commission. + }
SECTION 54. { + Exemptions--Racing. Sections 1 to 131 of this
Act shall not apply to any person with respect to the business of
conducting race meets for the conduct of which a license must be
secured from the Oregon Racing Commission. + }
SECTION 55. { + Exemptions--Ride sharing. Sections 1 to 131 of
this Act do not apply to any funds received in the course of
commuter ride sharing or ride sharing for the elderly or the
handicapped. + }
SECTION 56. { + Exemptions--Employees. Sections 1 to 131 of
this Act shall not apply to any person with respect to employment
in the capacity of an employee or servant as distinguished from
that of an independent contractor. + }
SECTION 57. { + Exemptions--Nonprofit organizations that issue
debt for student loans or that are guarantee agencies. Sections 1
to 131 of this Act do not apply to gross income received by
nonprofit organizations exempt from federal income tax under
section 501(c)(3) of the Internal Revenue Code of 1954, as
amended, that are guarantee agencies under the Federal Guaranteed
Student Loan program or that issue debt to provide or acquire
student loans. + }
SECTION 58. { + Exemptions--Certain fraternal and beneficiary
organizations. (1) Sections 1 to 131 of this Act shall not apply
to fraternal benefit societies or fraternal fire insurance
associations nor to beneficiary corporations or societies, if
such beneficiary corporations or societies provide in their
bylaws for the payment of death benefits.
(2) The exemption granted by this section is limited to gross
income from premiums, fees, assessments, dues or other charges
directly attributable to the insurance or death benefits provided
by such societies, associations or corporations. + }
SECTION 59. { + Exemptions--Certain corporations furnishing
aid and relief. Sections 1 to 131 of this Act shall not apply to
the gross sales or the gross income received by corporations
which have been incorporated under any act of the Congress of the
United States of America for the principal purposes of:
(1) Furnishing volunteer aid to members of the Armed Forces of
the United States.
(2) Carrying on a system of national and international relief.
(3) Providing relief in mitigating the sufferings caused by
pestilence, famine, fire, floods and other national calamities.
(4) Devising and carrying out measures for preventing
sufferings caused by pestilence, famine, fire, floods and other
national calamities. + }
SECTION 60. { + Exemptions--Operation of sheltered workshops.
(1) Sections 1 to 131 of this Act shall not apply to income
received from the Department of Human Resources for the cost of
care, maintenance, support and training of persons with
developmental disabilities at nonprofit group training homes or
to the business activities of nonprofit organizations from the
operation of sheltered workshops.
(2) As used in this section, 'operation of sheltered workshops'
means performance of business activities of any kind on or off
the premises of such nonprofit organizations which are performed
for the primary purpose of:
(a) Providing gainful employment or rehabilitation services to
individuals with disabilities as an interim step in the
rehabilitation process for those who cannot be readily absorbed
in the competitive labor market or during such time as employment
opportunities for them in the competitive labor market do not
exist; or
(b) Providing evaluation and work adjustment services for
individuals with disabilities. + }
SECTION 61. { + Exemptions--Amounts derived from sale of real
estate. (1) Sections 1 to 131 of this Act shall not apply to
gross proceeds derived from the sale of real estate.
(2) This section shall not be construed to allow a deduction of
amounts received as commissions from the sale of real estate, nor
as fees, handling charges, discounts, interest or similar
financial charges resulting from, or relating to, real estate
transactions. + }
SECTION 62. { + Exemptions--Certain materials printed in
school district, educational service district, library and
library district printing facilities. Sections 1 to 131 of this
Act shall not apply to school districts, educational service
districts, any library or library district with respect to
materials printed in the printing facilities of the school
district, educational service district, library or library
district, and used solely for school district, educational
service district, library or library district purposes. + }
SECTION 63. { + Exemptions--Certain materials printed in
county, city or town printing facilities. Sections 1 to 131 of
this Act do not apply to any county, city, town or municipal
corporation with respect to materials printed in the printing
facilities of the county, city, town or municipal corporation and
used solely for county, city, town or municipal corporation
purposes. + }
SECTION 64. { + Exemptions--Credit unions. Sections 1 to 131
of this Act shall not apply to the gross income of credit unions
organized under the laws of this state or the United States. + }
SECTION 65. { + Exemptions--Hatching eggs and poultry.
Sections 1 to 131 of this Act shall not apply to amounts derived
by persons engaged in the production and sale of hatching eggs or
poultry for use in the production for sale of poultry or poultry
products. + }
SECTION 66. { + Exemptions--Sand, gravel and rock taken from
county or city pits or quarries, processing and handling costs.
(1) Sections 1 to 131 of this Act shall not apply to:
(a) The cost of, or charges for, labor and services performed
in respect to the mining, sorting, crushing, screening, washing,
hauling or stockpiling of sand, gravel or rock, when such sand,
gravel or rock is taken from a pit or quarry which is owned by or
leased to a county or city and such sand, gravel or rock is
either stockpiled in a pit or quarry for placement, or is placed
on the street, road, place or highway of the county or city by
the county or city; or
(b) The cost of, or charges for, such labor and services if any
such sand, gravel or rock is sold by the county or city to a
county or to a city at actual cost for placement on a publicly
owned street, road, place or highway.
(2) The exemption granted in this section shall not apply to
the cost of, or charges for, such labor and services if the sand,
gravel or rock is used for other than public road purposes or is
sold otherwise than as stated in this section. + }
SECTION 67. { + Exemption of amounts or value paid or
contributed to any county, city, town, political subdivision or
municipal corporation for capital facilities. (1) Sections 1 to
131 of this Act shall not apply to amounts or value paid or
contributed to any county, city, town, political subdivision or
municipal or quasi-municipal corporation of the State of Oregon
representing payments of special assessments or installments
thereof and interests and penalties thereon, charges in lieu of
assessments, or any other charges, payments or contributions
representing a share of the cost of capital facilities
constructed or to be constructed or for the retirement of
obligations and payment of interest thereon issued for capital
purposes.
(2) Service charges shall not be included in this exemption
even though used wholly or in part for capital purposes. + }
SECTION 68. { + Exemptions--Grants by United States Government
to municipal corporations or political subdivisions. Sections 1
to 131 of this Act shall not apply to grants received from the
state or the United States Government by municipal corporations
or political subdivisions of the State of Oregon. + }
SECTION 69. { + Exemptions--County, city, town, school
district or fire district activity. (1) Sections 1 to 131 of this
Act shall not apply to any county, city, town, school district or
fire district activity, regardless of how financed.
(2) Nothing contained in this section shall limit the authority
of the Legislative Assembly to authorize the imposition of such
tax prospectively upon such activities as the Legislative
Assembly shall specifically designate. + }
SECTION 70. { + Exemptions--Sales by certain out-of-state
persons to or through direct seller's representatives. (1)
Sections 1 to 131 of this Act shall not apply to any person with
respect to gross income derived from the business of making sales
at wholesale or retail if such person:
(a) Does not own or lease real property within this state;
(b) Does not regularly maintain a stock of tangible personal
property in this state for sale in the ordinary course of
business;
(c) Is not a corporation incorporated under the laws of this
state; and
(d) Makes sales in this state exclusively to or through a
direct sales representative.
(2) As used in this section, 'direct sales representative '
means a person who buys consumer products on a buy-sell basis or
a deposit-commission basis for resale by the buyer or any other
person in the home or otherwise than in a permanent retail
establishment, or who sells, or solicits the sale of, consumer
products in the home or otherwise than in a permanent retail
establishment. In addition, for a person to qualify as a 'direct
sales representative':
(a) Substantially all of the remuneration paid to the person,
whether or not paid in cash, for the performance of services
described in this subsection must be directly related to sales or
other output, including the performance of services, rather than
the number of hours worked; and
(b) The services performed by the person must be performed
pursuant to a written contract between the person and the party
for whom the services are performed and the contract must provide
that the person will not be treated as an employee with respect
to the services for federal tax purposes.
+ } { + SECTION 71. + } { + Exemptions--Accommodation
sales. (1) Sections 1 to 131 of this Act shall not apply to sales
for resale by persons regularly engaged in the business of
selling the type of property sold to other persons similarly
engaged in the business of selling the type of property sold
where:
(a) The amount paid by the buyer does not exceed the amount
paid by the seller in the acquisition of the article; and
(b) The sale is made as an accommodation to the buyer to enable
the buyer to fill a bona fide existing order of a customer or is
made within 14 days to reimburse in kind a previous accommodation
sale by the buyer to the seller.
(2) The exemption granted by this section applies to sales by a
wholly owned subsidiary of a person making sales at retail when
the parent corporation shall have paid the tax imposed under
sections 1 to 131 of this Act. + }
SECTION 72. { + Deductions--Membership fees and certain
service fees by nonprofit youth organization. (1) In computing
gross receipts under sections 1 to 131 of this Act, there may be
deducted all amounts received by a nonprofit youth organization.
This includes but is not limited to:
(a) Membership fees or dues, irrespective of the fact that the
payment of the membership fees or dues to the organization may
entitle its members, in addition to other rights or privileges,
to receive services from the organization or to use the
organization's facilities.
(b) Fees or dues from members of the organization for camping
and recreational services provided by the organization or for the
use of the organization's camping and recreational facilities.
(2) As used in this section, 'nonprofit youth organization'
means a nonprofit organization engaged in character building of
youth. + }
SECTION 73. { + Deductions--Investments--Dividends from
subsidiary corporations. (1) In computing gross receipts under
sections 1 to 131 of this Act, there may be deducted the amounts
derived from investments or the use of money as such. The
deduction allowed by this section does not apply to persons
engaging in banking, loan, security or other financial
businesses.
(2) In the computation of gross receipts under sections 1 to
131 of this Act, there may be deducted the amounts derived as
dividends by a parent from its subsidiary corporations. + }
SECTION 74. { + Deductions--Fees, dues, charges. (1) In
computing gross receipts under sections 1 to 131 of this Act, the
following may be deducted:
(a) Amounts derived from bona fide initiation fees, dues,
contributions, donations and tuition fees.
(b) Charges made by a nonprofit trade or professional
organization for attending or occupying space at a trade show,
convention or educational seminar sponsored by the nonprofit
trade or professional organization, when the trade show,
convention or educational seminar is not open to the general
public.
(c) Charges made for operation of privately operated
kindergartens and endowment funds.
(2) This section shall not be construed to exempt any person,
association or society from tax liability upon selling tangible
personal property or upon providing facilities or services for
which a special charge is made to members or others.
(3) If dues are in exchange for any significant amount of goods
or services rendered by the recipient thereof to members without
any additional charge to the member, or if the dues are graduated
upon the amount of goods or services rendered, the value of such
goods or services shall not be considered as a deduction. + }
SECTION 75. { + Deductions--Cash discount taken by purchaser.
(1) In computing gross receipts under sections 1 to 131 of this
Act, there may be deducted the amount of cash discount actually
taken by the purchaser.
(2) The deduction under this section is not allowed in arriving
at gross receipts under the extractive or manufacturing
classifications with respect to articles produced or
manufactured, the reported values of which, for the purposes of
this tax, have been computed according to section 103 of this
Act. + }
SECTION 76. { + Deductions--Credit losses of accrual basis
taxpayers. In computing gross receipts under sections 1 to 131 of
this Act, there may be deducted the amount of credit losses
actually sustained by taxpayers whose regular books of account
are kept upon an accrual basis. + }
SECTION 77. { + Deductions--Motor vehicle fuel taxes. In
computing gross receipts under sections 1 to 131 of this Act,
there may be deducted so much of the sale price of motor vehicle
fuel as constitutes the amount of tax imposed by the state or the
United States Government upon the sale thereof. + }
SECTION 78. { + Deductions--Nontaxable business. In computing
gross receipts under sections 1 to 131 of this Act, there may be
deducted amounts derived from business which the state is
prohibited from taxing under the Constitution of this state or
the Constitution or laws of the United States. + }
SECTION 79. { + Deductions--Compensation for receiving,
washing, sorting and packing of horticultural products for person
exempt under section 50 of this Act--Materials and supplies used.
In computing the tax due under sections 1 to 131 of this Act,
there may be deducted from the measure of tax amounts derived by
any person as compensation for the receiving, washing, sorting
and packing of fresh perishable horticultural products and the
material and supplies used therein when performed for the person
exempted in section 50 of this Act, either as agent or as
independent contractor. + }
SECTION 80. { + Deductions--Compensation for services to
patients and attendant sales of prescription drugs by publicly
operated hospitals. In computing gross receipts under sections 1
to 131 of this Act, there may be deducted amounts derived as
compensation for services rendered or to be rendered to patients
or from sales of prescription drugs furnished as an integral part
of services rendered to patients by a hospital devoted to the
care of human beings with respect to the prevention or treatment
of disease, sickness or suffering, when such hospital is operated
by the United States or any of its instrumentalities, or by this
state, or any of its political subdivisions. + }
SECTION 81. { + Deductions--Compensation for services to
patients and attendant sales of prescription drugs by nonprofit
hospitals, nonprofit kidney dialysis facilities, nursing homes
and homes for unwed mothers operated by religious or charitable
organizations. (1) In computing gross receipts under sections 1
to 131 of this Act, there may be deducted amounts derived as
compensation for services rendered to patients or from sales of
prescription drugs furnished as an integral part of services
rendered to patients by a hospital, which is operated as a
nonprofit corporation, a kidney dialysis facility operated as a
nonprofit corporation, whether or not operated in connection with
hospitals, nursing homes and homes for unwed mothers operated as
religious or charitable organizations.
(2) The deduction from gross receipts granted by this section
is allowed only if:
(a) No part of the net earnings received by such an institution
inures directly or indirectly to any person other than the
institution entitled to deduction; and
(b) The hospital building is entitled to exemption from
taxation under the property tax laws of this state. + }
SECTION 82. { + Deductions--Compensation received by a
political subdivision from another political subdivision for
services taxable under section 42 of this Act. In computing gross
receipts under sections 1 to 131 of this Act, there may be
deducted amounts derived by a political subdivision of the State
of Oregon from another political subdivision of the State of
Oregon as compensation for services which are within section 42
of this Act. + }
SECTION 83. { + Deductions--Interest on investments or loans
secured by mortgages or deeds of trust. In computing gross
receipts under sections 1 to 131 of this Act, there may be
deducted by those engaged in banking, loan, security or other
financial businesses, amounts derived from interest received on
investments or loans primarily secured by first mortgages or
trust deeds on nontransient residential properties.
SECTION 84. Deductions--Interest on obligations of the state,
its political subdivisions and municipal corporations. In
computing gross receipts under sections 1 to 131 of this Act,
there may be deducted by those engaged in banking, loan, security
or other financial businesses, amounts derived from interest paid
on all obligations of the State of Oregon, its political
subdivisions and municipal corporations organized pursuant to the
laws thereof. + }
SECTION 85. { + Deductions--Interest on loans to farmers and
ranchers, producers or harvesters of aquatic products or their
cooperatives. In computing gross receipts under sections 1 to 131
of this Act, there may be deducted amounts derived as interest on
loans to bona fide farmers and ranchers, producers or harvesters
of aquatic products, or their cooperatives by a lending
institution which is owned exclusively by its borrowers or
members and which is engaged solely in the business of making
loans and providing finance-related services to bona fide farmers
and ranchers, producers or harvesters of aquatic products, their
cooperatives, rural residents for housing or persons engaged in
furnishing farm-related or aquatic-related services to these
individuals or entities. + }
SECTION 86. { + Deductions--Manufacturing activities completed
outside the United States. In computing gross receipts under
sections 1 to 131 of this Act, there may be deducted by persons
subject to payment of the tax on manufacturers pursuant to
section 36 of this Act, the value of articles to the extent of
manufacturing activities completed outside the United States, if:
(1) Any additional processing of such articles in this state
consists of minor final assembly;
(2) In the case of domestic manufacture of such articles, the
manufacturing can be and normally is done at the place of initial
manufacture;
(3) The total cost of the minor final assembly does not exceed
two percent of the value of the articles; and
(4) The articles are sold and shipped outside the state. + }
SECTION 87. { + Deductions--Reimbursement for accommodation
expenditures by funeral homes. In computing gross receipts under
sections 1 to 131 of this Act, there may be deducted that portion
of amounts received by any funeral home licensed to do business
in this state which is received as reimbursements for
expenditures, for goods supplied or services rendered by a person
not employed by or affiliated or associated with the funeral
home, and advanced by such funeral home as an accommodation to
the persons paying for a funeral, so long as such expenditures
and advances are billed to the persons paying for the funeral at
only the exact cost and are separately itemized in the billing
statement delivered to such persons. + }
SECTION 88. { + Deductions--Compensation from public entities
for health or social welfare services--Exception. (1) In
computing gross receipts under sections 1 to 131 of this Act,
there may be deducted amounts received from the United States or
any instrumentality or from the State of Oregon or any municipal
corporation or political subdivision as compensation for, or to
support, health or social welfare services rendered by a health
or social welfare organization or by a municipal corporation or
political subdivision.
(2) The deductions granted under this section are not allowed
for amounts that are received under an employee benefit plan. + }
SECTION 89. { + ' Health or social welfare organization '
defined for section 88 of this Act. Conditions for
exemption--'Health or social welfare services' defined. (1) As
used in this section and section 88 of this Act, the term '
health or social welfare organization' means an organization,
including any community action council:
(a) Which renders health or social welfare services;
(b) Which is a not-for-profit corporation, and is managed by a
governing board of not less than eight individuals, none of whom
is a paid employee of the organization; or
(c) Which is a sole corporation.
(2) 'Health or social welfare organization' does not include a
corporation providing professional services.
(3) In addition, a corporation in order to be exempt under
section 88 of this Act shall satisfy the following conditions:
(a) No part of its income may be paid directly or indirectly to
its members, stockholders, officers, directors or trustees except
in the form of services rendered by the corporation in accordance
with its purposes and bylaws.
(b) Salary or compensation paid to its officers and executives
must be only for actual services rendered, and at levels
comparable to the salary or compensation of like positions within
the public service of the state.
(c) Assets of the corporation must be irrevocably dedicated to
the activities for which the exemption is granted and, on the
liquidation, dissolution or abandonment by the corporation, may
not inure directly or indirectly to the benefit of any member or
individual except a nonprofit organization, association or
corporation which also would be entitled to the exemption.
(d) The corporation must be duly licensed or certified where
licensing or certification is required by law or regulation.
(e) The amounts received qualifying for exemption must be used
for the activities for which the exemption is granted.
(f) Services must be available regardless of race, color,
national origin or ancestry.
(g) The Director of the Department of Revenue shall have access
to the books of the corporation in order to determine whether the
corporation is exempt from taxes within the intent of section 88
of this Act and this section.
(4) The term 'health or social welfare services' includes and
is limited to the following:
(a) Mental health, drug or alcoholism counseling or treatment.
(b) Family counseling.
(c) Health care services.
(d) Therapeutic, diagnostic, rehabilitative or restorative
services for the care of the sick, aged or physically,
developmentally or emotionally disabled individuals.
(e) Activities which are for the purpose of preventing or
ameliorating juvenile delinquency or child abuse, including
recreational activities for those purposes.
(f) Care of orphans or foster children.
(g) Day care of children.
(h) Employment development, training and placement.
(i) Legal services to the indigent.
(j) Weatherization assistance or minor home repair for
low-income homeowners or renters.
(k) Assistance to low-income homeowners and renters to offset
the cost of home heating energy through direct benefits to
eligible households or to fuel vendors on behalf of eligible
households.
(L) Community services to low-income individuals, families and
groups which are designed to have a measurable and potentially
major impact on causes of poverty in communities of the
state. + }
SECTION 90. { + Deductions--Repair, maintenance and
replacement of residential structures and commonly held
property--Eligible organizations. (1) In computing gross receipts
under sections 1 to 131 of this Act, there may be deducted
amounts used solely for repair, maintenance, replacement,
management or improvement of residential structures and commonly
held property, but excluding property where fees or charges are
made for use by the public who are not guests accompanied by a
member, which are derived by:
(a) A cooperative housing association, corporation or
partnership from a person who resides in a structure owned by the
cooperative housing association, corporation or partnership;
(b) An association of property owners from an owner of fee
simple property which shares with property held by other
association members either:
(A) Common structural components, including but not limited to
walls; or
(B) General common elements as described in ORS 100.005; or
(c) An association of owners of residential property from a
person who is a member of the association.
(2) As used in this section, 'association of owners of
residential property' means any organization of all the owners of
residential property in a defined area who all hold the same
property in common within the area.
(3) As used in this section, 'commonly held property':
(a) Includes but is not limited to areas required for common
access such as reception areas, halls, stairways, parking areas,
recreation rooms, swimming pools and small parks or recreation
areas.
(b) Is not intended to include more grounds than are normally
required for common access in a residential area, or to include
such extensive areas as are required for golf courses,
campgrounds, hiking and riding areas and boating areas.
(4) To qualify for the deductions under this section:
(a) The salary or compensation paid to officers, managers or
employees must be only for actual services rendered and at levels
comparable to the salary or compensation of like positions within
the county wherein the property is located;
(b) Dues, fees or assessments in excess of amounts needed for
the purposes for which the deduction is allowed must be rebated
to the members of the association; and
(c) Assets of the association or organization must be
distributable to all members and must not inure to the benefit of
any single member or group of members. + }
SECTION 91. { + Deductions--Artistic or cultural
organization--Compensation from United States, state, for
artistic or cultural exhibitions, performances or programs. In
computing gross receipts under sections 1 to 131 of this Act,
there may be deducted amounts received from the United States or
any instrumentality thereof or from the State of Oregon or any
municipal corporation or subdivision as compensation for, or to
support, artistic or cultural exhibitions, performances or
programs provided by an artistic or cultural organization for
attendance or viewing by the general public. + }
SECTION 92. { + Deductions--Artistic or cultural
organization--Deduction for tax under section 36 of this Act. (1)
In computing gross receipts under sections 1 to 131 of this Act,
there may be deducted amounts received for the value of articles
for use in displaying art objects or presenting artistic or
cultural exhibitions, performances or programs.
(2) In computing gross receipts under sections 1 to 131 of this
Act, there may be deducted by persons subject to payment of the
tax on manufacturing under section 36 of this Act, the value of
articles to the extent manufacturing activities are undertaken by
an artistic or cultural organization solely for the purpose of
manufacturing articles for use by the organization in displaying
art objects or presenting artistic or cultural exhibitions,
performances or programs for attendance or viewing by the general
public. + }
SECTION 93. { + Deductions--Artistic or cultural
organizations--Tuition charges for attending artistic or cultural
education programs. In computing gross receipts under sections 1
to 131 of this Act, there may be deducted amounts received by
artistic or cultural organizations as tuition charges for the
privilege of attending artistic or cultural education
programs. + }
SECTION 94. { + Deductions--Artistic and cultural
organizations--Income from business activities. In computing
gross receipts under sections 1 to 131 of this Act, there may be
deducted those amounts received by artistic or cultural
organizations which represent income derived from business
activities conducted by the organization. + }
SECTION 95. { + ' Artistic or cultural organization' defined.
(1) As used in sections 91 to 94 of this Act, the term 'artistic
or cultural organization' means an organization which is
organized and operated exclusively for the purpose of providing
artistic or cultural exhibitions, presentations or performances,
or cultural or art education programs for viewing or attendance
by the general public. To qualify, the organization must be:
(a) A not-for-profit corporation; and
(b) Managed by a governing board of not less than eight
individuals, none of whom is a paid employee of the organization
or by a sole corporation.
(2) In addition, to qualify for deduction or exemption from
taxation under sections 91 to 94 of this Act, the corporation
shall satisfy the following conditions:
(a) No part of its income may be paid directly or indirectly to
its members, stockholders, officers, directors or trustees except
in the form of services rendered by the corporation in accordance
with its purposes and bylaws.
(b) Salary or compensation paid to its officers and executives
must be only for actual services rendered, and at levels
comparable to the salary or compensation of like positions within
the state.
(c) Assets of the corporation must be irrevocably dedicated to
the activities for which the exemption is granted and, on their
liquidation, dissolution or abandonment by the corporation, may
not inure directly or indirectly to the benefit of any member or
individual except a nonprofit organization, association or
corporation which also would be entitled to the exemption.
(d) The corporation must be duly licensed or certified when
licensing or certification is required by law or regulation.
(e) The amounts received that qualify for exemption must be
used for the activities for which the exemption is granted.
(f) Services must be available regardless of race, color,
national origin or ancestry.
(g) The Director of the Department of Revenue shall have access
to the books of the corporation in order to determine whether the
corporation is exempt from taxes.
(3) As used in this section and sections 91 to 94 of this Act,
'artistic or cultural exhibitions, presentations or performances,
or cultural or art education programs' includes and is limited
to:
(a) Exhibitions or presentations of works of art or objects of
cultural or historical significance, such as those commonly
displayed in art or history museums;
(b) Musical or dramatic performances or series of performances;
or
(c) Educational seminars or programs, or series of such
programs, offered by the organization to the general public on an
artistic, cultural or historical subject. + }
SECTION 96. { + Deductions--Sales of fuel for consumption
outside United States waters by vessels in foreign
commerce--Construction. In computing gross receipts under
sections 1 to 131 of this Act, there may be deducted amounts
derived from sales of fuel for consumption outside the
territorial waters of the United States by vessels used primarily
in foreign commerce. + }
{ +
CREDITS + }
SECTION 97. { + Credits for certain manufacturers. (1) In
computing the amount of tax due under sections 1 to 131 of this
Act, there may be credited against the amount of the tax the
following items:
(a) For persons engaging in manufacturing activities defined in
section 29 of this Act, an amount not to exceed the tax actually
paid by the persons or lessors of the person or contract vendors
of the person, on materials, labor and services in the
construction of new buildings or the enlarging of existing
buildings directly used in such activities.
(b) Where a building is used partly for manufacturing and
partly for other purposes, the applicable tax credit to be
determined by apportionment of the costs of construction under
such rules as the Department of Revenue shall provide.
(2) As used in this section, 'buildings' means only those
structures used to house or shelter manufacturing activities,
including the usual lighting, heating, ventilating and sanitary
plumbing facilities. In addition 'buildings':
(a) Includes plant offices and warehouses or other storage
facilities for the storage of raw materials or finished goods
when such facilities are essential to, and an integral part of, a
factory, mill or manufacturing plant.
(b) Includes potlines and furnaces used directly in the
manufacturing of metals.
(c) Does not include manufacturing or industrial fixtures or
equipment such as tanks, conveyor systems, cranes, industrial
machinery and related facilities irrespective of whether such
fixtures or equipment are affixed to the realty.
(3) As used in this section, 'construction of buildings '
refers only to new or enlarged buildings and not to the repair or
renovation of existing buildings.
(4) This credit shall be allowable only against tax payable by
the manufacturer and measured by the value of products or gross
proceeds of sales of articles, substances or commodities
manufactured in this state, and shall be allowable only against
any tax payable which is attributable to manufacturing occurring
in the particular factory, mill or manufacturing plant in which
such buildings are located.
(5) No tax credit claimed shall be deducted on any return until
such claim has been approved by the department or until 90 days
after such claim has been submitted to the department for
approval. + }
SECTION 98. { + Persons taxable on multiple
activities--Credits. (1) Every person engaged in activities
which are within the purview of the provisions of two or more of
sections 35 to 42 of this Act shall be taxable under each
paragraph applicable to the activities engaged in.
(2) Persons taxable under section 37 or 40 of this Act shall be
allowed a credit against those taxes for any:
(a) Manufacturing taxes paid with respect to the manufacturing
of products sold in this state; and
(b) Extracting taxes paid with respect to the extracting of
products sold in this state or ingredients of products sold in
this state. Extracting taxes taken as credit under subsection (3)
of this section may also be taken under this subsection, if
otherwise allowable under this subsection. The amount of the
credit shall not exceed the tax liability arising under this
chapter with respect to the sale of those products.
(3) Persons taxable under section 37 or 39 (4) of this Act
shall be allowed a credit against those taxes for any extracting
taxes paid with respect to extracting the ingredients of the
products so manufactured in this state. The amount of the credit
shall not exceed the tax liability arising under section 37 or 39
(4) of this Act with respect to the manufacturing of those
products.
(4) Persons taxable under section 35, 36 or 39 (2), (3), (4),
(5) or (7) of this Act with respect to extracting or
manufacturing products in this state shall be allowed a credit
against those taxes for the following:
(a) Gross receipts taxes paid to another state with respect to
the sales of the products extracted or manufactured in this
state.
(b) Manufacturing taxes paid with respect to the manufacturing
of products using ingredients extracted in this state.
(c) Manufacturing taxes paid with respect to manufacturing
activities completed in another state for products manufactured
in this state. The amount of the credit shall not exceed the tax
liability arising under sections 35 and 36 of this Act with
respect to the extraction or manufacturing of those products.
(5) For the purpose of this section, 'gross receipts tax '
means a tax:
(a) Which is imposed on or measured by the gross volume of
business, in terms of gross receipts or in other terms, and in
the determination of which the deductions allowed would not
constitute an income tax or value added tax; and
(b) Which is also not, pursuant to law or custom, separately
stated from the sales price.
(6) As used in this section, 'state' means:
(a) The State of Oregon;
(b) A state of the United States other than Oregon, or any
political subdivision of such other state;
(c) The District of Columbia; and
(d) Any foreign country or political subdivision thereof.
(7) As used in this section, 'manufacturing tax' means a gross
receipts tax imposed on the act or privilege of engaging in
business as a manufacturer, and includes:
(a) The taxes imposed in sections 36 and 39 (2), (3), (4), (5)
and (7) of this Act; and
(b) Similar gross receipts taxes paid to other states.
(8) As used in this section, 'extracting tax' means a gross
receipts tax imposed on the act or privilege of engaging in
business as an extractor, and includes the tax imposed in section
35 of this Act and similar gross receipts taxes paid to other
states.
(9) As used in this section, 'business,' 'extractor' and '
manufacturer' have the meanings given in sections 3, 13 and 19 of
this Act, notwithstanding the use of those terms in the context
of describing taxes imposed by other states. + }
SECTION 99. { + Credit for property taxes paid on business
inventories--Verification of payment--Penalty. (1) Each taxpayer
requesting education tax credit shall verify, by completing and
signing a form prepared and made available by the Department of
Revenue, payment of business inventory taxes on which such credit
is based.
(2) Any person signing a false claim with the intent to defraud
or evade the payment of any tax due under this Act shall be
guilty of a misdemeanor and, upon conviction thereof, be fined
not more than $10,000, or imprisoned for not more than one year,
or both, together with costs of prosecution. + }
SECTION 100. { + Credit for property taxes paid on business
inventories--Falsification--Penalty and interest. If the
Department of Revenue finds that any taxpayer received any tax
credit based on false or fraudulent information supplied by the
taxpayer, the amount of taxes avoided thereby shall be collected
together with statutory interest thereon. In addition, a penalty
equal to 25 percent of the tax avoided shall be due thereon. + }
SECTION 100a. { + Section 101 of this Act is added to and made
a part of ORS chapter 315.
SECTION 101. Income tax, credit for or against. (1) No
deduction shall be taken for education taxes paid pursuant to
sections 1 to 131 of this 1995 Act in determining taxable income
under ORS chapter 316, 317 or 318. Tax assessed pursuant to
sections 1 to 131 of this 1995 Act shall be added to federal
taxable income to the extent subtracted in calculating federal
taxable income.
(2) No deduction shall be taken for taxes paid pursuant to ORS
chapter 316, 317 or 318 in determining education tax liability
pursuant to sections 1 to 131 of this 1995 Act.
(3) There shall be allowed as a credit against state income or
excise tax liability for income derived from business activity
within this state the amount of tax imposed pursuant to sections
1 to 131 of this 1995 Act on business activity within this state
not to exceed the amount of state income or excise tax liability.
(4) 'Income derived from business activity within this state'
means income generating activity for which a deduction of
expenses could be made under section 162 of the Internal Revenue
Code, to the extent attributable to this state under the
apportionment guidelines set forth in sections 14 and 104 of this
1995 Act.
(5) A credit granted pursuant to subsection (3) of this section
shall be used in the tax year earned and shall not be carried
forward or backward for use in any other tax year. + }
SECTION 102. { + Tax in addition to other taxes. (1) The
education tax is in addition to and not in lieu of any other
taxes, fees or other charges imposed by the state or any unit of
local government.
(2) Notwithstanding ORS 323.030, 323.640, 462.100, 471.725,
471.730, 471.745, 731.840, 748.414, 803.585 or other law, the
education tax shall apply to extracting, manufacturing,
wholesaling services, retailing services or related activities as
if those provisions did not exist. + }
SECTION 103. { + Value of products, how determined. (1) The
value of products, including by-products, extracted or
manufactured shall be determined by the gross proceeds derived
from the sale thereof whether such sale is at wholesale or at
retail, to which shall be added all subsidies and bonuses
received from the purchaser or from any other person with respect
to the extraction, manufacture or sale of such products or
by-products by the seller.
(2) The value of a product does not include products, including
by-products, extracted or manufactured for commercial or
industrial use, and shipped, transported or transferred out of
the state, or to another person, without prior sale, or that are
sold under circumstances such that the gross proceeds from the
sale are not indicative of the true value of the subject matter
of the sale.
(3) In subsections (1) and (2) of this section, the value shall
correspond as nearly as possible to the gross proceeds from sales
in this state of similar products of like quality and character,
and in similar quantities, by other taxpayers, plus the amount of
subsidies or bonuses ordinarily payable by the purchaser or by
any third person with respect to the extraction, manufacture or
sale of such products.
(4) The value of a product manufactured or produced as a
prototype for the development of a new or improved product shall
correspond:
(a) To the retail selling price of such new or improved product
when first offered for sale; or
(b) To the value of materials incorporated into the prototype
in cases in which the new or improved product is not offered for
sale. The Department of Revenue shall prescribe uniform and
equitable rules for the purpose of ascertaining such values. + }
SECTION 104. { + Business within and without state. (1) Any
person rendering services taxable under section 42 of this Act
and maintaining places of business both within and without this
state which contribute to the rendition of such services shall,
for the purpose of computing education tax liability under
section 42 of this Act, apportion to this state that portion of
gross income which is derived from services rendered within this
state. Where such apportionment cannot be accurately made by
separate accounting methods, the taxpayer shall apportion to this
state that proportion of total income that the cost of doing
business within the state bears to the total cost of doing
business both within and without the state.
(2) Notwithstanding the provisions of subsection (1) of this
section, persons doing business both within and without the state
who receive gross income from service charges, relating to
amounts charged for granting the right or privilege to make
deferred or installment payments, or who receive gross income
from engaging in business as financial institutions, relating to
city taxes on financial institutions, shall apportion or allocate
gross income taxable under section 42 of this Act to this state
pursuant to rules promulgated by the Department of Revenue
consistent with uniform rules for apportionment or allocation
developed by the states.
(3) The department shall by rule provide a method or methods of
apportioning or allocating gross income derived from sales of
telephone services taxed under sections 33 to 42 of this Act, if
the gross proceeds of sales subject to tax under sections 33 to
42 of this Act do not fairly represent the extent of the
taxpayer's income attributable to this state. The rules shall be,
so far as feasible, consistent with the methods of apportionment
contained in this section and shall require the consideration of
those facts, circumstances and apportionment factors as will
result in an equitable and constitutionally permissible division
of the services. + }
SECTION 105. { + Resale certificate--Burden of proof. Unless a
seller has taken from the purchaser a resale certificate signed
by and bearing the name, address and registration number of the
purchaser to the effect that the property or service was
purchased for resale, or unless the nature of the transaction is
clearly shown as a sale at wholesale by the books and records of
the taxpayer in such other manner as the Department of Revenue
shall by regulation provide, the burden of proving that a sale of
tangible personal property, or of telephone service as defined in
section 8 of this Act, was not a sale at retail shall be upon the
seller. + }
SECTION 106. { + Sales in own name--Sales as agent. (1) Every
consignee, bailee, factor or auctioneer having either actual or
constructive possession of tangible personal property, or having
possession of the documents of title thereto, with power to sell
such tangible personal property in the name of the consignee,
bailee, factor or auctioneer, and actually so selling, shall be
deemed the seller of such tangible personal property within the
meaning of sections 1 to 131 of this Act. Further, the consignor,
bailor, principal or owner shall be deemed a seller of such
property to the consignee, bailee, factor or auctioneer.
(2) The burden shall be upon the taxpayer in every case to
establish the fact that the taxpayer is not engaged in the
business of selling tangible personal property but is acting
merely as broker or agent in promoting sales for a principal.
(3) Such claim will be allowed only when the accounting records
of the taxpayer are kept in such manner as the Department of
Revenue shall adopt by rule. + }
SECTION 107. { + Tax part of operating overhead. It is not the
intention of the Oregon Education Tax Act that the taxes herein
levied upon persons engaging in business be construed as taxes
upon the purchasers or customers, but that such taxes shall be
levied upon, and collectible from, the person engaging in the
business activities herein designated in sections 33 to 42 of
this Act and that such taxes shall constitute a part of the
operating overhead of such persons. + }
{ +
PROCEDURE + }
SECTION 108. { + Registration. (1) Any person who engages in
business in this state or who is required to collect the
education tax shall register with the Department of Revenue as
provided and subject to sections 108 to 114 of this Act. Any
other person may register with the department to collect the tax
if the person furnishes adequate security to insure collection
and remission of the tax to the department.
(2) Each person described in subsection (1) of this section
shall apply for and obtain from the department a certificate of
registration for the principal or main place of business or
business location of the person and a separate certificate of
registration for any other business location of the person in
this state.
(3) The application shall contain the name or names of the
persons who have interests in the business, their addresses and
the address of the principal or main place of business or
business location, any other business location and other
information as reasonably required by the department.
(4) No fee need accompany the application. + }
SECTION 109. { + Certificate of registration. (1) The
Department of Revenue shall examine the application and, if the
information contained in the application is complete and
accurate, shall issue an original registration certificate for
the principal or main place of business and a branch registration
certificate for each additional business location.
(2)(a) Each registration certificate issued shall be numbered
and shall show the name, residence, place and character of
business of the person, the location for which issued and any
other information required by the department. The registration
certificate issued for a location shall be displayed at the
location in a conspicuous place.
(b) A registration certificate shall be personal and not
assignable or transferable.
(c) No fee shall be charged for issuance of a registration
certificate.
(3) If the principal or main place of business is outside this
state, the department shall issue the original registration
certificate for that location. The department shall issue a
branch registration certificate for each business location within
this state.
(4) The department may, but need not, consider as a separate
business location or place of business, any store, mercantile,
market, outlet, shop, emporium, mart, establishment, office,
studio, stand, booth, stall, site, vending machine or other
location. + }
SECTION 110. { + Duration, revocation. (1) A registration
shall be valid and in effect for the period during which the
person registered engages in business at the place indicated by
the registration certificate and pays the education tax or until
the registration is suspended, revoked or canceled.
(2)(a) Except in a case of loss, theft, destruction, damage or
as otherwise provided by rule, if the person registered or a
business location changes, the registration certificate must be
returned to the Department of Revenue and, if applicable, an
application made for a new or replacement certificate.
(b) Except as provided in paragraph (c) of this subsection, a
change in the person registered occurs if the business is sold,
transferred or dissolved, or if a change in ownership occurs, or
the department otherwise determines that the person registered
has changed.
(c) A change in the person registered does not occur:
(A) Upon transfer of assets to an assignee for the benefit of
creditors or upon the appointment of a receiver or trustee in
bankruptcy.
(B) Upon the death of a sole proprietor in those cases where
there is a continuous operation of the business by the personal
representative or trustee.
(C) Upon any other transfer described by rule adopted by the
department.
(3) The department may suspend or revoke the registration of
any person who fails to pay the education tax or who fails to
comply with any provision of sections 1 to 131 of this Act. The
department shall not issue a new registration certificate to the
person unless the department is satisfied that the person will
comply with sections 1 to 131 of this Act and any rules of the
department adopted thereunder. If the department suspends or
revokes the registration of a person, the person shall be
entitled to a hearing. The hearing shall be conducted as a
contested case hearing pursuant to the applicable provisions of
ORS 183.413 to 183.470. Judicial review of an order issued under
this subsection shall be as provided in ORS 183.480 to
183.497. + }
SECTION 111. { + Temporary certificate. A temporary
registration certificate may be issued to any person who engages
in business in this state under rules adopted by the Department
of Revenue. + }
SECTION 112. { + Inactive. The Department of Revenue may
cancel a registration if the person has not incurred any
liability or obligation under the education tax for a period of
at least two years or for other appropriate reason. The reasons
for cancellation and cancellation procedure shall be described in
rules adopted by the department and shall afford an opportunity
to the person to demonstrate that registration should continue or
resume. + }
SECTION 113. { + Resale certificates, validity. (1) On or
after the operative date of the Oregon Education Tax Act, a
person may engage in business in this state only if the person
and the location of the business are registered with the
Department of Revenue.
(2) For purposes of proper administration of the education tax
and to prevent evasion, it is presumed that the entire gross
proceeds of sales or sales price is the measure of the tax until
the contrary is established. The burden of proving that a sale is
not a sale at retail is upon the person who makes the sale unless
the person takes from the purchaser a resale certificate to the
effect that the property or service is purchased for resale.
(3) The resale certificate of a person who is engaged in the
business of selling tangible personal property or services at
retail in this state is valid only if the person is registered
with the department and the registration has not been suspended,
revoked or canceled.
(4) The department shall prescribe by rule the contents and
proper format for a resale or exemption certificate. + }
SECTION 114. { + Records. Every person engaging in business in
this state shall keep those records, receipts, invoices and other
pertinent papers in a form required by the Department of
Revenue. + }
{ +
RETURNS AND PAYMENTS + }
{ + SECTION 115. + } { + Returns, payment. (1) The education
tax is due and payable to the Department of Revenue as follows:
(a) If the tax may reasonably be expected to be $500 or less
for the entire calendar year, the tax is due and payable to the
department not later than the last day of the calendar month next
following the calendar year.
(b) If the tax may reasonably be expected to be more than $500,
but $5,000 or less for the entire calendar year, the tax is due
and payable to the department semiannually not later than the
last day of the calendar month next following June 30 and
December 31.
(c) If the tax may reasonably be expected to be more than
$5,000, but $12,500 or less for the entire calendar year, the tax
is due and payable to the department quarterly not later than the
last day of the calendar month next following the calendar
quarter.
(d) If the tax may reasonably be expected to be more than
$12,500 for the entire calendar year, the tax is due and payable
monthly to the department as set forth in section 116 of this
Act.
(2) The education tax is due and payable as provided in this
section without regard to any extension of time for filing a
return. + }
SECTION 116. { + Returns, filing. (1) Not later than the last
day of the calendar month next following the applicable tax
period described in section 115 of this Act, a return for the
preceding tax period shall be filed with the Department of
Revenue in a form prescribed by the department.
(2) For purposes of the education tax, a return shall be filed
by every person engaged in business.
(3) Returns must be signed by the person required to file the
return, or by a duly authorized agent, subject to penalties for
false swearing.
(4) The department for good cause may extend for not to exceed
one month the time for making any return. If the time for filing
a return is extended at the request of a taxpayer, interest on
any unpaid tax at the rate established under ORS 305.220, for
each month or fraction of a month from the time the return was
originally required to be filed to the time of payment, shall be
added and paid. + }
SECTION 117. { + Accounting, installment payment. (1) Subject
to rules adopted by the Department of Revenue, the education tax
becomes payable in accordance with the system of accounting
regularly employed by the retailer.
(2) In the case of a lease, contract, sale or arrangement
described in section 4216(c) of the Internal Revenue Code, rules
similar to the rules of section 4217(e)(2) of the Internal
Revenue Code shall apply for purposes of the education tax.
(3) A person is entitled to a credit or refund for tax
previously paid on debts that are deductible as worthless for
federal income tax purposes. + }
SECTION 118. { + Persons outside state. Any person engaged in
business within or outside this state may be required or
permitted to file a return and pay the education tax under rules
which shall be adopted by the Department of Revenue. The rules
shall be amended from time to time to reflect current
constitutional interpretations. + }
{ +
COLLECTION + }
SECTION 119. { + (1) The education tax is a revenue or tax law
of this state and shall be administered by the Department of
Revenue.
(2) Every person engaged in business in this state shall keep
the books and records that are required by the department.
(3) For purposes of determining if and to whom information
contained on a return of education tax may be given access, ORS
314.835 and 314.840 shall apply. + }
SECTION 120. { + (1) Except where the context requires
otherwise, the provisions of ORS chapters 305 and 314 as to the
audit and examination of returns, determination of deficiencies,
assessments, claims for refund, refunds, conferences, appeals to
the Director of the Department of Revenue and appeals to the
Oregon Tax Court, and the procedures relating thereto, shall
apply to the determination of education tax, penalties and
interest.
(2) The education tax, interest and penalties are a personal
debt due and owing from the taxpayer to the State of Oregon from
the time that liability for the tax is incurred. The lien and
collection provisions of ORS chapters 305 and 314, including but
not limited to the warrant authority under ORS 314.417 to
314.434, the jeopardy provisions of ORS 314.440 and the
collection agency provisions of ORS 305.850, apply to the
education tax. + }
SECTION 121. { + Rules, administration, manual. (1) The
Department of Revenue is authorized to and shall adopt rules
requiring uniformity in application, reporting, collection and
otherwise to carry out the purposes of sections 1 to 131 of this
Act.
(2) The department shall provide by rule for the effective
administration of the education tax. + }
SECTION 122. { + Quitting business, successor. (1) For
purposes of the education tax, 'successor' means any person to
whom another person quitting, selling out, exchanging or
disposing of a business sells or otherwise conveys, directly or
indirectly, in bulk and not in the ordinary course of business, a
major part of the materials, supplies, merchandise, inventory,
fixtures or equipment of the person. Any person obligated to
fulfill the terms of a contract shall be considered a successor
to any contractor defaulting in the performance of any contract
as to which the person is a surety or guarantor.
(2) If any person quits business or sells out, exchanges or
otherwise disposes of a business or stock of goods, any education
tax shall become immediately due and payable. The person shall,
within 10 days after the sale, exchange or disposition, make a
return and pay the tax due.
(3) The successor is liable for the full amount of the tax and
may withhold from the purchase price a sum sufficient to pay any
tax due until a receipt or evidence from the Department of
Revenue showing payment in full of any tax due is presented to
the successor. If a receipt or other evidence is not presented to
the successor within 10 days, the successor may pay the tax and
the amount paid shall, to the extent paid, be considered a
payment of the purchase price. If the tax paid by the successor
is greater than the purchase price, the amount of the difference
is a debt due to the successor from the seller or transferor.
(4) A successor shall not be liable for any tax due from the
person from whom the successor has acquired a business or stock
of goods if the successor gives written notice to the department
of the acquisition and the department does not assess a
deficiency against the seller or transferor within six months of
receipt of the notice and mail or deliver a copy to the
successor. + }
{ +
DISPOSITION OF PROCEEDS + }
SECTION 123. { + Payments to department. Except as otherwise
provided by law, all taxes, interest and penalties imposed and
all amounts of education tax collected or required to be paid to
the state shall be paid to the Department of Revenue and upon
receipt by the department shall be turned over to the State
Treasurer, to be disbursed as provided in section 124 of this
Act. + }
SECTION 124. { + Suspense account, other disposition. (1)
Except as otherwise provided by law, all moneys received by the
Department of Revenue under sections 1 to 131 of this Act shall
be deposited in the State Treasury and credited to a suspense
account established under ORS 293.445 separate and apart from the
General Fund. Refunds, including refunds of erroneous
overpayments or refunds of other moneys received in which the
department has no legal interest, shall be paid out of the
suspense account. After payment of refunds, the balance shall be
deposited in the Gross Receipts Tax Education Replacement Fund,
which is hereby created.
(2) There is appropriated continuously to the department, out
of the General Fund, amounts necessary to pay the administrative
expenses of the department in administering, collecting and
enforcing the education tax.
(3) Any amounts of education tax proceeds required to be used
as described under section 2 (1)(g), Article VIII, or section 3a,
Article IX of the Oregon Constitution shall be turned over
promptly to the State Treasurer and shall be disposed of as
provided in ORS 324.340 or 802.110, whichever is appropriate. + }
SECTION 124a. { + Gross Receipts Tax Education Replacement
Fund. (1) The Gross Receipts Tax Education Replacement Fund
shall consist of:
(a) All moneys and revenues derived from the gross receipts tax
transferred from the suspense accounts described in section 124
of this Act.
(b) All moneys or revenues received from all other sources
which by law are allocated, dedicated or appropriated to the
Gross Receipts Tax Education Replacement Fund.
(c) All interest earnings on any of the funds designated in
this subsection shall be placed to the credit of the Gross
Receipts Tax Education Replacement Fund.
(2) The Gross Receipts Tax Education Replacement Fund shall be
considered to be and held as a trust fund to be used for the
purposes of education and all moneys allocated or appropriated to
the fund are continuously appropriated for those purposes.
(3) The moneys in the Gross Receipts Tax Education Replacement
Fund, in amounts determined by the State Treasurer, shall be
invested as provided in ORS 293.701 to 293.776. + }
{ +
PENALTIES + }
SECTION 125. { + (1) Any person required to make, render,
furnish, sign or verify any education tax return who makes any
false or fraudulent, or supplementary return, with intent to
defeat or evade the determination of an amount of tax due, is
subject to the penalty and shall be punished as provided under
ORS 314.991 (1).
(2) Any person who fails or refuses to file an education tax
return, or supplementary return, or to furnish any information
required by the Department of Revenue, shall be punished, upon
conviction, as provided under ORS 305.990 (4).
(3) Violation of any provision contained in sections 1 to 131
of this Act, or any rule adopted thereunder, shall be punished,
upon conviction, as provided under ORS 305.990 (4). + }
SECTION 126. { + Unauthorized engaging in business. (1) Any
person who engages in business within this state without having
registered with the Department of Revenue is punishable, upon
conviction, as provided in ORS 305.990 (4).
(2) Any person who engages in business in this state after
having registered with the department and having had the
registration revoked is guilty of a Class C felony. + }
SECTION 127. { + Resale certificate, fraudulent. Any person
who willfully tenders a resale certificate that is false,
fraudulent or invalid to a seller or who, under false or
knowingly misleading circumstances, tenders a resale certificate
to a seller, is punishable, upon conviction, as provided under
ORS 305.990 (4). + }
SECTION 128. { + Corporations. For purposes of sections 125 to
131 of this Act, 'person' includes an officer or employee of a
corporation or a member or employee of a partnership. + }
SECTION 129. { + Penalties additional to all other penalties.
Any of the penalties provided in sections 125 to 127 of this Act
are in addition to all other penalties provided in sections 1 to
124 of this Act. + }
{ +
PROPERTY TAX REDUCTION + }
SECTION 130. { + (1) Not later than August 31 of each fiscal
year, the Department of Revenue shall certify to the county
assessor of each county in this state the amount of education tax
revenue allocated to the county as determined under section 131
of this Act. Each county assessor shall apply the amount so
certified to reduce the property tax levy of school district and
community college district taxing units within the county as
provided in subsections (2) to (4) of this section.
(2) The county assessor shall first allocate the revenue
allocated to the county to each school district or community
college district taxing unit in the same proportion that the
computed property tax from a particular school district or
community college district taxing unit bears to the total
property tax imposed by all school district or community college
district taxing units in the county. As used in this subsection,
' computed property tax' means the amount of property tax in
dollars that would have been imposed on the appraised value of
property in the taxing unit in the current fiscal year if the
reduction made under this section was not taken into account.
(3) The county assessor shall subtract from the levy submitted
by each school district and community college district taxing
unit the amount of education tax receipts allocated to the taxing
unit under subsection (2) of this section and shall extend on the
assessment and tax roll in each case no more than the remainder
as the taxing unit's levy for the current fiscal year.
(4) Immediately upon extension of the tax levy as provided in
ORS 311.105, the county assessor shall certify to the State
Treasurer the amounts that have been allocated to the various
school district or community college district taxing units within
the county. The State Treasurer shall thereafter, out of the
Gross Receipts Tax Education Replacement Fund, distribute the
amounts so certified to the appropriate taxing units. + }
SECTION 131. { + For purposes of making the allocation
described in section 130 (1) of this Act, the Department of
Revenue shall, on or before August 15 of each fiscal year,
estimate the amount of education tax revenue derived from each
county in this state for the fiscal year beginning on July 1. + }
{ +
OPERATIVE DATE + }
SECTION 132. { + Education tax, operative date. Sections 1 to
131 of this Act become operative July 1, 1996. + }
{ +
Captions + }
SECTION 133. { + Captions. The part and section headings or
captions used in this Act are provided only for convenience in
locating provisions of this Act and do not become part of the
statute law of this state or express any legislative intent in
the enactment of this Act. + }
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