005

Chair Butler

Calls meeting to order at 1:34 p.m.

ORIENTATION

012

Lizbeth Martin-Mahar

Begins overview presentation of Corporate Excise Tax (Exhibit 1).

018

Martin-Mahar

Slide: Net Corporate Excise and Income Payments

045

Martin-Mahar

Slide: Corporate Income and Excise Tax Payments

078

Rep. Boquist

Asks about growth rate of project management category according to a previous economic forecast.

094

Paul Warner

Responds that the numbers on the corporate side actually involve very few companies generating the most tax payments. The number of project management companies is small and therefore shows a small corporate tax return on the chart.

109

Chair Butler

Comments about S-type corporation taxes and built-in gains tax.

132

Martin-Mahar

Slide: Industry Sectors With a Decline

143

Martin-Mahar

Slide: Industry Sectors’ Corp. Estimated Payments

153

Martin-Mahar

Slide: Business Income Tax Returns

192

Martin-Mahar

Slide: Business Tax Returns by Income

226

Martin-Mahar

Slide: Business Income by Business Type

250

Martin-Mahar

Slide: Business Income Statement (2 slides)

330

Martin-Mahar

Slide: States Corporate Top Tax Rates

350

Martin-Mahar

Slide: Total OR Additions and Subtractions

393

Martin-Mahar

Slide: Total Amount of Corp. Tax Credits Used

473

Martin-Mahar

Slide: Corporate Tax Credits Used

TAPE 18 SIDE A  (malfunction)

TAPE 17 SIDE B

002

Rep. Boquist

Asks for clarification of source document used for 2002 data in tax credits slide.

015

Martin-Mahar

Confirms that data is in the booklet Oregon Corporate and Excise and Income Tax (Exhibit 2).

039

Martin-Mahar

Slide: Trends in C Corporations Utilization of Major Tax Credits

052

Martin-Mahar

Slide: Trends in C Corporations’ Unused Tax Credits

072

Rep. Riley

Asks for explanation of unused tax credit.

074

Martin-Mahar

Responds that they are non-refundable credits. A credit can only be used to reduce the corporation’s tax liability to zero. If there are credits unused, they can be carried forward to the next year.

098

Rep. Esquivel

Clarification question about research unused credits that have been expanded. Does that mean that different types of businesses have been included in this category or the amount?

103

Martin-Mahar

Responds that both have been expanded. The definition of research has been expanded to include any businesses that have a research component to it. Previously this category only included high-tech computing.

111

Rep. Riley

Asks if OR is tied to the federal code regarding  the length of time that a business can carry-forward a credit.

113

Martin-Mahar

Responds that no, OR has different carry-forward provisions than the federal code does.

115

Martin-Mahar

Continuation of Unused Credit Trends slide.

139

Martin-Mahar

Slide: Corporate Excise Tax

195

Martin-Mahar

Slide: Number of C and S Corporations by Industry Type

229

Martin-Mahar

Slide: C Corporate Tax Returns and Net Tax. Comments that two percent of the returns pay 93% of the tax.

263

Rep. Butler

Comments that he is surprised about the small amount of credits being used by the largest corporations in OR (refers to graph on page 8 of Exhibit 1).

352

Warner

Responds that 2002 was a “recession-trough” year, a 48% drop from the prior year. This may explain the increase of credits used.  Another issue is that federal deductions are often rolled up into the unused credits category.

370

Rep. Hass

Clarifies that credits are assessed after the 6.6% OR tax, but items shown in the booklet (Exhibit 2) that are subtractions are actually deductions. This information is not reflected in the slide.

394

Martin-Mahar

Slide: Top 50 Corporate Taxpayers

430

Martin-Mahar

Slide: Number of C and S Corporations Paying the Minimum Tax

TAPE 18 SIDE B

021

Martin-Mahar

Slide: Breakdown of C-Corporate Returns by Income

058

Martin-Mahar

Slide: 2002 Multi-State Corporations

082

Martin-Mahar

Slide: Oregon Income Taxes. Explains what “nexus” means related to multi-state apportionment.

112

Martin-Mahar

Slide: Oregon’s Multi-State Corp. Apportionment Formula

144

Martin-Mahar

Slide: Multi-State Income Apportionment

168

Martin-Mahar

Slide: State Apportionment Formulas

184

Martin-Mahar

Slide: Apportioning Business Income

204

Rep. Butler

Asks if it is possible for a multi-state company to have more than 100% in weighted sales.

232

Warner

Responds that is it possible to have more than 100% if states have different formulas for property, payroll, and sales.

255

Rep. Butler

Comments that it would be helpful when legislation comes up for corporate taxation that a representative from the Dept. of Revenue appear before the committee to line out the scenarios of the elements that attract businesses to OR.

278

Martin-Mahar

Slide: Apportioning Business Income

206

Martin-Mahar

Slide: Double-Weighted Sales

280

Martin-Mahar

Slide: Super-Weighted Sales

340

Martin-Mahar

Slide: Sales Throwback Rule

400

Martin-Mahar

Slide: Throwback Sales by Industry Sector

425

Warner

Committee agenda announcements.

438

Acting Chair Berger

Adjourns meeting at 3:00 p.m.

Tape Log Submitted by:

Reviewed by:

Kristi Bowman, Committee Assistant

Kim Taylor James, Committee Coordinator