(1) If for the taxable year an S corporation has the following, then there is hereby imposed a tax on the income of such corporation for the taxable year:
(a) Accumulated earnings and profits at the close of the taxable year; and
(b) Gross receipts more than 25 percent of which are passive investment income.
(2) The tax imposed under subsection (1) of this section shall be computed by multiplying the excess net passive income by the rate specified under ORS 317.061.
(3) The tax imposed under subsection (1) shall be considered a tax imposed under ORS chapter 317 or 318, whichever is applicable, and shall be returned, estimated, assessed and collected and otherwise treated in the same manner as the tax imposed under ORS chapter 317 or 318. The allocation and apportionment of income rules of this chapter and ORS chapter 305 apply to the income subject to the tax imposed under this section. The proceeds from the tax shall be distributed in the same manner as the tax imposed under ORS chapter 317 or 318, whichever is applicable.
(4) Notwithstanding subsection (6) of this section, the amount of passive investment income shall be determined by not taking into account any recognized built-in gain or loss of the S corporation for any taxable year in the recognition period. Terms used in the preceding sentence shall have the same respective meanings as when used in ORS 314.738.
(5) Except for estimated and other advance tax payments, no credits shall be allowed against the tax imposed under this section.
(6) To the extent applicable, the definitions, special rules and interpretations and other provisions of section 1375 of the Internal Revenue Code that relate to the measurement of excess net passive income shall apply to the tax imposed under this section.
(7) Section 1375(d) shall apply to the tax imposed under this section, except that “department” shall be substituted for the word “secretary” wherever that word appears. [1989 c.625 §47; 1997 c.839 §62]
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