In January of 2010, voters in Oregon approved ballot measure 67, which increased the corporate minimum tax from $ 10 to $ 150. Most voters at the time were likely unaware that this would not just apply to for-profit corporations but also applied to HOAs, which are also corporations. Since the approval went into effect with tax year 2009, this left many HOAs unprepared for the massive increase in their tax liability, especially those with fewer homes to share the burden. And, for the past three tax years, HOAs have paid the new corporate minimum.
But there is good news! The Certified Public Accountants (CPAs) that work with HOAs have been asking the state to look into this since its approval and in spring of 2012, the Policy Systems and Estate Unit did. In February of this year, the Oregon Department of Revenue changed its interpretation to allow HOAs to be exempt from the increased corporate minimum tax and issued Oregon Revenue Bulletin 2013-01. For tax years 2012 and beyond, HOAs will no longer need to file Oregon Form 20 (unless the HOA has taxable income) and pay the corporate minimum tax, although HOAs should still file a copy of their federal tax form (Form 1120-H) with the state. Finally, those HOAs that did incorrectly file Form 20 and paid $ 150 in any or all of those tax years (2009, 2010 and/or 2011) can request a refund from the state by submitting an amended return. There is a looming deadline for the 2009 amended forms; they must be filed by April 15, 2013.
All Oregon HOAs must still file federal tax returns (either 1120 or 1120-H), which are due by March 15th of each year (for HOAs that use the calendar year as their fiscal year).
For more information about Oregon Department of Revenue’s decision, refer to the Oregon Revenue Bulletin 2013-01 (https://www.oregon.gov/DOR/forms/FormsPubs/orb201301_800-012.pdf) or contact your HOA’s CPA.