Oregon Updates IRC Conformity

By Margaret Eisler

On April 4, 2024, Oregon Governor Tina Kotek signed legislation advancing the state’s Internal Revenue Code (IRC) conformity date from December 31, 2022 to December 31, 2023, for transactions or activities occurring on or after January 1, 2024, in tax years beginning on or after January 1, 2024. (L. 2024, H4034, effective 06/06/2024.)

Conformity to federal law.

For tax years beginning on or after January 1, 2024, Oregon’s income tax and corporation excise tax law conform to the IRC as amended and in effect on December 31, 2023, or, if related to the definition of taxable income, as applicable to the tax year of the taxpayer. The effective and applicable dates, and the exceptions, special rules and coordination with the IRC, as amended, relative to those dates, contained in federal law amending the IRC and enacted before January 1, 2024, apply for Oregon personal income and corporate excise and income tax purposes, to the extent they can be made applicable, in the same manner as they are applied under the IRC and related law.

With regard to Oregon’s corporate activity tax, for tax years beginning on or after January 1, 2024, “Internal Revenue Code,” except where the Legislative Assembly has provided otherwise, refers to the laws of the United States or to the Internal Revenue Code as they are amended and in effect on December 31, 2023.

Connection to future IRC amendments removed: The legislation repeals Or. Rev. Stat. § 305.842(2), an impermissible provision for continuing update to federal law property tax definitions.

Interest and penalties.

Interest and penalties on a deficiency that is assessed against any taxpayer for a tax year beginning before January 1, 2024 that is attributable to any retroactive treatment under specified amendments in the legislation will be canceled.

Interest on refunds.

Interest will not be paid on a refund that is due any taxpayer for a tax year beginning before January 1, 2024 on account of any retroactive treatment under specified amendments in the legislation.

Amended returns.

Any changes required because of certain bill amendments for a tax year beginning before January 1, 2024 must be made by filing an amended return within the time prescribed by law. If a taxpayer fails to file such an amended return, the Department of Revenue will make any changes on the return within the period specified for issuing a notice of deficiency or claiming a refund as otherwise provided by law with respect to that return, or within one year after the filing of a return for a return for a tax year beginning on or after January 1, 2024 and before January 1, 2025, whichever period expires later.