Tax Law Alert: Credits Can No Longer Be Used to Pay the Oregon "Minimum Tax"

The Oregon Legislature has amended the corporate minimum tax law to provide that credits cannot be used to pay the corporate minimum tax. This change effectively overturns the decision by the Oregon Supreme Court in Con-way Inc. & Affiliates v. Department of Revenue, a case argued by Stoel Rives, that credits could be used to pay the corporate minimum tax.

This change is effective for tax years beginning on or after January 1, 2015 and expires for tax years beginning on or after January 1, 2021. The amendment appears to have a retroactive element: Oregon tax law, as amended, prevents a taxpayer from paying the corporate minimum tax with previously acquired credits that are carried forward. As a general matter, Oregon tax law can be changed retroactively. However, the amendment may not be valid for other reasons, to the extent it disallows a taxpayer from paying a corporate minimum tax liability with credits acquired before the enactment of the amendment.

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