Current through Register Vol. 63, No. 9, September 1, 2024
(1) General Information.
(a) A credit is available to taxpayers who
construct, install, or rehabilitate housing for agricultural workers and their
immediate families.
(b) The credit
is available for agriculture workforce housing projects that are physically
begun on or after January 1, 1990.
(c) Depreciation and amortization expenses
associated with the agriculture workforce housing project are not decreased by
the amount of the tax credit allowed.
(d) The taxpayer's adjusted basis in the
housing project is not decreased by any tax credits allowed.
(e) For tax years beginning on or after
January 1, 2004, ORS 315.167 provides that the owner
or operator of agriculture workforce housing or a contributor as described in
ORS 315.163(6) must
apply to the Oregon Housing and Community Services Department (OHCSD) for a
letter of credit approval no later than six months after beginning an
agriculture workforce housing project.
(2) Qualifications for the Tax Credit.
(a) The agriculture workforce housing project
must be located in Oregon to qualify for the credit.
(b) The housing project must be limited to
occupancy by agricultural workers during the tax year in order to qualify for
the credit. If the housing is occupied at any time during the year by persons
other than agricultural workers and their immediate families, the housing will
not qualify for the credit. Nor can the housing be used for any other function
except housing for agricultural workers.
(c) The taxpayer claiming the credit must:
(A) Obtain a letter of credit approval from
the OHCSD; and
(B) Certify on an
annual basis that any units that were occupied during the tax year were
occupied only by agricultural workers or their immediate families. The letter
of credit approval and the certification must be maintained in the taxpayer's
records and made available to the department on request.
(d) The OHCSD administers the application and
eligibility process for this credit. See chapter 813, divisions 41 and 42 of
the Oregon Administrative Rules, and contact OHCSD for more
information.
(3)
Computation of the Tax Credit For Projects Completed in Tax Years Beginning On
or After January 1, 2002
(a) The credit is
equal to 50 percent of the costs directly associated with the construction or
rehabilitation of the agriculture workforce housing project including costs for
financing, construction, excavation, installation, and permits. Construction
includes acquisition of new or used prefabricated or manufactured housing.
Acquisition costs of land and existing improvements on that land used for the
project are not included in the computation.
(b) The credit first may be claimed in the
year the project is completed or in any of the nine succeeding tax years. No
more than 20 percent of the total credit may be claimed in any one tax year.
The housing is not required to be occupied prior to the end of the tax year in
which the project is completed in order for the credit to be claimed.
(c) Tax credits not used in a tax year may be
carried forward for up to nine years. Any credit carried forward is used first,
before the allowable current year credit.
(d) Costs of rehabilitation include capital
expenditures only. The allowable costs are those incurred for additions or
improvements to property (or related facilities) with a useful life of five
years or more. Rehabilitation costs do not include the cost of acquiring the
building or an interest in the building.
(4) Computation of the Tax Credit for
Projects Completed in Tax Years Beginning before January 1, 2002. The credit is
equal to 30 percent of costs described in subsection (3)(a) if completed after
December 31, 1995, and 50 percent if completed before December 31, 1995. The
credit is claimed in equal installments over a consecutive five-year period
beginning in the year the agriculture workforce housing project is completed.
The credits may be carried forward for up to five years. Otherwise, the
computation of the credit is the same as specified in section (3) of this
rule.
(5) Disallowance and
Forfeiture of Tax Credit. The tax credit will be disallowed and any prior
years' credits forfeited in the case of:
(a)
Fraud or misrepresentation by the taxpayer to obtain the credit.
(b) A taxpayer who is an owner or operator
who fails to substantially comply with occupational health and safety rules,
regulations, or standards. The Department of Consumer and Business Services
will notify the department of any agriculture workforce housing project failing
to substantially comply with these standards.
(c) A taxpayer who is an owner or operator
who fails to obtain required registration as an agriculture workforce camp with
the Department of Consumer and Business Services.
(d) A taxpayer who is an owner or operator of
an agriculture workforce housing project that is not operated by a person who
holds a valid endorsement as a farmworker camp operator, if required under ORS
658.730.
(6) Sale of Agriculture Workforce Housing
Project. If the agriculture workforce housing project is sold, the original
investor may continue to claim the tax credit, provided all other provisions
are met.
Example: LeRay began construction of an
agriculture workforce housing project on his property on July 1, 2016. The
project was completed on December 15, 2016, and on that date complied with the
applicable health and safety standards. The housing was registered with the
Department of Consumer and Business Services, and LeRay obtained endorsement as
a farm camp operator. LeRay must claim the credit on his 2016 return, even
though no units are occupied until 2017. If LeRay sells the property, he may
continue to claim the credit only by obtaining a statement from the new owner
of the property, certifying that any occupied units are occupied only by
agricultural workers and their immediate families. Upon audit or examination,
LeRay must provide a statement for each year in which the credit is claimed if
requested by the department.
(7) Transfers of the credit must comply with
ORS 315.056 and OAR
150-315-0005.
Publications:
Contact the Oregon
Department of Revenue for information about how to obtain a copy of the
publication referred to or incorporated by reference in this rule pursuant to
ORS 183.360(2) and
ORS 183.355(1)(b).
Statutory/Other Authority: ORS
305.100 &
315.169
Statutes/Other Implemented: ORS
315.164 &
315.169
