Oregon Statutes 118.145 – Natural resource property exempted
(1) As used in this section:
Terms Used In Oregon Statutes 118.145
- Decedent: A deceased person.
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
- Person: includes individuals, corporations, associations, firms, partnerships, limited liability companies and joint stock companies. See Oregon Statutes 174.100
(a) ‘Family member’ means a person within the third degree of relation, by blood, marriage, adoption, civil union or domestic partnership, to another person.
(b) ‘Materially participate’ means to engage in the active management, as defined in section 2032A of the Internal Revenue Code, of a farm business, forestry business or fishing business owned by the decedent on the date of the decedent’s death. The Department of Revenue may adopt rules to administer this section consistent with this definition.
(c) ‘Natural resource property’ has the meaning given that term in ORS § 118.140.
(2) An interest in natural resource property is exempt from the tax imposed under this chapter if:
(a) The property is held by a decedent for at least five years before the death of the decedent;
(b) During at least 75 percent of the days of each of the five calendar years immediately prior to date of the decedent’s death, the decedent or any family member of the decedent materially participates in the farm business, forestry business or fishing business;
(c) The interest is transferred, as a consequence of the decedent’s death, to one or more family members of the decedent and is subsequently owned by family members of the decedent for at least five consecutive calendar years beginning with the calendar year immediately following the date of the decedent’s death; and
(d) During at least 75 percent of the days of each of the five calendar years immediately following the date of the decedent’s death, any family member of the decedent materially participates in the farm business, forestry business or fishing business.
(3) An additional tax under ORS § 118.005 to 118.540 shall be imposed if:
(a) The natural resource property for which an exemption is allowed under this section is, during the five calendar years following the date of the decedent’s death, subsequently sold or otherwise transferred to a person other than a family member of the decedent; or
(b) The material participation requirement of subsection (2)(d) of this section is not met.
(4) The additional liability imposed under subsection (3) of this section shall be the amount of additional tax that would have been imposed had the transferred property been included in the decedent’s taxable estate. Upon receiving notice of a subsequent sale or other transfer of property for which an exemption has been claimed, or upon receiving notice that the material participation requirement of subsection (2)(d) of this section has not been met, the department shall immediately proceed to collect the additional tax.
(5) An estate claiming the exemption under this section may not claim the credit allowed under ORS § 118.140.
(6) The exemption allowed under this section may not exceed $15 million for the estate. [2023 c.286 § 2]
118.145 was added to and made a part of ORS Chapter 118 by legislative action but was not added to any smaller series therein. See Preface to Oregon Revised Statutes for further explanation.
[Formerly 118.640; 1971 c.652 § 2; 1973 c.498 § 1; 1975 c.762 § 4; 1977 c.666 § 11; 1985 c.761 § 1; repealed by 1997 c.99 § 24]