(1)(a) A pass-through entity having distributive income attributable to Oregon sources shall file a composite return of personal income and corporate income and excise tax on behalf of owners that elect to be included in the composite return filed by the entity. Distributive income subject to this election does not include the distributive share that under this chapter or ORS Chapter 317 or 318 must be included in the apportionable income of any direct partner that is a corporate partner, as defined in ORS § 314.731, unless the corporate partner states in writing to the partnership that its distributive share of the partnership’s income and expenses is not required to be included in the corporate partner’s apportionable income. For purposes of this paragraph, a corporate partner’s distributive share is presumed to be included in the partner’s own apportionable income unless the partner provides the statement to the partnership representative.

(b) Distributive income subject to this election does not include the distributive share that under this chapter or ORS Chapter 317 or 318 must be included in the apportionable income of an indirect partner that is a corporate partner, as defined in ORS § 314.731, provided that the partnership can reasonably determine this.

(2) A pass-through entity shall file a composite return under this section only if one or more owners that are nonresidents make an election under this section.

(3) The election is irrevocable and shall be made by owners in the time, form and manner prescribed by the Department of Revenue.

(4) The composite return shall report the share of distributive income of each electing owner, the share of distributive income from Oregon sources of each electing owner and any other information required by the department. The composite return shall be filed with the department in the time, form and manner prescribed by the department. The pass-through entity shall file an amended composite return to report adjustments arising from an audit or other action by the Internal Revenue Service or to correct any item reported on the original composite return.

(5)(a) An electing owner may file a nonresident personal income tax return or a corporate excise or income tax return for the tax year of the electing owner in which the electing owner’s share of distributive income reported on the composite return is properly reportable.

(b) An electing owner that files a return under this subsection shall be allowed a subtraction under ORS Chapter 316, 317 or 318 for its share of distributive income reported on the composite return.

(6)(a) A pass-through entity that files a composite return under this section is subject to the administrative provisions of this chapter and ORS Chapter 305.

(b) The department may adopt rules to prevent double taxation or double deduction of any amount included in the computation of income under this section. [2005 c.387 § 2; 2019 c.132 § 9]