| Corporation Excise and Income Tax |
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| Do I need to file? |
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Yes. Corporations doing business in Oregon or with income from an Oregon source are required to file.
No. Corporations with no business activity in Oregon, even if incorporated in or registered to do business in the state, are not required to file a corporation tax return.
"Doing business" means being engaged in any profit-seeking activity in Oregon. A taxpayer having one or more of the following in Oregon is clearly doing business:
- A stock of goods.
- An office.
- A place of business (other than an office) where affairs of the corporation are regularly conducted.
- Employees or representatives providing services to customers as the primary business activity (such as accounting or personal services), or services incidental to the sale of tangible or intangible personal property (such as installation, inspection, maintenance, warranty, or repair of a product).
- An economic presence through which the taxpayer regularly takes advantage of Oregon's economy to produce income.
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| Which form do I file? |
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Form 20. C Corporations doing business in Oregon file Form 20 and pay corporation excise tax. The minimum corporation excise tax is $10.
Form 20-I. Corporations not "doing business" in Oregon, as explained above, but with income from one or more Oregon sources, pay income tax and file Form 20-I. Income tax filers are not subject to a minimum tax.
Form 20-S. S Corporations doing business in Oregon file Form 20-S and generally pay the minimum $10 tax. Shareholders must include their share of S Corporation income or loss on their personal income tax returns.
Form 20-INS. Insurance companies doing business in Oregon file an Oregon Insurance Excise Tax Return, Form 20-INS, and are subject to the minimum $10 tax.
Tie to federal tax law
There is a retroactive connection to federal changes made since December 31, 2002, to the definition of federal taxable income, with two exceptions:
- No connection to the qualified production activities income (QPAI) deduction. An addition to the Oregon return is required, effective January 1, 2005; and
- No connection to certain subsidies for prescription drug plans, effective January 1, 2008.
Effective January 1, 2005, an automatic connection to future changes to the federal definition of taxable income applies in Oregon, unless a specific Oregon law provides for different treatment.
Oregon's computation of taxable income for C corporations begins with federal taxable income, with modifications required under Oregon tax law.
S corporations cannot be included in consolidated federal returns. IRC 1361(b) provides that a corporation that is a qualified subchapter S subsidiary (QSSS) is not treated as a separate corporation. All income, deductions, and credits of the QSSS will be treated as belonging to the S corporation. Oregon follows the federal provisions and tax treatment for S corporations owning a QSSS.
What is "income from an Oregon source"?
If you have tangible or intangible property or other assets being used in Oregon, any income you receive is Oregon-source income and, generally, your company must file an Oregon Corporation Income Tax Return. Public Law 86-272 provides exceptions to this requirement.
Due date
Returns for the calendar year are due on or before April 15. Returns for other tax periods are due the 15th day of the month following the due date of your federal corporation return. When the 15th falls on a Saturday, Sunday, or legal holiday, the due date is the next business day.
Extensions
Oregon honors extensions for filing your federal return. If you have a federal extension, the due date then becomes the 15th day of the month following the federal extension’s due date. You do not need to send the federal extension until you file your return.
If you need more time to file for Oregon only, answer question 1 on federal Form 7004, write “For Oregon Only” at the top, then attach it to your return when you file.
To avoid penalty and interest, mail any tax due with Form 20-V on or before the original due date of your return. More time to file does not mean more time to pay your tax.
Registering
Any corporation doing business in Oregon is required to register with the Secretary of State Corporation Division in addition to filing corporate excise tax returns.
Estimated payments
Estimated payments are required when your tax liability is expected to be at least $500 for a tax year.
To make estimated payments, send your payment with a completed Form 20-V.
Estimated payments are due quarterly. Due dates for estimated payments are:
- 15th day of the 4th month of tax year;
- 15th day of the 6th month;
- 15th day of the 9th month;
- 15th day of the 12th month.
You may be required to file by Electronic Fund Transfer (EFT) or call 503-947-2017.
Consolidated returns (ORS 317.705-317.725). If a corporation is a member of an affiliated group of corporations that filed a consolidated federal return, it must file an Oregon return based on that federal return.
A consolidated Oregon return is required when two or more affiliated corporations are:
- Included in a consolidated federal return;
- Unitary; and
- At least one of the affiliated corporations is doing business in Oregon or has income from Oregon sources.
Unitary business. A business that has, directly or indirectly between members or parts of the enterprise, either a sharing or an exchange of value shown by:
- Centralized management or a common executive force.
- Centralized administrative services or functions resulting in economies of scale.
- Flow of goods, capital resources, or services showing functional integration.
Corporations that are not unitary are excluded from the consolidated Oregon return.
Separate returns. Any corporation that files a separate federal return must file a separate Oregon return if they are doing business in Oregon or have income from an Oregon source.
A corporation subject to Oregon taxation must also file a separate Oregon return if it was included in a consolidated federal return, but was not unitary with any of the other affiliates. Oregon taxable income is computed by subtracting the income of the non-unitary affiliates from the taxable income from the consolidated federal return.
Publicly traded partnerships
A "publicly traded partnership" is a partnership treated as a corporation for federal tax purposes under IRC 7704.
The partners in a publicly traded partnership are not subject to tax on their distributive shares of partnership income. The publicly traded partnership is subject to corporation excise tax if it is doing business in Oregon or corporation income tax if it has income from an Oregon source.
REMICs (ORS 314.260)
A REMIC (Real Estate Mortgage Investment Conduit) must file Form 20-I if it derives prohibited transaction income from Oregon sources or has any resident holders of a residual interest. Income is from an Oregon source if it is derived from tangible property located in Oregon or from intangible property that is used in an Oregon business.
All REMICs required to file must file Form 20-I and attach a complete copy of federal Form 1066. The REMIC must also attach a federal Schedule Q for each residual interest holder for each quarter of the tax year. See the instructions for line 16 if net income is received from prohibited transactions.
Limited liability companies (LLC)
An LLC can be taxed as a partnership or a corporation. Oregon follows federal law in determining how an LLC is taxed.
An LLC taxed as a corporation must file an Oregon Corporation Excise Tax Return (Form 20) if doing business in Oregon, or an Oregon Corporation Income Tax Return (Form 20-I) if not doing business in Oregon but the LLC is receiving income from an Oregon source.
An LLC taxed as a partnership must file an Oregon partnership return, Form 65, if doing business in Oregon, receiving income from an Oregon source, or if it has any Oregon resident members. If the LLC has a corporate member, the member is taxed on its share of the LLC's Oregon income.
If an LLC is part of a corporation's overall business operations and is treated as a partnership, include the corporation's ownership share of LLC property, payroll, and sales in the apportionment percentage calculation on Schedule AP-1. See OAR 150-314.650.
Foreign LLCs are identified as unincorporated associations organized under the laws of a state other than Oregon, or a foreign country. Effective in 2005, Oregon's definition of a foreign LLC no matter when organized, includes an unincorporated association organized under the laws of a federally recognized American Indian tribe.
Political organizations
Political organizations (campaign committees, political parties) normally do not pay state or federal taxes. However, income earned from investments is taxable. Examples include interest earned on deposits, dividends from contributed stock, rents or royalties, and gains from the sale of contributed property.
Political organizations that are incorporated must file Form 20, Oregon Corporation Excise Tax Return. Unincorporated political organizations with taxable income are treated as corporations and must file Form 20-I, Oregon Corporation Income Tax Return. Unincorporated political organizations with no taxable income do not have to file an Oregon corporation tax return.
Deferred gain
Corporations may defer, for Oregon tax purposes, all gains realized in the exchange of like-kind property and involuntary conversions under IRC section 1031 or 1033, even though the replacement property is outside Oregon. Oregon will tax the deferred gain when it is included in federal taxable income.
Attach a copy of your Oregon Form 24 to the back of your Oregon return and check the "Form 24" box if all of the following apply:
- The corporation reported deferred gain on a federal Form 8824;
- All or part of the property exchanged or given up was located in Oregon; and
- All or part of the acquired property was located outside of Oregon.
See OAR 150-314.650 and 150-314.665(5) regarding apportionment of deferred gain.
How to assemble your Oregon tax return for mailing:
- Oregon Form 20, 20-I, 20-S, 20-INS;
- Schedule AP, Apportionment of Income;
- Schedule AF, Schedule of Affiliates;
- Form 37, Underpayment of Oregon Corporation Estimated Tax;
- Form 24, Oregon Like-Kind Exchanges/Involuntary Conversions;
- Worksheet FCG-20, Farm Liquidation Long-Term Capital Gain Tax Rate;
- Other Oregon statements;
- Oregon credit forms including notice of credit transfers;
- Federal extension, Form 7004;
- Copy of federal tax return and schedules.
Mail tax returns with tax due to:
Oregon Department of Revenue
PO Box 14790
Salem, OR 97309-0470
Mail returns with refunds or no tax due to:
Oregon Department of Revenue
PO Box 14777
Salem, OR 97309-0960
E-mail: corp.help.dor@state.or.us
When e-mailing or corresponding, please include your e-mail address and telephone number, including area code, in your message. Warning: E-mail is not secure. Do not include confidential data in your e-mail message. We will respond to tax law-related questions only. Account-related questions cannot be answered by e-mail. If you have an account-related question or you have received a letter, notice, or bill, please contact us by telephone.
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