On June 16, 2023, the Oregon Department of Revenue (DOR) issued two temporary administrative rules pertaining to the issuance of tax-compliance certificates.
OAR 150-305-0304 (the General Rule) is the general tax-compliance certificate rule. The General Rule says the DOR may issue a certificate of tax compliance upon request from a taxpayer. The DOR indicates the issuance of a tax-compliance certificate means the taxpayer is in compliance with all tax or fee programs to which the taxpayer is subject, as of the date of the certificate and to the knowledge of the DOR. In order for the DOR to issue a certificate, the taxpayer must have filed all required returns for the three years preceding the date of the request for the certificate. It requires that the taxpayer (a) has paid in-full all tax and fee assessments, or has a pending “good faith” appeal in the Oregon Tax Court; or (b) is in compliance with a DOR-approved payment plan. The DOR will not issue a certificate unless all of those requirements are satisfied.
DOR modified a rule that previously dealt with tax-compliance certificates for child-caring agencies (OAR 150-418-0010) to refer to the General Rule.
These temporary rules are effective June 15, 2023, to December 12, 2023.
Unclear from these temporary rules is whether the DOR “will” issue the certificates in all cases in which a taxpayer meets the requirements of the General Rule. The General Rule uses the permissive verb “may” in reference to the DOR’s authority to issue these certificates.
In any event, this is a noteworthy change because transaction parties from outside of Oregon routinely request these forms of tax-compliance certificates as a condition to closing a transaction. Although most transaction parties may waive this request upon receiving an explanation that the DOR does not issue these certificates in most (if not all) cases, these temporary rules could pave the way to an environment in which Oregon taxpayers may be able to satisfy requests for these tax-compliance certificates.
This article summarizes aspects of the law and does not constitute legal advice. For legal advice for your situation, you should contact an attorney.