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Oregon Revised Statutes

Or. Rev. Stat. § 316.680 (2026)

Modification of taxable income

✓ current as of May 2026
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      316.680 Modification of taxable income. (1) There shall be subtracted from federal taxable income:

      (a) The interest or dividends on obligations of the United States and its territories and possessions or of any authority, commission or instrumentality of the United States to the extent includable in gross income for federal income tax purposes but exempt from state income taxes under the laws of the United States. However, the amount subtracted under this paragraph shall be reduced by any interest on indebtedness incurred to carry the obligations or securities described in this paragraph, and by any expenses incurred in the production of interest or dividend income described in this paragraph to the extent that such expenses, including amortizable bond premiums, are deductible in determining federal taxable income.

      (b) The amount of any federal income taxes accrued by the taxpayer during the taxable year as described in ORS 316.685, less the amount of any refunds of federal taxes previously accrued for which a tax benefit was received.

      (c) Amounts allowable under sections 2621(a)(2) and 2622(b) of the Internal Revenue Code to the extent that the taxpayer does not elect under section 642(g) of the Internal Revenue Code to reduce federal taxable income by those amounts.

      (d) Any supplemental payments made to JOBS Plus Program participants under ORS 411.892.

      (e)(A) Federal pension income that is attributable to federal employment occurring before October 1, 1991. Federal pension income that is attributable to federal employment occurring before October 1, 1991, shall be determined by multiplying the total amount of federal pension income for the tax year by the ratio of the number of months of federal creditable service occurring before October 1, 1991, over the total number of months of federal creditable service.

      (B) The subtraction allowed under this paragraph applies only to federal pension income received at a time when:

      (i) Benefit increases provided under chapter 569, Oregon Laws 1995, are in effect; or

      (ii) Public Employees Retirement System benefits received for service prior to October 1, 1991, are exempt from state income tax.

      (C) As used in this paragraph:

      (i) “Federal creditable service” means those periods of time for which a federal employee earned a federal pension.

      (ii) “Federal pension” means any form of retirement allowance provided by the federal government, its agencies or its instrumentalities to retirees of the federal government or their beneficiaries.

      (f) Any amount included in federal taxable income for the tax year that is attributable to the conversion of a regular individual retirement account into a Roth individual retirement account described in section 408A of the Internal Revenue Code, to the extent that:

      (A) The amount was subject to the income tax of another state or the District of Columbia in a prior tax year; and

      (B) The taxpayer was a resident of the other state or the District of Columbia for that prior tax year.

      (g) Any amounts awarded to the taxpayer by the Public Safety Memorial Fund Board under ORS 243.954 to 243.974 to the extent that the taxpayer has not taken the amount as a deduction in determining the taxpayer’s federal taxable income for the tax year.

      (h) If included in taxable income for federal tax purposes, the amount withdrawn during the tax year in qualified withdrawals from a savings network account for higher education established under ORS 178.300 to 178.360.

      (i) Any federal deduction that the taxpayer would have been allowed for the production, processing or sale of marijuana items authorized under ORS 475C.005 to 475C.525 or 475C.770 to 475C.919 but for section 280E of the Internal Revenue Code.

      (j) Any federal deduction that the taxpayer would have been allowed for the manufacturing or sale of psilocybin products or the provision of psilocybin services authorized under ORS 475A.210 to 475A.722 but for section 280E of the Internal Revenue Code.

      (k) If included in taxable income for federal tax purposes, any distributions from an ABLE account that do not exceed the qualified disability expenses of the designated beneficiary as provided in ORS 178.375 and 178.380 and rules adopted by the Oregon 529 Savings Board.

      (2) There shall be added to federal taxable income:

      (a) Interest or dividends, exempt from federal income tax, on obligations or securities of any foreign state or of a political subdivision or authority of any foreign state. However, the amount added under this paragraph shall be reduced by any interest on indebtedness incurred to carry the obligations or securities described in this paragraph and by any expenses incurred in the production of interest or dividend income described in this paragraph.

      (b) Interest or dividends on obligations of any authority, commission, instrumentality and territorial possession of the United States that by the laws of the United States are exempt from federal income tax but not from state income taxes. However, the amount added under this paragraph shall be reduced by any interest on indebtedness incurred to carry the obligations or securities described in this paragraph and by any expenses incurred in the production of interest or dividend income described in this paragraph.

      (c) The amount of any federal estate taxes allocable to income in respect of a decedent not taxable by Oregon.

      (d) The amount of any allowance for depletion in excess of the taxpayer’s adjusted basis in the property depleted, deducted on the taxpayer’s federal income tax return for the taxable year, pursuant to sections 613, 613A, 614, 616 and 617 of the Internal Revenue Code.

      (e) For taxable years beginning on or after January 1, 1985, the dollar amount deducted under section 151 of the Internal Revenue Code for personal exemptions for the taxable year.

      (f) The amount taken as a deduction on the taxpayer’s federal return for unused qualified business credits under section 196 of the Internal Revenue Code.

      (g) The amount of any increased benefits paid to a taxpayer under chapter 569, Oregon Laws 1995, under the provisions of chapter 796, Oregon Laws 1991, and under section 26, chapter 815, Oregon Laws 1991, that is not includable in the taxpayer’s federal taxable income under the Internal Revenue Code.

      (h) The amount of any long term care insurance premiums paid or incurred by the taxpayer during the tax year if:

      (A) The amount is taken into account as a deduction on the taxpayer’s federal return for the tax year; and

      (B) The taxpayer claims the credit allowed under ORS 315.610 for the tax year.

      (i) Any amount taken as a deduction under section 1341 of the Internal Revenue Code in computing federal taxable income for the tax year, if the taxpayer has claimed a credit for claim of right income repayment adjustment under ORS 315.068.

      (j) If the taxpayer makes a nonqualified withdrawal, as defined in ORS 178.300, from a savings network account for higher education established under ORS 178.300 to 178.360, the amount of the withdrawal that is attributable to contributions that were subtracted from federal taxable income under ORS 316.699.

      (k) If a taxpayer makes a withdrawal from a savings network account for higher education established under ORS 178.300 to 178.360 to pay expenses in connection with enrollment or attendance at an elementary or secondary school, the amount of the withdrawal that is attributable to contributions that were subtracted from federal taxable income under ORS 316.699 and the amount of the withdrawal that is attributable to previously untaxed earnings and gains.

      (L) If the taxpayer makes a distribution from an ABLE account that is not a qualified disability expense of the designated beneficiary as provided in ORS 178.375 and 178.380 and rules adopted by the Oregon 529 Savings Board, the amount of the distribution that is attributable to contributions that were subtracted from federal taxable income under ORS 316.699.

      (3) Discount and gain or loss on retirement or disposition of obligations described under subsection (2)(a) of this section issued on or after January 1, 1985, shall be treated for purposes of this chapter in the same manner as under sections 1271 to 1283 and other pertinent sections of the Internal Revenue Code as if the obligations, although issued by a foreign state or a political subdivision of a foreign state, were not tax exempt under the Internal Revenue Code. [Formerly 316.067; 1985 c.345 §7; 1985 c.802 §11; 1987 c.293 §23; 1987 c.647 §13; 1991 c.457 §7b; 1991 c.823 §3; 1995 c.556 §8; 1995 c.561 §17; 1995 c.746 §59; 1995 c.816 §32; 1997 c.99 §18; 1999 c.90 §22; 1999 c.403 §1; 1999 c.746 §12; 1999 c.981 §16; 1999 c.1005 §3; 1999 c.1007 §3; 2001 c.13 §1; 2001 c.212 §1; 2001 c.509 §18; 2003 c.280 §3; 2007 c.843 §§1,2,2a; 2009 c.202 §§1,2; 2013 c.194 §3; 2015 c.1 §74; 2015 c.699 §§20,21; 2015 c.843 §§3,4; 2016 c.91 §§8,9; 2018 c.57 §2; 2021 c.1 §131]

Notes of Decisions
Cited in 26 cases (5 in the last 5 years), 1985–2026 · leading case: Dept. of Rev. v. Wakefield, 25 Or. Tax 1 (Or. T.C. 2022).
Sort: Relevance Newest Treatment
Dept. of Rev. v. Wakefield, 25 Or. Tax 1 (Or. T.C. 2022). · cites it 46× “Taxpayer claimed that Measure 91, allowing recreational use of marijuana, disconnected Section 280E for personal income taxpayers for tax year 2015 as codified in ORS 316.680. The court, after examining the text, context, and legislative history of multiple bills during the 2015…”
Hughes v. State of Oregon, 838 P.2d 1018 (Or. 1992). · cites it 12× “Oregon Laws 1991, chapter 823, section 3(d), provides for repeal from ORS 316.680 of the following language that, previously, had confirmed the tax exemption in ORS 237.”
Dep't of Revenue of Kentucky v. Davis, 553 U.S. 328 (2008). · cites it 2× “2007); Ore. Rev.Stat. § 316.680(2)(a) (2003); Pa.”
Davis v. Michigan Dep't of the Treasury, 489 U.S. 803 (1989). · cites it 2× “1988) (amounts received from retirement and pension funds established for firemen and law enforcement officers exempt in their entirety, but amounts received from federal-employee-retirement program exempt only up to $4000); Ore. Rev. Stat. §§ 316.680(1)(c) and (d) (1987)…”
Ragsdale v. Dep't of Revenue, 895 P.2d 1348 (Or. 1995). · cites it 5× “At all times relevant to this appeal, retired public employees of the State of Oregon and of its political subdivisions and instrumentalities have received retirement benefits attributable to their employment under the Public Employes' Retirement System (PERS). [2] See ORS…”
Ragsdale v. Dep't of Revenue, 823 P.2d 971 (Or. 1992). · cites it 3× “Oregon’s tax laws completely exempted state government retirement payments from taxation from 1970 through 1988 but provided only a limited exemption for retirement payments received by federal retirees.”
Hackman v. Dir. of Revenue, 771 S.W.2d 77 (Mo. 1989). · cites it 2× “§§ 105-141 (b)(13) and (14) (1985); Ore.Rev.Stat. §§ 316.680(1)(c) and (d) (1987); S.”
Hand v. Roberts, 788 P.2d 446 (Or. 1990). · cites it 2× “The amendments to ORS 316.680(1) (d) and ORS 237.201 which HB 3508 will accomplish, if the voters approve, repeal an exemption and modify a subtraction from taxable income which apply, on the face of the statutes, only to PERS payments of some nature.”
Nutbrown v. Munn, 811 P.2d 131 (Or. 1991). “The taxation of income from federal retirement programs is governed by ORS 316.680(l)(c), which provides for deduction of certain of that income from the figure for “federal taxable income” on a taxpayer’s Oregon income tax return: “(1) There shall be subtracted from federal…”
Pendell v. Dep't of Revenue, 847 P.2d 846 (Or. 1993). · cites it 2× “1 The 1989 legislature attempted to amend ORS 316.680 to eliminate the tax exemption for state retirees.”
Gleason v. Michlitsch, 728 P.2d 965 (Or. Ct. App. 1986). “” ORS 316.680(2)(g) provides that, for tax years beginning January 1, 1985, the amount deducted under IRC § 151 for personal exemptions shall be added to federal taxable income in computing Oregon taxable income.”
Stovall v. State of Oregon, 922 P.2d 646 (Or. 1996). “201 (1989); former ORS 316.680(l)(d) (1989). In 1991, to comply with Davis , the legislature decided to subject PERS benefits to taxation, rather than to exempt federal benefits from taxation.”
Show all 26 citing cases →
— Or. Rev. Stat. § 316.680(1) — 1 case
Hand v. Roberts, 788 P.2d 446 (Or. 1990). “The amendments to ORS 316.680(1) (d) and ORS 237.201 which HB 3508 will accomplish, if the voters approve, repeal an exemption and modify a subtraction from taxable income which apply, on the face of the statutes, only to PERS payments of some nature.”
— Or. Rev. Stat. § 316.680(1)(a) — 2 cases
Deras v. Dept. of Rev. (Or. T.C. 2026).
Engel v. Dep't of Revenue (Or. T.C. 2012).
— Or. Rev. Stat. § 316.680(1)(b) — 1 case
Deras v. Dept. of Rev. (Or. T.C. 2026).
— Or. Rev. Stat. § 316.680(1)(c) — 6 cases
Davis v. Michigan Dep't of the Treasury, 489 U.S. 803 (1989). “1988) (amounts received from retirement and pension funds established for firemen and law enforcement officers exempt in their entirety, but amounts received from federal-employee-retirement program exempt only up to $4000); Ore. Rev. Stat. §§ 316.680(1)(c) and (d) (1987)…”
Hackman v. Dir. of Revenue, 771 S.W.2d 77 (Mo. 1989). “§§ 105-141 (b)(13) and (14) (1985); Ore.Rev.Stat. §§ 316.680(1)(c) and (d) (1987); S.”
Simpson v. Dep't of Revenue, 12 Or. Tax 455 (Or. T.C. 1993).
Deras v. Dept. of Rev. (Or. T.C. 2026).
Pendell v. Dep't of Revenue, 12 Or. Tax 204 (Or. T.C. 1992).
— Or. Rev. Stat. § 316.680(1)(d) — 2 cases
Hughes v. State of Oregon, 838 P.2d 1018 (Or. 1992). “Oregon Laws 1991, chapter 823, section 3(d), provides for repeal from ORS 316.680 of the following language that, previously, had confirmed the tax exemption in ORS 237.”
Ragsdale v. Dep't of Revenue, 895 P.2d 1348 (Or. 1995). “At all times relevant to this appeal, retired public employees of the State of Oregon and of its political subdivisions and instrumentalities have received retirement benefits attributable to their employment under the Public Employes' Retirement System (PERS). [2] See ORS…”
— Or. Rev. Stat. § 316.680(1)(i) — 1 case
Lessey v. Dept. of Rev. (Or. T.C. 2022).
— Or. Rev. Stat. § 316.680(1)(i)(2017) — 1 case
Lessey v. Dept. of Rev. (Or. T.C. 2022).
— Or. Rev. Stat. § 316.680(2)(a) — 1 case
Dep't of Revenue of Kentucky v. Davis, 553 U.S. 328 (2008). “2007); Ore. Rev.Stat. § 316.680(2)(a) (2003); Pa.”
— Or. Rev. Stat. § 316.680(2)(g) — 1 case
Gleason v. Michlitsch, 728 P.2d 965 (Or. Ct. App. 1986). “” ORS 316.680(2)(g) provides that, for tax years beginning January 1, 1985, the amount deducted under IRC § 151 for personal exemptions shall be added to federal taxable income in computing Oregon taxable income.”
— Or. Rev. Stat. § 316.680(l)(c) — 5 cases
Davis v. Michigan Dep't of the Treasury, 489 U.S. 803 (1989). “1988) (amounts received from retirement and pension funds established for firemen and law enforcement officers exempt in their entirety, but amounts received from federal-employee-retirement program exempt only up to $4000); Ore. Rev. Stat. §§ 316.680(1)(c) and (d) (1987)…”
Ragsdale v. Dep't of Revenue, 823 P.2d 971 (Or. 1992). “Oregon’s tax laws completely exempted state government retirement payments from taxation from 1970 through 1988 but provided only a limited exemption for retirement payments received by federal retirees.”
Nutbrown v. Munn, 811 P.2d 131 (Or. 1991). “The taxation of income from federal retirement programs is governed by ORS 316.680(l)(c), which provides for deduction of certain of that income from the figure for “federal taxable income” on a taxpayer’s Oregon income tax return: “(1) There shall be subtracted from federal…”
Hackman v. Dir. of Revenue, 771 S.W.2d 77 (Mo. 1989). “§§ 105-141 (b)(13) and (14) (1985); Ore.Rev.Stat. §§ 316.680(1)(c) and (d) (1987); S.”
Pendell v. Dep't of Revenue, 847 P.2d 846 (Or. 1993). “1 The 1989 legislature attempted to amend ORS 316.680 to eliminate the tax exemption for state retirees.”
— Or. Rev. Stat. § 316.680(l)(d) — 4 cases
Hughes v. State of Oregon, 838 P.2d 1018 (Or. 1992). “Oregon Laws 1991, chapter 823, section 3(d), provides for repeal from ORS 316.680 of the following language that, previously, had confirmed the tax exemption in ORS 237.”
Ragsdale v. Dep't of Revenue, 895 P.2d 1348 (Or. 1995). “At all times relevant to this appeal, retired public employees of the State of Oregon and of its political subdivisions and instrumentalities have received retirement benefits attributable to their employment under the Public Employes' Retirement System (PERS). [2] See ORS…”
Hand v. Roberts, 788 P.2d 446 (Or. 1990). “The amendments to ORS 316.680(1) (d) and ORS 237.201 which HB 3508 will accomplish, if the voters approve, repeal an exemption and modify a subtraction from taxable income which apply, on the face of the statutes, only to PERS payments of some nature.”
Stovall v. State of Oregon, 922 P.2d 646 (Or. 1996). “201 (1989); former ORS 316.680(l)(d) (1989). In 1991, to comply with Davis , the legislature decided to subject PERS benefits to taxation, rather than to exempt federal benefits from taxation.”
— Or. Rev. Stat. § 316.680(l)(e) — 1 case
Atkins v. Dep't of Revenue, 894 P.2d 449 (Or. 1995).
Annotations are extracted automatically from the opinions in the Syfert caselaw corpus and ranked by authority, recency, and treatment. Dots show Syfertize treatment of the citing case itself.