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POL Government Elected Officials Auditor Griffin-Valade Charter, Code & Policies City Code & Charter Online Code & Charter Title 7 Business Licenses Chapter 7.02 Business License Law
7.02.870 Business Retention Credit for Qualifying Investment Management Firms.

(Added by Ordinance No. 183330, effective December 12, 2009.)

 

A.  An Investment Management Firm is entitled to a credit against the total amount of its business license tax due.  The business retention credit is determined by subtracting from the business license tax due the greater of

 

1.  $6,000 times the number of owners, not including limited partners, subject to the Compensation Deductions allowed in Section 7.02.600 or

 

2.  30 percent of the total business license tax otherwise due.  If the resulting difference is a negative number, the amount of the credit will be zero.  Any allowed credit not used in a particular year will not be refunded and will not be carried forward to a succeeding tax year, except as provided in Subsection B.

 

B.  For purposes of this credit, the “first tax year” would be a tax year in which the Investment Management Firm is doing business in the City of Portland and either

 

1.  The Investment Management Firm was not doing business in the City of Portland in the prior tax year or

 

2.  The prior tax year began prior to January 1, 2009.

 

a.  In the first tax year, the credit is limited to 50 percent of the amount calculated in Subsection A. The remaining 50 percent shall be deferred and can only be claimed in the third of three consecutive tax years (in which the Investment Management Firm is doing business in the City of Portland) starting with the first tax year as defined above.

 

b.  In the second consecutive tax year that the Investment Management Firm is doing business in the City of Portland, the credit is limited to 50 percent of the amount calculated in Subsection A. The remaining 50 percent shall be deferred and can only be claimed in the fourth of four consecutive tax years (in which the Investment Management Firm is doing business in the City of Portland) starting with the first tax year as defined above.

 

c.  In the third consecutive tax year that the Investment Management Firm is doing business in the City of Portland, the Investment Management Firm, in addition to the full credit calculated in Subsection A, can claim the 50 percent deferred credit that was calculated in Subsection a. above.

 

d.  In the fourth consecutive tax year that the Investment Management Firm is doing business in the City of Portland, the Investment Management Firm, in addition to the full credit calculated in Subsection A, can claim the 50 percent deferred credit that was calculated in Subsection b. above.

 

C.  “Investment Management Firm” means a taxpayer that satisfies each of the following requirements during the tax year that the credit is sought:

 

1.  At least 90 percent of the firm’s gross income for the tax year must consist of fees that are

 

a.  Received from Diversified Investing Fund or from persons unrelated to the firm, and

 

b.  Determined as a percentage of the value of assets managed by the firm (including payments to the firm from their parties if the payments are credited against or offset such fees in whole or in part).

 

2.  At least 90 percent of the assets managed by the firm must consist of Qualifying Investment Securities.

 

3.  A majority of the voting interests in the firm must be owned by persons who received compensation from the firm that is subject to the Owner’s Compensation Deduction in Section 7.02.600.

 

4.  The firm was physically located within the City of Portland boundaries at the end of the tax year.

 

D.  The terms “Diversified Investing Fund” and “Qualified Investment Securities” have the meanings as defined by Administrative Rule.

 

E.  This credit is available for tax years beginning on or after January 1, 2009.