(1) A resident individual shall be allowed a credit of $800 against the taxes otherwise due under this chapter, for installing or connecting to a sewage treatment works if:
(a) Required by an order issued, before July 1, 1989, under ORS 454.275 to 454.380 or ORS chapters 468, 468A and 468B;
(b) Required by a rule adopted, before July 1, 1989, by the Environmental Quality Commission;
(c) Required by, installed or connected pursuant to the terms of an intergovernmental agreement, entered into before July 1, 1989, between a local governing body and the Environmental Quality Commission; or
(d) Required by an order under ORS 222.840 to 222.915 or 431.705 to 431.760 issued after January 1, 1988, and before July 1, 1995.
(2) To qualify for the credit under this section:
(a) Subject to subsection (4) of this section, the credit must be claimed for the year in which the connection is made or the costs are incurred. The credit applies to installations or connections made on or after January 1, 1985.
(b) The taxpayer who is allowed the credit must be the person who actually expended funds for construction or installation of the project.
(c) The treatment works must be required by an order or rule of the Environmental Quality Commission, required by, installed or connected consistent with an intergovernmental agreement between a local governing body and the Environmental Quality Commission or required by an order or finding under ORS 222.840 to 222.915 or 431.705 to 431.760.
(d) The residence connected to the treatment works must be the principal residence of, and owned by, the taxpayer claiming the credit.
(3) The credit allowed in any one year shall not exceed one-fifth of the total amount of the credit granted under this section per qualifying residence or the tax liability of the taxpayer.
(4) Any tax credit otherwise allowable under this section that is not used by the taxpayer in a particular year may be carried forward and offset against the taxpayer’s tax liability for the next succeeding tax year. Any credit remaining unused in that next succeeding tax year may be carried forward and used in the second succeeding tax year, and likewise any credit not used in that second succeeding tax year may be carried forward and used in the third succeeding tax year, and any credit not used in that third succeeding tax year may be carried forward and used in the fourth succeeding tax year, and any credit not used in that fourth succeeding tax year may be carried forward and used in the fifth succeeding tax year, and any credit not used in that fifth succeeding tax year may be carried forward and used in the sixth succeeding tax year, and any credit not used in that sixth succeeding tax year may be carried forward and used in the seventh succeeding tax year, and any credit not used in that seventh succeeding tax year may be carried forward and used in the eighth succeeding tax year, but may not be carried forward for any tax year thereafter.
(5) A husband and wife who file separate returns for a taxable year may each claim a share of the tax credit that would have been allowed on a joint return in proportion to the contribution of each.
(6) The tax claim for tax credit shall be substantiated by submission, with the tax return, of receipt of payment by the taxpayer. For purposes of this subsection, “receipt of payment” means a canceled check or an actual receipt for payment issued by the installing or constructing entity and issued on the date the payment is or was actually acknowledged. The requirement for substantiation may be waived partially, conditionally or absolutely, as provided under ORS 315.063.
(7) This section applies for costs actually incurred for installing or connecting to a sewage treatment works pursuant to an order, rule or intergovernmental agreement of the Environmental Quality Commission under ORS 454.275 to 454.380 or ORS chapters 468, 468A and 468B. [1987 c.890 §§2,3; 1989 c.953 §1; 1991 c.781 §1; 1995 c.54 §8; 2003 c.46 §38]
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