Oregon Advisory Opinions September 18, 1974: OAG 74-80 (September 18, 1974)

OAG 74-80.

ORS 316.012 provides in part as follows:

"Any term used in this chapter has the same meaning as when used in a comparable text in the laws of the United States relating to federal income taxes, unless a different meaning is clearly required or the term is specifically defined in this chapter. . . ."

Internal Revenue Code, § 41(c) defines "political contributions" as follows:

"(1) POLITICAL CONTRIBUTIONS. -- The term 'political contribution' means a contribution or gift of money to -- [enumeration of individuals, committees, associations or organizations follows]" (Emphasis supplied)

ORS 316.102 provides as follows:

"(1) Unless a taxpayer has claimed a deduction for a political contribution on his federal tax return for the taxable year, a credit against taxes shall be allowed for contributions made in the taxable year to political parties or to or for the use of a candidate for federal, state or local elective office whose name is listed on a primary, general or special election ballot in this state. A like credit shall be allowed for contributions made to committees and associations organized in support of or in opposition to ballot measures or questions. . . ."

ORS 260.005(2) provides as follows:

" 'Contribute' or 'contribution' includes the payment, unrepaid loan, gift, forgiving of indebtedness, or furnishing without equivalent compensation or consideration, of money, services other than personal services for which no compensation is asked or given, supplies, equipment or any other thing of value, to or on behalf of a candidate, political committee or measure; and any unfulfilled pledge, subscription, agreement or promise, whether or not legally enforceable, to make a contribution. In case of any contribution made for compensation or consideration of less than equivalent value, measured if possible by fair market value, only the excess value thereof shall be considered a contribution. 'Contribution' does not include payment on behalf of or to a candidate of filing fees, fees for space in the voters' pamphlet or payment for or furnishing of personal transportation for a candidate and a candidate's spouse."

Under the laws relating to the regulation of election campaign finances found in ORS ch 260, contributions can be made in many forms. Treasurers of campaign funds for various candidates and committees have asked if, for purposes of taking the contribution deduction or credit on the state and federal income tax returns, receipts should be issued for all types of contributions listed in ORS ch 260 or just for some of them.

The re-enactment of ORS ch 316 as the Personal Income Tax Act of 1969 states a policy in ORS 316.007 that it is the intent

of the Legislative Assembly by the adoption of chapter 316 to make the Oregon personal income tax law identical in effect to the provisions of the federal Internal Revenue Code of 1954 relating to the measurement of taxable income of individuals, estates and trusts, modified as necessary by the state's jurisdiction to tax and the revenue needs of the state. To achieve this result the legislature adopted as the beginning point for measuring Oregon taxable income the taxable income as shown on the federal income tax return for the same period with certain modifications. ORS 316.062.

To further this intent, the legislature has provided that the terms in ORS ch 316 should have the same meaning when used in ch 316 as when used in a comparable context of the laws of the United States relating to federal income taxes. See the sentence from ORS 316.012 quoted above.

The amendment to ORS 316.102 made by Oregon Laws 1973, ch 119, § 3 was intended to provide for a credit for political contributions very similar to that contained in the federal statutes. As quoted above, the section provides the amount of the credit which is available unless the taxpayer has claimed the deduction for political contributions on his federal return for the taxable year. However, nowhere in ORS 316.102 or elsewhere in ORS ch 316 is the term "political contributions" defined. Therefore, following the mandate in ORS 316.012, one should define the term "political contribution" in the same manner as it is used in the federal law. As quoted above from IRC 41(c)(1) "political contributions" means a contribution or gift of money. It is only by defining contributions in this manner will harmony be maintained between the state and federal laws.

The distinction between the definition contained in IRC 41(c)(1) and the definition contained in ORS 260.005(2) can be quite easily justified. The definition contained in ORS ch 260 is one used to require reporting to the election authorities regardless of the form of all contributions to a political candidate, party or committee. The purpose is to make certain that the contributions which have been made do not exceed the statutory limits. On the other hand, the purpose of the credit provided by ORS 316.102 is to give some income tax reduction for contributions made by persons to political parties and candidates. For administrative purposes and to harmonize the Oregon statutes with the federal statutes, it is very logical that a different definition of "political contributions" be used in the tax statute than is used in the general reporting of political contributions.

The overriding rule of statutory construction is that it is the duty of a court to ascertain the intention of the legislature. Terney v. Melton , 239 Or 101, 104, 396 P2d 557 (1964). The task of this office is the same, to ascertain the intention of the legislature. In order to carry out legislative intent as enunciated in ORS ch 316, it is necessary to apply to the term "political contributions" in the Oregon income tax statutes the same definition as used in IRC 41(c)(1) and not the definition contained in ORS 260.005(2). Therefore, the credit for political contributions refers to a contribution or gift of money only, and not of property or services.