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83rd OREGON LEGISLATIVE ASSEMBLY--2025 Regular Session
House Bill 3811
Sponsored by Representative RUIZ
SUMMARY
The following summary is not prepared by the sponsors of the measure and is not a part of the body thereof subject
to consideration by the Legislative Assembly. It is an editor’s brief statement of the essential features of the
measure as introduced.The statement includes a measure digest written in compliance with applicable readability
standards.
Digest: The Act changes the tax credit for farm work overtime paid. (Flesch Readability Score:
74.8).
Modifies the tax credit allowed for wages paid as overtime pay to agriculture workers. Increases
the percentage of wages allowed as a credit. Allows a taxpayer to receive an advance payment of
credit during the year in which wages are paid. Removes the annual cap on agricultural overtime
credits allowed to all taxpayers in the state.
Applies to tax years beginning on or after January 1, 2026.
Takes effect on the 91st day following adjournment sine die.
A BILL FOR AN ACT
Relating to a tax credit for overtime wages paid to agricultural workers; creating new provisions;
amending ORS 315.133, 315.136 and 653.277; repealing ORS 315.135 and 315.137; and prescribing
an effective date.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 315.133 is amended to read:
315.133. (1) As used in this section and ORS [315.135 and] 315.136:
(a) “Agricultural worker” has the meaning given that term in ORS 653.271.
(b) “Eligible employer” means an employer doing business in 2017 North American Industry
Classification System code 111, crop production, or code 112, animal production and aquaculture.
[(c) “Full-time equivalent employee” means an employee or a combination of employees that perform
at least 2,080 hours of work for an employer in a calendar year.]
(2)(a) A credit against taxes that are otherwise due under ORS chapter 316 or, if the taxpayer
is a corporation, under ORS chapter 317 or 318 is allowed for overtime compensation required under
ORS 653.272 to be paid, for work performed in Oregon, by an eligible employer to agricultural
workers on an hourly basis. The amount of the credit shall [equal a percentage of the actual excess
paid to agricultural workers during the calendar year in which the tax year begins, as determined
under ORS 315.135] be computed by multiplying 1.18 by the total of the excess amounts paid
to agricultural workers in a tax year, as required under ORS 653.272, but may not include
any amount paid by the employer for any hour worked by an agricultural worker in excess
of 60 hours in a week.
(b) A labor contractor licensed under ORS 658.410 may not claim a credit under this section.
An eligible employer may claim a credit under this section for wages paid to workers recruited,
solicited, supplied or employed by a labor contractor on behalf of the eligible employer.
(c) Notwithstanding ORS 317.090 (3), a credit under this section is allowed against the tax im-
posed under ORS 317.090.
(d) A credit is not allowed under this section for any overtime wages paid to an employee who
NOTE:Matter in boldfaced type in an amended section is new; matter [italic and bracketed] is existing law to be omitted.
New sections are in boldfaced type.
LC 4523 HB3811
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is exempt from the provisions of ORS 653.272 as a member of the immediate family of the employer.
(3) Prior to claiming the credit allowed under this section, a taxpayer is required to receive a
notice of acknowledgment from the Department of Revenue, as provided in ORS 315.136, stating the
maximum amount of credit that the taxpayer may claim for the calendar year.
(4) If the amount allowable:
(a) As a credit under this section against taxes imposed under ORS chapter 316, when added to
the sum of the amounts allowable as payment of tax under ORS 316.187 or 316.583, other tax pre-
payment amounts and other refundable credit amounts, exceeds the taxes imposed by ORS chapters
314 and 316 for the tax year after application of any nonrefundable credits allowable for purposes
of ORS chapter 316 for the tax year, the amount of the excess shall be refunded to the taxpayer as
provided in ORS 316.502.
(b) As a credit under this section against taxes imposed under ORS chapter 317 or 318, when
added to the sum of the amount of estimated tax paid under ORS 314.515 and any other tax pre-
payment amounts, exceeds the taxes imposed by ORS chapters 314 and 317 for the tax year (reduced
by any nonrefundable credits allowable for purposes of ORS chapter 317 for the tax year), the
amount of the excess shall be refunded to the taxpayer as provided in ORS 314.415.
(5) Any amount that is refunded to the taxpayer under this section and that is in excess of the
tax liability of the taxpayer does not bear interest.
(6) A nonresident shall be allowed the credit under this section. The credit shall be computed
in the same manner and be subject to the same limitations as the credit granted to a resident.
However, the credit shall be prorated using the proportion provided in ORS 316.117.
(7) If a change in the taxable year of the taxpayer occurs as described in ORS 314.085, or if the
Department of Revenue terminates the taxpayer’s taxable year under ORS 314.440, the credit al-
lowed under this section shall be prorated or computed in a manner consistent with ORS 314.085.
(8) If a change in the status of a taxpayer from resident to nonresident or from nonresident to
resident occurs, the credit allowed under this section shall be determined in a manner consistent
with ORS 316.117.
(9) The Department of Revenue shall adopt rules for the purposes of ORS 315.133 to 315.137,
including policies and procedures for providing notice to taxpayers regarding the credit allowed
under this section as required in ORS 315.136.
SECTION 2. ORS 315.136 is amended to read:
315.136. (1) In order to receive a [notice of acknowledgment from the Department of Revenue in
support of a] tax credit allowed under ORS 315.133, a taxpayer shall submit to the Department of
Revenue an application under this section. The application shall be made in the form and manner
prescribed by the department [and].
(2)(a) If the taxpayer seeks certification for an advance payment during the calendar
year, as provided in section 3 of this 2025 Act, the application must be submitted by the
taxpayer no later than September 1 of that calendar year.
(b) If the taxpayer seeks a notice of acknowledgment, the application must be submitted
by the taxpayer no later than January 31 following the calendar year for which the taxpayer seeks
credit.
[(2)] (3) The taxpayer must include with the application required under this section and section
3 of this 2025 Act the following:
(a) The address and tax identification number of the taxpayer.
(b) A statement by the taxpayer of the overtime hours worked and overtime wages paid, on an
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hourly basis, to agricultural workers employed by the taxpayer and the amount of overtime wages
paid by or on behalf of the taxpayer as compensation to agricultural workers during the calendar
year. The taxpayer shall provide aggregate data as to employees of the taxpayer who received
overtime pay from the taxpayer and those who did not.
(c) The number of the license issued under ORS 658.410 to any labor contractor used to recruit,
solicit, supply or employ workers on behalf of the taxpayer, or other permit or registration numbers
issued to the labor contractor.
(d) If applicable, any license required under ORS 475C.065 or 571.281 or registration required
under ORS 475C.792.
[(e) Any other information required by the department to verify the identity of the taxpayer or the
potential maximum amount of credit allowed to the taxpayer under ORS 315.133.]
[(3) Upon receipt of an application under this section, the department shall immediately allow an
extension, from the next applicable due date, for filing of the taxpayer’s income or corporate excise tax
return.]
[(4) Not later than June 1 of the year in which the application under subsection (1) of this section
is filed, the department shall issue written notice to taxpayers that meet the application requirements
of this section. The notice of acknowledgment shall state the maximum amount of credit for which the
taxpayer is eligible for the tax year. The credit claimed may not exceed the actual amount of excess
paid as overtime wages to agricultural workers during the calendar year by the taxpayer.]
(e) If the taxpayer seeks certification for an advance payment under section 3 of this 2025
Act, the information described in paragraph (b) of this subsection as it relates to overtime
wages paid between January 1 and July 31 of the current calendar year.
(f) Any other information required by the department to verify the identity of the tax-
payer or the potential maximum amount of credit allowed to the taxpayer under ORS 315.133.
(4) Upon receipt of an application for a notice of acknowledgment under subsection (2)(b)
of this section, the department shall immediately allow an extension, from the next applica-
ble due date, for filing of the taxpayer’s income or corporate excise tax return.
(5) Not later than June 1 of the year in which an application under subsection (1) of this
section is filed, the department shall issue written notice to those taxpayers that seek a
notice of acknowledgment and that meet the application requirements of this section. The
notice of acknowledgment shall state the maximum amount of credit for which the taxpayer
is eligible for the tax year.
(6) Not later than October 1 of the year in which an application under subsection (1) of
this section is filed that seeks certification for an advance payment under section 3 of this
2025 Act, the department shall issue a certification to those taxpayers that meet the appli-
cation requirements of this section.The certification shall state the credit amount for which
the taxpayer is eligible for the first seven months of the calendar year.
(7) The credit claimed under ORS 315.133 may not exceed the actual amount of excess
paid as overtime wages to agricultural workers during the calendar year by the taxpayer.
SECTION 3. (1) The Department of Revenue shall establish by rule a program for making
advance payments to taxpayers that qualify for the tax credit allowed under ORS 315.133, as
determined for the first seven months of the calendar year in which the overtime wages are
paid. Payments under this section may be made only to taxpayers confirmed by the depart-
ment to be Oregon residents.
(2) Any taxpayer that receives a certification of advance payment under ORS 315.136 may
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apply for and receive an advance payment. Advance payments under this section shall be
issued by the department not later than November 1.
SECTION 4. (1) The Department of Revenue, in reviewing the tax returns of all taxpayers
that have received advance payments under section 3 of this 2025 Act, shall:
(a) Confirm that, for the tax year during which advance payments were made as provided
under section 3 of this 2025 Act, the taxpayer has claimed a credit under ORS 315.133;
(b) Reconcile the amounts claimed under ORS 315.133 against the amounts disbursed
under section 3 of this 2025 Act and against the taxpayer’s underlying tax liability, if im-
posed;and
(c) Determine whether there is a difference in amounts claimed versus amounts dis-
bursed and assess a deficiency against the taxpayer or provide a refund.
(2) If a taxpayer that has received any advance payments under section 3 of this 2025
Act does not claim a credit under ORS 315.133, or does not provide sufficient substantiation
of eligibility for the claimed amount, the Department of Revenue shall notify the taxpayer
of any overpayment attributable to the advance payments made under section 3 of this 2025
Act.
(3) The Department of Revenue shall discontinue payments under section 3 of this 2025
Act if the department discovers that the taxpayer:
(a) Has ceased to do business in this state;
(b) Has moved out of this state since first receiving payments;
(c) Has changed or is likely to change tax filing status; or
(d) Is not reasonably likely to qualify for the tax credit under ORS 315.133 for the next
upcoming tax year for which advance payments are otherwise to be made.
(4) Except as otherwise provided in this section and ORS 315.133 and section 3 of this 2025
Act or where the context requires otherwise, the provisions of ORS chapters 305 and 314 as
to the audit and examination of returns, periods of limitation, determination of and notices
of deficiencies, assessments, collections, liens, delinquencies, claims for refund and refunds,
conferences, appeals to the Oregon Tax Court, stays of collection pending appeal,
confidentiality of returns and the penalties relative thereto, and the procedures relating
thereto, apply to the determinations of taxes, penalties and interest under this section and
ORS 315.133 and section 3 of this 2025 Act.
SECTION 5. ORS 653.277 is amended to read:
653.277. Following receipt of a report required under ORS 653.274 and submitted to a regular
or interim committee of the Legislative Assembly, the Legislative Assembly shall consider making
adjustments to the structure of the credit allowed under ORS 315.133 [and shall revise the credit rate
amounts provided in ORS 315.135], if deemed appropriate by the Legislative Assembly.
SECTION 6.Sections 3 and 4 of this 2025 Act, the amendments to ORS 315.133 and 315.136
by sections 1 and 2 of this 2025 Act and the repeal of ORS 315.135 and 315.137 by section 7
of this 2025 Act apply to tax years beginning on or after January 1, 2026.
SECTION 7.ORS 315.135 and 315.137 are repealed.
SECTION 8.This 2025 Act takes effect on the 91st day after the date on which the 2025
regular session of the Eighty-third Legislative Assembly adjourns sine die.
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