(1) A credit against taxes imposed by ORS chapter 316 (or, if the taxpayer is a corporation, under ORS chapter 317 or 318) for a pollution control facility or facilities certified under ORS 468.170 shall be allowed if the taxpayer qualifies under subsection (4) of this section.
(2) For a facility certified under ORS 468.170, the maximum credit allowed in any one tax year shall be the lesser of the tax liability of the taxpayer or the applicable percentage of the certified cost of the facility, as determined under ORS 468.173 or 468.183, multiplied by the certified percentage allocable to pollution control, divided by the number of years of the facility’s useful life. The number of years of the facility’s useful life used in this calculation shall be the remaining number of years of useful life at the time the facility is certified but not less than one year nor more than 10 years.
(3) To qualify for the credit the pollution control facility must be erected, constructed or installed in accordance with the provisions of ORS 468.165 (1) and must be certified for tax relief under ORS 468.155 to 468.190.
(4) To qualify for a tax credit under this section:
(a) The taxpayer who is allowed the credit must be:
(A) The owner, including a contract purchaser, of the trade or business that utilizes Oregon property requiring a pollution control facility to prevent or minimize pollution;
(B) A person who, as a lessee or pursuant to an agreement, conducts the trade or business that operates or utilizes such property; or
(C) A person who, as an owner, including a contract purchaser, or lessee, owns or leases a pollution control facility that is used:
(i) In a business that is engaged in a production activity described in 40 C.F.R. 430.20 (as of July 1, 1998); or
(ii) For recycling, material recovery or energy recovery as defined in ORS 459.005; and
(b) The facility must be owned or leased during the tax year by the taxpayer claiming the credit and must have been in use and operation during the tax year for which the credit is claimed.
(5) Regardless of when the facility is erected, constructed or installed, a credit under this section may be claimed by a taxpayer:
(a) For a facility qualifying under ORS 468.165 (1)(a) or (b), only in those tax years which begin on or after January 1, 1967.
(b) For a facility qualifying under ORS 468.165 (1)(c), in those tax years which begin on or after January 1, 1973.
(c) For a facility qualifying under ORS 468.165 (1)(d), in those tax years which begin on or after January 1, 1984.
(6) For a facility certified under ORS 468.170, the maximum total credit allowable shall not exceed one-half of the certified cost of the facility multiplied by the certified percentage allocable to pollution control.
(7) The credit provided by this section is not in lieu of any depreciation or amortization deduction for the facility to which the taxpayer otherwise may be entitled under ORS chapter 316, 317 or 318 for such year.
(8) Upon any sale, exchange or other disposition of a facility, notice thereof shall be given to the Environmental Quality Commission who shall revoke the certification covering such facility as of the date of such disposition. Notwithstanding ORS 468.170 (4)(c), the transferee may apply for a new certificate under ORS 468.170, but the tax credit available to such transferee shall be limited to the amount of credit not claimed by the transferor. The sale, exchange or other disposition of shares in an S corporation as defined in section 1361 of the Internal Revenue Code or of a partner’s interest in a partnership shall not be deemed a sale, exchange or other disposition of a facility for purposes of this subsection.
(9) Any tax credit otherwise allowable under this section which 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 such 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, but may not be carried forward for any tax year thereafter. Credits may be carried forward to and used in a tax year beyond the years specified in ORS 468.170.
(10) The taxpayer’s adjusted basis for determining gain or loss shall not be further decreased by any tax credits allowed under this section.
(11) A person described in subsection (4)(a)(C) of this section may, but need not, operate the facility or conduct a trade or business that utilizes property requiring the facility. If more than one person has an interest under subsection (4)(a)(C) of this section in the facility, only one person may claim the credit allowed under this section. However, portions of the facility may be certified separately in the same manner as provided in ORS 468.170 (8) if ownership of the portions is in more than one person. The person claiming the credit as between an owner, including a contract purchaser, and lessee under this subsection shall be designated in a written statement signed by both the lessor and lessee of the facility. This statement shall be filed with the Department of Revenue not later than the final day of the first tax year for which a tax credit is claimed.
(12)(a) A taxpayer may not be allowed a tax credit under this section for any tax year during which the taxpayer is convicted of a felony under ORS 468.922 to 468.956 that is related to the facility for which the tax credit would otherwise be claimed, or for the four tax years succeeding the tax year during which the taxpayer is convicted.
(b) The amount of any tax credit that is otherwise allowable under this section but for paragraph (a) of this subsection shall be considered to be claimed by the taxpayer for purposes of determining the amount of tax credit that may be claimed in a tax year in which paragraph (a) of this subsection permits the taxpayer to claim the credit. [1993 c.730 §30 (enacted in lieu of 316.097 and 317.116); 1993 c.560 §110a; 1995 c.746 §1; 1997 c.99 §5; 1997 c.325 §39; 1999 c.1101 §1; 2001 c.928 §4]
Note: Section 3, chapter 928, Oregon Laws 2001, provides:
Sec. 3. (1) Notwithstanding ORS 315.304 (9), in the case of a pollution control facility for which unexpired tax credits exist as of the tax year of the taxpayer that begins in the 2001 calendar year, if the facility is in use and operation during the tax year immediately following the third succeeding tax year described in ORS 315.304 (9), any credit under ORS 315.304 remaining unused may be carried forward to that fourth succeeding tax year. If the facility is in use and operation during the tax year immediately following the fourth succeeding tax year, any credit under ORS 315.304 remaining unused may be carried forward to that fifth succeeding tax year. If the facility is in use and operation during the tax year immediately following the fifth succeeding tax year, any credit under ORS 315.304 remaining unused may be carried forward to that sixth succeeding tax year, but may not be carried forward to any tax year thereafter.
(2) For purposes of this section, unexpired tax credits include credits claimed pursuant to ORS 315.304 (2) and credits carried over from previous tax years pursuant to ORS 315.304 (9). [2001 c.928 §3]
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