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The Oregon Administrative Rules contain OARs filed through October 15, 2014
 
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OREGON LIQUOR CONTROL COMMISSION

 

DIVISION 8

PRIVILEGE TAX

845-008-0050

Tax Reporting and Tax Liability

All wineries must file tax statements with the Commission which include the quantity of wine produced, purchased or received during the calendar year. This rule explains the criteria to qualify as an annual reporter as well as the reporting requirements for both annual and monthly reporters.

(1) Annual Reporting Eligibility and Requirements.

(a) A winery is eligible to file a single annual tax statement for any particular calendar year if the winery either:

(A) Was not liable for any privilege tax in the prior calendar year and does not expect to be liable for any privilege tax in the current calendar year; or

(B) The winery is in its first calendar year of operation and does not expect to be liable for any privilege tax in the current calendar year.

(b) A winery that files annual tax statements must:

(A) Submit the statement and all required tax schedules for a given calendar year by January 20 of the following year;

(B) Submit a tax statement that shows the total amount of wine removed from federal bond during the calendar year preceding the reporting date as well as any exemptions being claimed for wine that was removed from bond;

(C) Submit by the January 20 reporting date any tax owed on wine removed from bond during a calendar year and not subject to exemption; and

(D) Submit an annual tax statement and supporting schedules by the due date even if the winery did not remove any wine from federal bond or the winery is claiming exemptions for all of the wine it removed from bond.

(c) If a winery discovers during the calendar year that it will owe tax, it no longer qualifies for annual filing and must begin monthly filing on the 20th of the following month. The month when monthly filing begins is also the catch-up month when any tax owed year-to-date must be submitted to the Commission.

(d) Failure to file a tax statement and supporting schedules or to pay tax owed by the January 20 due date may result in the assessment of penalties and interest as set forth in OAR 845-008-0080.

(2) Monthly Reporting Requirements.

(a) A winery that does not qualify for annual reporting must file a monthly tax statement. If a winery knows or reasonably should know that it will have a tax liability in the current calendar year, it must report monthly.

(b) A winery that files monthly tax statements must:

(A) Submit the statement and all required tax schedules by the 20th of each month for the preceding calendar month;

(B) Submit a tax statement that shows the total amount of wine removed from federal bond during the calendar month preceding the reporting date as well as any exemptions being claimed for wine that was removed from bond;

(C) Submit any tax owed on wine removed from bond during a calendar month and not subject to exemption by the monthly reporting date; and

(D) Submit a monthly tax statement and supporting schedules by the due date even if the winery did not remove any wine from federal bond or the winery is claiming exemptions for all of the wine it removed from bond.

(c) Failure to file a tax statement and supporting schedules or to pay tax owed by the monthly due date may result in the assessment of penalties and interest as set forth in OAR 845-008-0080.

Stat. Auth.: ORS 471 & 473, 471.030, 471.730(1), (3) & (5), & 473.020
Stats. Implemented: ORS 473.060 & 473.070
Hist.: OLCC 19-2010, f. 12-22-10, cert. ef. 1-1-11

845-008-0060

Small Winery Exemption

ORS 473.050(5) provides that no tax shall be levied, collected or imposed upon the first 40,000 gallons of wine sold annually in Oregon from a United States manufacturer of wine producing less than 100,000 gallons annually. This rule explains the criteria to qualify for this small winery exemption.

(1) A winery qualifies to take the small winery exemption if the winery produces less than 100,000 gallons of wine during the calendar year in which the exemption is claimed. A winery’s total production for the year is measured by the volume of wine produced by fermentation as reported to the Alcohol and Tobacco Tax and Trade Bureau (TTB) for the calendar year. Wine is considered produced for Oregon tax purposes when fermentation is completed or the wine is removed from the fermentor.

(2) The winery claiming the small winery exemption must hold a federal basic permit to produce wine and must have produced a minimum of 1 gallon of wine in the calendar year that the exemption is taken. A winery that holds a federal basic permit to produce wine but does not produce any wine during a calendar year may not take the small winery exemption on any wine it removed from federal bond during that calendar year.

(3) A winery may exempt no more than 40,000 gallons of wine under this exemption during a calendar year. While eligibility for the small winery exemption is based on the current year’s wine production (less than 100,000 gallons), the exemption itself (no more than 40,000 gallons combined total) can be taken on any wine removed from bond during the year regardless of the year it was produced.

(4) A winery may claim the small winery exemption for wine that it removes from federal bond and intends, at the time of removal, to sell in Oregon. The exemption may be taken at the time of removal if the winery intends in good faith to sell the wine in Oregon. Wine qualifies as being sold in Oregon if ownership of the wine is, or is expected to be, transferred to a person or entity located within this state.

(5) The winery claiming the small winery exemption must have removed the exempt wine from federal bond. No exemption is available for wine that was not removed from bond by the winery claiming the exemption, such as wine that the winery received or imported federally tax-paid, or wine that the winery has transferred to another entity in bond.

(6) The Commission will deny the small winery exemption if it determines that allowance of the exemption would benefit a winery who would otherwise fail to qualify for use of the exemption.

(7) Wine that is claimed as exempt under the small winery exemption may not be claimed as exempt from tax under any other provisions of ORS 473.

(8) A bonded winery or warehouse may claim the small winery exemption on behalf of an eligible small winery for wine that the winery or warehouse receives from the transferring small winery and removes from bond, provided that all of the following requirements are met:

(a) The wine on which the exemption is claimed must have been produced by the small winery that transfers the exemption and must be eligible for exemption if it were to have been removed from bond by the transferring winery. The exemption may not be transferred on wine that the transferring winery received from another producer.

(b) The winery or warehouse taking the exemption on behalf of the transferring winery must remove the wine from bond.

(c) The transferring winery must hold title to the wine for which the exemption is transferred at the time the wine is removed from bond.

(d) The total amount of the exemption that may be claimed by a winery or warehouse on behalf of a small winery in any calendar year may not exceed 40,000 gallons minus all amounts claimed under the small winery exemption by the transferring small winery or by others on its behalf for that year. The transferring winery must provide to the transferee all information necessary for the transferee to determine the amount of exemption it may claim.

Stats Auth: ORS 471 & 473, 471.030, 471.730(1), (3) & (5), & 473.020
Stats implemented: ORS 473.050
Hist.: OLCC 13-2008, f. 12-17-08, cert. ef. 12-20-08; Renumbered from 845-010-0154 by OLCC 19-2010, f. 12-22-10, cert. ef. 1-1-11

845-008-0070

Export Exemption

ORS 473.050(2) provides that no tax shall be levied, collected or imposed upon any wine exported from the state. This rule explains the criteria to qualify for this export exemption.

(1) The export exemption can be used to recover taxes already paid to the Commission or to offset a current tax liability.

(2) A winery may claim the export exemption for wine that it removes from federal bond and exports from the state. The exemption may be taken at the time of removal if the winery intends in good faith to export the wine. Wine qualifies as being exported if the wine is, or is expected to be, transported to a location outside of Oregon. All export exemptions must be supported by proof of export such as a bill of lading or other shipping documentation.

(3) Wine that is claimed as exempt under the small winery exemption may not be claimed as exempt from tax under the export exemption.

(4) A winery may claim a refund for wine on which tax was paid to the Commission in a prior period if the wine is subsequently exported from the state. No refund will be issued if no tax was paid by the winery to the Commission on the wine being exported. No refund may be claimed on wine that was previously exempted from tax.

Stat. Auth.: ORS 471 & 473, 471.030, 471.730(1), (3) & (5), & 473.020
Stats. Implemented: ORS 473.050 & 473.060
Hist.: OLCC 19-2010, f. 12-22-10, cert. ef. 1-1-11

845-008-0080

Penalties and Interest

This rule describes the penalties and interest that may be assessed on a winery’s outstanding tax liability.

(1) Unless waived, the Commission will assess a penalty of 10% and interest at the rate of 1% per month on any tax that is not paid on the due date as specified in OAR 845-008-0050(1)(d) or (2)(c).

(2) ORS 473.060(2) provides that the Commission may waive any interest or penalty assessed on unpaid taxes if the Commission determines that the winery has made a good faith effort to comply with the privilege tax requirements set forth in ORS Chapter 473, OAR chapter 845 division 8, 845-010-0151, and 845-010-0170.

(3) Failure to file any tax statement and supporting schedules by the due date is a Category IV violation. Failure to file an accurate and complete tax statement and supporting schedules by the due date may result in the assessment of penalties and interest on any outstanding tax liability.

Stat. Auth.: ORS 471 & 473, 471.030, 471.730(1), (3) & (5), & 473.020
Stats. Implemented: ORS 473.060 & 473.140
Hist.: OLCC 19-2010, f. 12-22-10, cert. ef. 1-1-11

845-008-0090

Refunds

ORS 473.060(1) provides that the Commission may refund any tax payment imposed upon or paid in error by a winery. This rule explains the criteria for the refund process.

(1) A refund is the Commission returning money to the winery for over-paid taxes. It is distinguished from a credit, which is also for over-paid taxes but is used to offset a new tax liability.

(2) Refunds of privilege tax paid in a prior reporting period will be issued upon a written request with proper documentation showing that the tax was paid in error or that an exemption applies to wine on which tax was previously paid to the Commission. A refund will be issued only to the entity that previously paid the tax for which the refund is being claimed.

(3) If the refund request is for an amount over $1,000 an audit may be required before a refund will be issued.

(4) If at audit it is determined that a refund was issued in error and there is in fact an outstanding tax liability, then penalties and interest may be assessed.

Stat. Auth.: ORS 471 & 473, 471.030, 471.730(1), (3) & (5), & 473.020
Stats. Implemented: ORS 473.060
Hist.: OLCC 19-2010, f. 12-22-10, cert. ef. 1-1-11

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