Or. Admin. R. 123-635-0350 - Issues of Initial and Subsequent Annual Certifications

For purposes of annual certification as described in OAR 123-635-0300:

(1) The preliminarily certified business firm needs to have:

(a) Fully acquired Facility property and completed it in terms of construction, reconstruction, modification and installation of proposed improvements for purposes of subsection (c) of this section;

(b) Hired relevant employees; and

(c) Actually commenced new business operations at the Facility.

(2) The first such filing may occur not less than 24 months after the date, on which operations commenced according to section (1) of this rule (if the firm applied for preliminary certification on or after July 1, 2011), such that the exemption on taxable income may not begin at the earliest until:

(a) The second tax year after the year containing that date; or

(b) The next year following the year containing that date, if its second anniversary falls within the first 30 days after the tax year.

(3) For purposes of this first filing, the application shall show that after the date, on which the Department approved the preliminary certification:

(a) Business operations commenced at the Facility within:

(A) Six months, if only acquiring existing buildings or structures; or

(B) Eighteen months, if involving substantial construction or reconstruction; and

(b) Facility property did not remain in an unfinished state of construction, reconstruction, modification or installation for more than six months without significant progress toward completion of such activities.

(4) In order for the Department to certify the Facility with the first filing:

(a) Information in the application needs to indicate satisfaction of section (3) of this rule, except as allowed by Department staff through a written finding that any delay or interruption was reasonable and not excessive, given the complexity or extent of the business firm's investment in the Facility or of inadvertent circumstances.

(b) The location and nature of the Facility's business operation need to conform to that represented in the application for preliminary certification, including but not limited to any amendment according to OAR 123-635-0250(7).

(5) For purposes of an application for annual certification:

(a) Its approval shall not depend on any current issue of actual competition with other local businesses, Qualified Location or Unique Operations.

(b) The Department may deny the application if discovering that at the time of application for preliminary certification, the Facility was not at a Qualified Location or did not represent Unique Operations, including but not limited to the case where the preliminary certification application contained false or incomplete information.

(c) The Department may approve the application, even if the nature of the Facility or the business firm/ownership changes after the first filing, including but not limited to changes in:

(A) The composition of Facility property or its exact location; or

(B) The corporate or ownership structure or organization of the business.

(6) To allow a change described in subsection (5)(c) of this rule depends on:

(a) Direct, ongoing continuity with the original facility;

(b) Business operations remaining materially the same; and

(c) Relative to the location identified in the application for preliminary certification, the Facility is located at what was likewise a Qualified Location inside the same urban growth boundary or at a similarly proximate location.

(7) The business firm does not need to make its first filing as soon as permissible according to section (2) of this rule, or it might miss or skip any subsequent opportunity, for which it is allowed to apply for annual certification, such that the firm may still use the exemption for any remaining, eligible tax year that is not more than nine consecutive tax years after the first year, for which it is allowed as described in section (2) of this rule; however:

(a) Neither postponement of the first filing nor failure to apply in any subsequent tax year shall affect the period for which certification is otherwise allowed.

(b) The business firm may not claim or exercise the exemption under ORS 316.778 or 317.391 for any such tax year, pursuant to which it does not directly make application for annual certification as described in OAR 123-635-0300.

(8) If an application for annual certification is timely filed but denied by the Department, then the exemption is disallowed not only for that year, but also for all other remaining, eligible tax years (but without retroactive effect on any prior exemption).

Notes

Or. Admin. R. 123-635-0350

EDD 17-2002, f. 11-27-02, cert. ef. 12-2-02; EDD 9-2005, f. & cert. ef. 11-4-05; OBDD 5-2010, f. 1-29-10, cert. ef. 2-1-10; Renumbered from 123-155-0350, OBDD 1-2011, f. & cert. ef. 1-3-11; OBDD 12-2012, f. & cert. ef. 8-15-12; OBDD 5-2016, f. & cert. ef. 3/28/2016; OBDD 12-2017, amend filed 11/29/2017, effective 11/29/2017

Statutory/Other Authority: ORS 285A.075 & 285C.506(6) & (7)

Statutes/Other Implemented: ORS 285C.506, 316.778 & 317.391