RE: Proctor & Rulien, PC v. City of Portland
Date: August 21, 2012
In August, 2012, a settlement agreement was entered into by Proctor, Rulien PC and the City of Portland. This brings closure to the legal actions related to this case. Taxpayers can continue to file amended returns for any open tax year (consistent with Interim Administrative Rule 280.12-1). The previously provided guidance for unfiled returns should continue to be followed. In other words, real estate brokers engaging in professional real estate activity only as an agent of a principal broker may file returns without payment of the City of Portland Business License Tax. As stated below, individuals licensed as a principal real estate broker and corporations or tax entities other than individuals are not exempt under ORS 696.365. They will continue to be subject to both the Multnomah County Business Income Tax and the City of Portland Business License Tax.
Date: May 11, 2012
The Revenue Bureau adopted Interim Administrative Rule 280.12-1 (Extension of Time to File Amended Returns Pursuant to the Decision in the Proctor Case).This rule extends the statute for filing amended returns for the City of Portland Business License Taxes paid on the taxable year ending 12/31/2008 until July 31, 2012.
Date: April 23, 2012
The Revenue Bureau will issue guidance soon regarding the process for claiming refunds and the extension of the statute of limitations on the 2008 tax year. The 60 day period for filing amended returns has not started yet. It will be announced when the above guidance is issued.
The case has been remanded back to the Circuit Court. No trial date has been set.
Date: March 13, 2012
On March 8, 2012 the Oregon Supreme Court denied the City of Portland’s Petition for Review of the September 8, 2011 opinion of the Oregon Court of Appeals. The Revenue Bureau is meeting with the City Attorney’s office to determine what the next steps are regarding the Appeals Court remanding the case back to the Circuit Court. After this meeting additional guidance may be provided regarding the adjustment of previously filed returns (amended returns, refund claims, etc.). The guidance previously provided for the 2010 and 2011 tax years regarding the City of Portland portion of the combined tax return should be followed if you are a broker who engages in professional real estate activity only as an agent of a principal real estate broker. Additional information may be provided by the end of March.
Date: November 10, 2011
Today the City of Portland filed with the Oregon Supreme Court a Petition for Review of the September 8, 2011 opinion of the Oregon Court of Appeals. The Oregon Supreme Court will either accept or deny the petition. Once we learn of that decision, we will post continuing guidance.
Date: October 12, 2011
The City of Portland has been granted an extension by the Oregon Supreme Court until November 10, 2011 to file a Petition for Review of the recent opinion of the Oregon Court of Appeals.
The Revenue Bureau is aware that real estate brokers and tax preparers want guidance on filing current returns and on filing amended returns for 2008, 2009 and 2010. The Revenue Bureau has determined the following:
- Current year returns (2010 tax year) may be filed without payment of the City of Portland Business License Tax by real estate brokers engaging in professional real estate activity only as an agent of a principal broker until such time that it may potentially become due. The Revenue Bureau agrees that no penalty will accrue in such cases because of the pending appeal. However, interest may be assessed. This same guidance will apply to the 2011 tax year if the appeal has not been decided by April 15, 2012.
- The Revenue Bureau will extend the statute of limitations for real estate brokers who may have paid tax in 2008, 2009 and 2010. It will not be necessary for real estate brokers to file amended returns for those years at this time. Once a decision is made regarding our petition for review or a decision by the Oregon Supreme Court, the Revenue Bureau will, by written policy, issue specific guidelines regarding what is required in the event a refund is due to the taxpayer. The Bureau will allow a period of time to file of not less than 60 days once a final decision by the court(s) has been made.
The Revenue Bureau will only accept returns without Business License Tax payment from “an individual licensed as a real estate broker who engages in professional real estate activity only as an agent of a principal real estate broker.” (quoted from ORS 696.365). If you are claiming this, you must indicate on the form the name of the principal broker you are an agent for as verification.
Individuals licensed as a principal real estate broker are not exempt under ORS 696.365. Additionally, corporations or tax entities other than individuals are not exempt under this law as the corporation is not the licensee (per ORS 696.020). Prior court cases have established the taxation of a filing entity even though individual or corporate owners of the filing entity are tax exempt.