On August 2, 2017, Governor Kate Brown signed House Bill (HB) 2066, permanently barring C corporations from applying earned or purchased tax credits against Oregon minimum tax liabilities.
Background
Oregon’s minimum tax is assessed on Oregon-sourced gross receipts of C corporations, with a current cap of $100,000 per year for those with Oregon receipts of $100 million or more. Prior to 2015, a wide variety of tax credits were allowed as offsets to the minimum tax.
In 2015, Oregon imposed a six-year suspension on credits for tax years beginning on or after January, 1 2015 with the suspension set to expire for tax years beginning on or after January 1, 2021. HB 2066 removed the sunset of that suspension, permanently prohibiting C corporations from using tax credits to offset their minimum tax liabilities.
Impact
There’s no immediate impact on the Oregon tax liabilities of C corporations because the suspension period enacted under previous law wasn’t set to sunset until 2021. However, C corporations with significant Oregon credit carryover balances included in deferred tax assets may need to determine whether a valuation allowance is now required.
We're Here to Help
For more information about taxation in Oregon and other states, or for help determining what the implications are for your business, email statetax@mossadams.com or visit our services page.