Bill Text: OR HB2730 | 2011 | Regular Session | Introduced

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Bill Title: Relating to subtraction from taxable income for investment of capital gains; prescribing an effective date.

Spectrum: Partisan Bill (Democrat 6-0)

Status: (Failed) 2011-06-30 - In committee upon adjournment. [HB2730 Detail]

Download: Oregon-2011-HB2730-Introduced.html

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     76th OREGON LEGISLATIVE ASSEMBLY--2011 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 938

                         House Bill 2730

Sponsored by Representative READ, Senator HASS; Representatives
  BARKER, DEMBROW, DOHERTY, GELSER (Presession filed.)

                             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.

  Creates subtraction from taxable income for net capital gain
that is invested in certain businesses. Applies to tax years
beginning on or after January 1, 2011.
  Takes effect on 91st day following adjournment sine die.

                        A BILL FOR AN ACT
Relating to subtraction from taxable income for investment of
  capital gains; and prescribing an effective date.
Be It Enacted by the People of the State of Oregon:
  SECTION 1.  { + Section 2 of this 2011 Act is added to and made
a part of ORS chapter 316. + }
  SECTION 2.  { + (1) As used in this section:
  (a) 'Invest' means to exchange cash for equity, debt,
convertible debt or management responsibilities, accompanied by
terms that substantiate ownership or control of an interest in a
business. 'Invest' does not mean to make a loan to a business.
  (b) 'Qualified business' means a sole proprietorship,
partnership, company, cooperative, corporation or other form of
business entity that is organized or authorized to do business
under Oregon law for profit.
  (c) 'Qualified net capital gain' means net capital gain that is
treated as net capital gain for federal tax purposes for the tax
year, that is includable in taxable income in this state for the
tax year and an amount equal to which is invested in a qualified
business.
  (2) There shall be subtracted from federal taxable income any
qualified net capital gain, not to exceed $1 million, for the tax
year if the following conditions are met:
  (a) The investment occurs on or before the due date for the
return for the tax year or the expiration of the extension period
for filing that return, if any; and
  (b) The investment continues for at least 24 months.
  (3) If at any time the Department of Revenue determines that a
taxpayer is not in compliance with any of the provisions of this
section, the department shall disallow the subtraction under this
section. Upon this disallowance, the department shall determine
the amount of tax due absent the subtraction under this section
and immediately shall collect any taxes due by reason of the
disallowance.

  (4) The Oregon Business Development Department, in consultation
with the Department of Revenue, shall by rule establish criteria
and policies for certifying net capital gain as qualified net
capital gain under this section. + }
  SECTION 3.  { + Section 4 of this 2011 Act is added to and made
a part of ORS chapter 317. + }
  SECTION 4.  { + (1) As used in this section:
  (a) 'Invest' means to exchange cash for equity, debt,
convertible debt or management responsibilities, accompanied by
terms that substantiate ownership or control of an interest in a
business. 'Invest' does not mean to make a loan to a business.
  (b) 'Qualified business' means a sole proprietorship,
partnership, company, cooperative, corporation or other form of
business entity that is organized or authorized to do business
under Oregon law for profit.
  (c) 'Qualified net capital gain' means net capital gain that is
treated as net capital gain for federal tax purposes for the tax
year, that is includable in taxable income in this state for the
tax year and an amount equal to which is invested in a qualified
business.
  (2) There shall be subtracted from federal taxable income any
qualified net capital gain, not to exceed $1 million, for the tax
year if the following conditions are met:
  (a) The investment occurs on or before the due date for the
return for the tax year or the expiration of the extension period
for filing that return, if any; and
  (b) The investment continues for at least 24 months.
  (3) If at any time the Department of Revenue determines that a
taxpayer is not in compliance with any of the provisions of this
section, the department shall disallow the subtraction under this
section. Upon this disallowance, the department shall determine
the amount of tax due absent the subtraction under this section
and immediately shall collect any taxes due by reason of the
disallowance.
  (4) The Oregon Business Development Department, in consultation
with the Department of Revenue, shall by rule establish criteria
and policies for certifying net capital gain as qualified net
capital gain under this section. + }
  SECTION 5.  { + Sections 2 and 4 of this 2011 Act apply to tax
years beginning on or after January 1, 2011. + }
  SECTION 6.  { + This 2011 Act takes effect on the 91st day
after the date on which the 2011 session of the Seventy-sixth
Legislative Assembly adjourns sine die. + }
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