OAR 150-317-0100: Periods of Less than 12 Months Are Tax Years

(1) Under Oregon’s tie to federal accounting periods, an Oregon return shall cover the same period as the corresponding federal return. See also OAR 150-314-0005. (2) Internal Revenue Code Regulation 1.1502-76 provides that any period of less than 12 months for which either a separate return or a consolidated return is filed shall be considered as a separate taxable year. Example: Corporation X and its federal consolidated subsidiaries have a fiscal year end of June 30. On January 31, 1989, Corporation X sold Corporation Y (one of its 100 percent owned subsidiaries included in its consolidated returns) to Corporation Z. Corporation Z has a fiscal year ending May 31, 1988 and Corporation Y is required to change its tax year to be the same. Corporation Y must file two short-period returns for federal and Oregon tax purposes (one for July 1, 1988, through January 31, 1989, and another for February 1 through May 31, 1989). Each short-period return shall count as a tax year for purposes of net operating loss and tax credit carryovers. If Corporation Y was not unitary with Corporation X or Corporation Z, it shall file separate Oregon returns for the two periods. For tax years beginning before January 1, 1986, Corporation Y was allowed by the department to file one Oregon return with the two short-period federal returns attached. [Publications: Publications referenced are available from the agency.]