77th OREGON LEGISLATIVE ASSEMBLY--2013 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 534
House Bill 2230
Introduced and printed pursuant to House Rule 12.00. Presession
filed (at the request of Governor John A. Kitzhaber, M.D., for
Department of Revenue)
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.
Restructures statutes governing income tax subtractions
allowable for military pay to taxpayers.
Applies to tax years beginning on or after January 1, 2014.
Takes effect on 91st day following adjournment sine die.
A BILL FOR AN ACT
Relating to subtraction for military pay; creating new
provisions; amending ORS 316.680; repealing ORS 316.789 and
316.791; and prescribing an effective date.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + Section 2 of this 2013 Act is added to and made
a part of ORS chapter 316. + }
SECTION 2. { + (1) As used in this section:
(a) 'Armed Forces of the United States' means all regular and
reserve components of the United States Army, Navy, Air Force,
Marine Corps and Coast Guard and other uniformed services under
the orders of the President of the United States.
(b) 'Military pay' means pay for active duty, inactive duty,
training and reserve component duty, including state active duty,
and any other compensation, other than retirement pay or pension,
paid by the Armed Forces of the United States to a member of the
Armed Forces of the United States.
(c) 'Reserve component duty' includes duty performed as a
member of the reserve components that is not federal active duty.
(d) 'Reserve components' includes all National Guard and
reserve departments of the Armed Forces of the United States.
(e) 'Uniformed services' includes the commissioned corps of the
National Oceanic and Atmospheric Administration and the United
States Public Health Service.
(2) There shall be subtracted from federal taxable income
military pay received for:
(a) Service performed outside this state in the year of initial
draft or enlistment or in the year of discharge.
(b) Service performed outside this state during any month
beginning on or after August 1, 1990, and before the date
designated by the President of the United States as the date of
termination of combatant activities in the Persian Gulf Desert
Shield area.
(c) Service by a member of the reserve components, if:
(A) The military pay is for service performed when the taxpayer
is away from the home of the taxpayer overnight;
(B) The taxpayer is required to be away from home overnight in
order to perform the service; and
(C) The service is of a duration of at least 21 consecutive
days, although the consecutive days need not be in the same tax
year.
(d) Service not otherwise qualified for a subtraction under
paragraphs (a) to (c) of this subsection, not to exceed $6,000
per year.
(3) The total amount subtracted under this section may not
exceed the taxpayer's total military pay included in federal
taxable income for the tax year. + }
SECTION 3. ORS 316.680 is amended to read:
316.680. (1) There shall be subtracted from federal taxable
income:
(a) The interest or dividends on obligations of the United
States and its territories and possessions or of any authority,
commission or instrumentality of the United States to the extent
includable in gross income for federal income tax purposes but
exempt from state income taxes under the laws of the United
States. However, the amount subtracted under this paragraph shall
be reduced by any interest on indebtedness incurred to carry the
obligations or securities described in this paragraph, and by any
expenses incurred in the production of interest or dividend
income described in this paragraph to the extent that such
expenses, including amortizable bond premiums, are deductible in
determining federal taxable income.
(b) The amount of any federal income taxes accrued by the
taxpayer during the taxable year as described in ORS 316.685,
less the amount of any refunds of federal taxes previously
accrued for which a tax benefit was received.
{ - (c)(A) If the taxpayer does not qualify for the
subtraction under subparagraph (B) of this paragraph,
compensation (other than pension or retirement pay) received for
active service performed by a member of the Armed Forces of the
United States in an amount not to exceed $6,000 per annum. As
used in this subparagraph, ' active service' includes weekend
drills, annual training, summer camp, special school attendance
and battle assemblies. - }
{ - (B) For the tax year of initial draft or enlistment into
the Armed Forces of the United States or for the tax year of
discharge from or termination of full-time active duty for the
Armed Forces of the United States, compensation (other than
pension or retirement pay or pay for service when on military
reserve duty) paid by the Armed Forces of the United States for
services performed outside this state, if the taxpayer is on
active duty as a full-time officer, enlistee or draftee, with the
Armed Forces of the United States. - }
{ - (d) - } { + (c) + } Amounts allowable under sections
2621(a)(2) and 2622(b) of the Internal Revenue Code to the extent
that the taxpayer does not elect under section 642(g) of the
Internal Revenue Code to reduce federal taxable income by those
amounts.
{ - (e) - } { + (d) + } Any supplemental payments made to
JOBS Plus Program participants under ORS 411.892.
{ - (f)(A) - } { + (e)(A) + } Federal pension income that
is attributable to federal employment occurring before October 1,
1991. Federal pension income that is attributable to federal
employment occurring before October 1, 1991, shall be determined
by multiplying the total amount of federal pension income for the
tax year by the ratio of the number of months of federal
creditable service occurring before October 1, 1991, over the
total number of months of federal creditable service.
(B) The subtraction allowed under this paragraph applies only
to federal pension income received at a time when:
(i) Benefit increases provided under chapter 569, Oregon Laws
1995, are in effect; or
(ii) Public Employees Retirement System benefits received for
service prior to October 1, 1991, are exempt from state income
tax.
(C) As used in this paragraph:
(i) 'Federal creditable service' means those periods of time
for which a federal employee earned a federal pension.
(ii) 'Federal pension' means any form of retirement allowance
provided by the federal government, its agencies or its
instrumentalities to retirees of the federal government or their
beneficiaries.
{ - (g) - } { + (f) + } Any amount included in federal
taxable income for the tax year that is attributable to the
conversion of a regular individual retirement account into a Roth
individual retirement account described in section 408A of the
Internal Revenue Code, to the extent that:
(A) The amount was subject to the income tax of another state
or the District of Columbia in a prior tax year; and
(B) The taxpayer was a resident of the other state or the
District of Columbia for that prior tax year.
{ - (h) - } { + (g) + } Any amounts awarded to the taxpayer
by the Public Safety Memorial Fund Board under ORS 243.954 to
243.974 to the extent that the taxpayer has not taken the amount
as a deduction in determining the taxpayer's federal taxable
income for the tax year.
{ - (i) - } { + (h) + } If included in taxable income for
federal tax purposes, the amount withdrawn during the tax year in
qualified withdrawals from a college savings network account
established under ORS 348.841 to 348.873.
(2) There shall be added to federal taxable income:
(a) Interest or dividends, exempt from federal income tax, on
obligations or securities of any foreign state or of a political
subdivision or authority of any foreign state. However, the
amount added under this paragraph shall be reduced by any
interest on indebtedness incurred to carry the obligations or
securities described in this paragraph and by any expenses
incurred in the production of interest or dividend income
described in this paragraph.
(b) Interest or dividends on obligations of any authority,
commission, instrumentality and territorial possession of the
United States that by the laws of the United States are exempt
from federal income tax but not from state income taxes. However,
the amount added under this paragraph shall be reduced by any
interest on indebtedness incurred to carry the obligations or
securities described in this paragraph and by any expenses
incurred in the production of interest or dividend income
described in this paragraph.
(c) The amount of any federal estate taxes allocable to income
in respect of a decedent not taxable by Oregon.
(d) The amount of any allowance for depletion in excess of the
taxpayer's adjusted basis in the property depleted, deducted on
the taxpayer's federal income tax return for the taxable year,
pursuant to sections 613, 613A, 614, 616 and 617 of the Internal
Revenue Code.
(e) For taxable years beginning on or after January 1, 1985,
the dollar amount deducted under section 151 of the Internal
Revenue Code for personal exemptions for the taxable year.
(f) The amount taken as a deduction on the taxpayer's federal
return for unused qualified business credits under section 196 of
the Internal Revenue Code.
(g) The amount of any increased benefits paid to a taxpayer
under chapter 569, Oregon Laws 1995, under the provisions of
chapter 796, Oregon Laws 1991, and under section 26, chapter 815,
Oregon Laws 1991, that is not includable in the taxpayer's
federal taxable income under the Internal Revenue Code.
(h) The amount of any long term care insurance premiums paid or
incurred by the taxpayer during the tax year if:
(A) The amount is taken into account as a deduction on the
taxpayer's federal return for the tax year; and
(B) The taxpayer claims the credit allowed under ORS 315.610
for the tax year.
(i) Any amount taken as a deduction under section 1341 of the
Internal Revenue Code in computing federal taxable income for the
tax year, if the taxpayer has claimed a credit for claim of right
income repayment adjustment under ORS 315.068.
(j) If the taxpayer makes a nonqualified withdrawal, as defined
in ORS 348.841, from a college savings network account
established under ORS 348.841 to 348.873, the amount of the
withdrawal that is attributable to contributions that were
subtracted from federal taxable income under ORS 316.699.
(3) Discount and gain or loss on retirement or disposition of
obligations described under subsection (2)(a) of this section
issued on or after January 1, 1985, shall be treated for purposes
of this chapter in the same manner as under sections 1271 to 1283
and other pertinent sections of the Internal Revenue Code as if
the obligations, although issued by a foreign state or a
political subdivision of a foreign state, were not tax exempt
under the Internal Revenue Code.
SECTION 4. { + ORS 316.789 and 316.791 are repealed. + }
SECTION 5. { + Section 2 of this 2013 Act, the amendments to
ORS 316.680 by section 3 of this 2013 Act and the repeal of ORS
316.789 and 316.791 by section 4 of this 2013 Act apply to tax
years beginning on or after January 1, 2014. + }
SECTION 6. { + This 2013 Act takes effect on the 91st day
after the date on which the 2013 regular session of the
Seventy-seventh Legislative Assembly adjourns sine die. + }
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