Oregon Revised Statutes

Or. Rev. Stat. § 314.712 (2026)

Partnerships not subject to income tax; exceptions

✓ current as of May 2026
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      314.712 Partnerships not subject to income tax; exceptions. (1) Except as provided in ORS 314.722 or 314.731 to 314.737, a partnership as such is not subject to the tax imposed by ORS chapter 316, 317 or 318. Partnership income shall be computed pursuant to section 703 of the Internal Revenue Code, with the modifications, additions and subtractions provided in this chapter and ORS chapter 316. Persons carrying on business as partners are liable for the tax imposed by ORS chapter 316, 317 or 318 on their distributive shares of partnership income only in their separate or individual capacities.

      (2) If a partner engages in a transaction with a partnership other than in the partner’s capacity as a member of the partnership, the transaction shall be treated in the manner described in section 707 of the Internal Revenue Code. [1989 c.625 §28 (enacted in lieu of 316.342); 1999 c.90 §5; 2019 c.132 §7]

Notes of Decisions
Cited in 8 cases (1 in the last 5 years), 1994–2026 · leading case: Cook v. Dept. of Rev., 23 Or. Tax 107 (Or. T.C. 2018).
Cook v. Dept. of Rev., 23 Or. Tax 107 (Or. T.C. 2018). · cites it 2× “Taxpayer argues that the statutes on taxation of PTEs and nonresident owners in ORS 314.712 to 314.727, ORS 314.775 to 314.”
Criv Investments, Inc. v. Dep't of Revenue, 14 Or. Tax 181 (Or. T.C. 1997). · cites it 3× “ORS 314.712 provides that “partners” are subject to the tax imposed by ORS chapter 318.”
Reeve v. Dep't of Revenue, 15 Or. Tax 148 (Or. T.C. 2000). · cites it 8× “ORS 314.712 aligns the taxation of partnerships for Oregon income tax purposes with federal income tax law.”
Pratt & Larsen Tile v. Dep't of Revenue, 13 Or. Tax 270 (Or. T.C. 1995). · cites it 2× “ORS 314.712. The items of income, gain, loss, or deduction, passed through retain the same character for taxation to the partners.”
Reeve v. Dep't of Revenue, 37 P.3d 981 (Or. 2001). · cites it 10× “Taxpayers contend that such legislative intent is evident in the text of ORS 314.712(2): “If a partner engages in a transaction with a partnership other than in the partner’s capacity as a member of the partnership, the transaction shall be treated in the manner described in…”
Woolum v. Dept. of Rev. (Or. T.C. 2026). “See ORS 314.712. As a result, those taxes became subject to the SALT cap, reducing the federal deductibility of state income taxes for many business owners.”
Olejko v. Dep't of Revenue, 14 Or. Tax 232 (Or. T.C. 1997). · cites it 2× “ORS 314.712. 1 The character of a partner’s income is the same for state purposes as for federal purposes.”
MRI Diagnostic Servs. Co. v. Dep't of Revenue, 13 Or. Tax 80 (Or. T.C. 1994). “342 (later renumbered ORS 314.712) by reference. That statute provides: “A partnership as such is not subject to the tax imposed by this chapter.”
— Or. Rev. Stat. § 314.712(1) — 2 cases
Criv Investments, Inc. v. Dep't of Revenue, 14 Or. Tax 181 (Or. T.C. 1997). “ORS 314.712 provides that “partners” are subject to the tax imposed by ORS chapter 318.”
Reeve v. Dep't of Revenue, 15 Or. Tax 148 (Or. T.C. 2000). “ORS 314.712 aligns the taxation of partnerships for Oregon income tax purposes with federal income tax law.”
— Or. Rev. Stat. § 314.712(2) — 4 cases
Reeve v. Dep't of Revenue, 15 Or. Tax 148 (Or. T.C. 2000). “ORS 314.712 aligns the taxation of partnerships for Oregon income tax purposes with federal income tax law.”
Reeve v. Dep't of Revenue, 37 P.3d 981 (Or. 2001). “Taxpayers contend that such legislative intent is evident in the text of ORS 314.712(2): “If a partner engages in a transaction with a partnership other than in the partner’s capacity as a member of the partnership, the transaction shall be treated in the manner described in…”
Pratt & Larsen Tile v. Dep't of Revenue, 13 Or. Tax 270 (Or. T.C. 1995). “ORS 314.712. The items of income, gain, loss, or deduction, passed through retain the same character for taxation to the partners.”
Olejko v. Dep't of Revenue, 14 Or. Tax 232 (Or. T.C. 1997). “ORS 314.712. 1 The character of a partner’s income is the same for state purposes as for federal purposes.”
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