Oregon Form Tm 230 – Fill Out and Use This PDF

New information

New tax rate: Beginning January 1, 2006, the tax rate has increased to 0.006418.

Important reminders

For tax years beginning on or after July 1, 2005:

•Self-employment income is apportioned to Oregon using a 100 percent sales factor.

•A qualifying taxpayer in the forest products industry is re- quired to use the double-weighted sales factor formula.

•Utilities and telecommunications companies may make an election to use the double-weighted sales factor formula.

•Form TSE-AP, Transit Self-Employment Tax Apportionment Worksheet has changed.

What is the TriMet self-employment tax?

The TriMet tax helps fund mass transportation in the TriMet District. This tax is applied to self-employment earnings of individuals doing business or providing services in the dis- trict. This includes portions of Multnomah, Clackamas, and Washington counties. The Oregon Department of Revenue collects the tax for TriMet.

A list of ZIP codes included in the district boundary is on page 4. For more information, call TriMet at 503-962-6466, or access their website at www.trimet.org.

The tax rate is 0.006418 (0.6418 of 1 percent).

Who must file and pay this tax?

Individuals

Anyone who has self-employment earnings from business or service activities carried on in the TriMet District must pay this tax.

People who must pay the self-employment tax include:

•Self-employed individuals, sole proprietors, independent contractors, and persons who have net self-employment earnings greater than $400 from doing business or provid- ing services within the TriMet District.

•Real estate salespeople. Federal laws generally treat real estate salespeople as self-employed. This includes those who provide services to real estate brokers under contract.

This means that commissions on sales are subject to the TriMet self-employment tax.

Partnerships

Partnerships are not subject to the TriMet tax.

The individual self-employed members of the partnership are responsible for filing and paying the tax. But a partner- ship may choose to file one transit self-employment tax return and pay the tax for all of its individual partners. See “Partnership election” instructions.

Exemptions

•C and S corporation distributions are not subject to this tax. However, all employers who pay wages for services performed in the district must pay a transit payroll tax. For more information, call 503-945-8091.

•Ministers. Compensation received by a minister or mem- ber of a religious order when performing religious services in the exercise of that ministry or religious order is not subject to TriMet self-employment tax.

•Insurance agents. Insurance agents are exempt from the self-employment tax to the extent that business income is derived from an insurance-related activity. Non-insur- ance income is taxable [Oregon Revised Statutes (ORS) 731.840].

How to file

Complete Form TM, TriMet Self-Employment Tax Return. Staple your payment and the Form TSE-V payment voucher to the top of the return. Make your check payable to the Oregon Department of Revenue. Do not use red ink or gel pens. Please use only blue or black ink on your return and payment.

Mail to: TMSE

Oregon Department of Revenue

PO Box 14003

Salem OR 97309-2502

Important filing information

•Do not combine your TriMet self-employment tax pay- ment with any other tax payment made to the Oregon Department of Revenue.

•Do not attach your Form TM to your Oregon income tax return.

•Attach a copy of your federal Schedule SE to your Form TM.

•Attach Form TSE-AP to your Form TM if you are appor- tioning your self-employed transit earnings.

•Mail your transit return to the Oregon Department of Revenue. Transit returns cannot be filed electronically.

File one TriMet Self-Employment Tax Return for all of your self-employment earnings.

To avoid a penalty, file your return and pay your tax by the due date.

Frequently asked questions

I have more than one business. How should I file my TriMet return?

File one return. If you have separate business activities, at- tach a schedule for each separate business to your return. Compute the TriMet self-employment income separately for each business. See instructions for line 1.

Can I file a joint return?

No. Each taxpayer having self-employment earnings must file a separate Form TM. That’s true even if you and your spouse filed a joint federal income tax return. The only ex- ception is a partnership filing for all partners. Both spouses could be members of the same partnership.

I’m getting a refund on my Oregon individual income tax return. Can I have that refund applied to this tax?

No. We cannot apply any income tax refund to pay your TriMet self-employment tax.

Can I file my transit self-employment tax return electronically?

No. File your transit return by mail. Make a copy for your records, and mail your return to the Oregon Department of Revenue address printed at the bottom of the tax return.

Can I file an amended transit self-employment tax return?

Yes. File an amended transit return any time you need to correct your return as originally filed. Generally, you are al- lowed three years from the due date of the return or the date the return was filed, whichever is later, to file an amended return to claim a refund. Check the “This is an amended return” box on your transit return.

What if business is done both inside and outside of the district?

Use an apportionment formula by completing Form TSE-AP. Self-employment income is apportioned using a 100 percent sales factor. You are required to use the double-weighted sales factor formula if you are a qualifying taxpayer in the forest products industry. Utilities and telecommunication companies may make an election to use the double-weighted sales factor formula.

What if I’m audited by the IRS?

If changes are made that affect your self-employment earn- ings, file an amended return to report and pay any additional tax due. If the change reduces your transit tax, you have two years from the date of the audit report to claim a refund.

Why am I being charged penalty and interest on my unpaid taxes when I have a valid extension?

You are responsible for a 5 percent penalty and interest if you do not pay your tax by the original due date. This is true even if you have an extension of time to file. Attach a copy of your extension to your TriMet return and check the “An extension has been filed” box to avoid additional penalties.

For more information, visit our website at www.oregon. gov/DOR.

When to file

Your TriMet return is due the same day as your federal and Oregon individual income tax returns. For most taxpayers, this is April 16, 2007. Fiscal year returns are due the 15th day of the fourth month after the end of the fiscal year. When the 15th falls on a Saturday, Sunday, or legal holiday, the due date will be the next business day.

Extensions

If you get an extension to file your federal or Oregon in- dividual income tax return, it will also extend your TriMet Self-Employment Tax Return. Check the “An extension has been filed” box on your Form TM, and attach a copy of the extension to your return when you file.

However, more time to file does not mean more time to pay. If you have an extension, you must make your payment by the original due date of the return to avoid a penalty and interest charge. Complete Form TSE-V and send it with your payment of tax. Form TSE-V is available on our website at www.oregon.gov/DOR, or see “Taxpayer assistance.” Be sure to use the same name and Social Security number (SSN) or federal employer identification number (FEIN) that you will use on your return when you file.

Be sure to file your TriMet Self-Employment Tax Return within the extension period.

Partnership election

A partnership may elect to file and pay the transit self-em- ployment tax for the individual partners. The partnership must use net earnings from self-employment as reported on federal Form 1065 to figure the tax. Do not make Or- egon modifications to the partnership’s earnings. If some partners have different tax years than others, net earnings from self-employment is determined using amounts from different tax years.

The partnership’s return and payment shall be based upon the net earnings from self-employment of the individual partners from the partnership for their taxable years ending with or within the calendar year.

Due date: April 16, 2007. The partnership must file a return and pay the tax due on or before the 15th day of the fourth month following the end of the calendar year.

Fiscal year taxpayers: When a partnership tax year ends within a calendar year, the partnership files on a calendar year basis with the return due April 16, 2007.

Example: If a partnership has a tax year ending August 31, 2006, and its partners use a calendar year, the partnership must pay on or before April 16, 2007, the amount due from the partner’s net earnings from the partnership for its taxable year ending August 31, 2006.

Partnerships must attach a schedule listing the following information for each partner:

•Name.

•SSN.

•Share of partnership income.

•Individual exclusion.

Partners: If your partnership is filing on behalf of all part- ners, you do not need to file a separate Form TM unless you have net self-employment earnings from sources other than the partnership. Report only these additional net self- employment earnings on your individual Form TM.

Amended returns

You must file an amended return to claim a refund of tax paid. To file an amended return, use the appropriate form for the year of the original return and check the box indicating “This is an amended return.” Attach an explanation of the changes made.

Form TM instructions

Name and address section

Individuals: Fill in your name, address, telephone number, and SSN.

The request for your SSN(s) is authorized by Section 405, Title 42, United States Code. You must give us this infor- mation. It will be used to establish your identity.

Partnerships: Fill in the partnership name, address, tele- phone number, FEIN, and Oregon business identification number (BIN).

You must provide, on a schedule attached to Form TM, the name, SSN, share of partnership income, and individual exclusion for each partner. Your return cannot be processed without this information.

Check the box if any apply:

•An extension has been filed.

•This is an amended return.

•Utility, telecommunications, or forest industry.

Line instructions—Form TM

Instructions are for lines not fully explained on the return.

Line 1. Self-employment earnings. Fill in the amount from federal Schedule SE, Section A, line 3; or Section B, line 3 unless you meet one of the exceptions below:

More than one business included on federal Schedule SE? Only include those businesses from line 3 of your federal Schedule SE that have net earnings. Do not use a business with a net loss to offset a business with net earnings.

Example: Business A has net earnings of $20,000 and Busi- ness B has a net loss of $10,000. The amount on line 3 of your federal schedule SE is $10,000. Fill in on line 1 of Form TM the amount of $20,000. File one return. Attach a schedule to the return and include each separate business and their net earnings or losses. There are no carry-forward of losses to another year.

Did you receive Partnership income? Did the partnership file Form TM and pay the tax for the partners? If so, reduce the amount from your federal Schedule SE, Section A, line 3; or Section B, line 3 by the amount of your income from that partnership.

Important. Do not make Oregon changes or modifications to federal income on Form TM. Your earnings that are subject to TriMet self-employment tax will generally be the same as the earnings you report on your federal Schedule SE, Section A, line 3; or Section B, line 3.

Line 2. Apportionment:

•Percentage cannot be less than 0 percent or more than 100 percent.

•Enter 100 percent if all of your business activity is within the transit district. Do not fill out Form TSE-AP.

•Fill out and attach a completed Form TSE-AP if your busi- ness activity is carried on both in and out of the district.

Line 4. Exclusion. Each taxpayer’s exclusion is the lesser of the taxpayer’s self-employment earnings (line 3), or $400.

Individuals: Enter $400 or the amount on line 3, whichever is less. Was the exclusion partially or completely used on another 2006 Form TM filed by your partnership? If so, fill in only the unused amount of the $400 exclusion.

Partnerships. Enter $400 for only those partners whose share of positive earnings are included in the amount on line 3. If any partner’s exclusion was partially or completely used on another 2006 Form TM, include on line 4 only that partner’s unused amount of the $400 exclusion. Each partner is re- sponsible for ensuring that the total of all exclusions does not exceed $400.

Do not include any partner with a loss.

Line 7. Prepayments. Fill in the amount of any advance pay- ments you made before filing this return. Include payments made with an extension of time to file or with a payment voucher, Form TSE-V.

Line 8. Tax to pay. Include your check or money order pay- able to the Oregon Department of Revenue. Write your daytime telephone number and “2006 Oregon Form TM” on your check. Staple your payment and the Form TSE-V payment voucher to the top of your return. An expected refund from your state income tax cannot be used to pay your transit tax.

Line 9. Penalty and interest. For filing or paying late.

charged an additional failure to file penalty, which will equal 100 percent of any tax due.

Sign your return. Please sign and date your return before mailing.

TriMet ZIP codes

TriMet serves the Portland Metropolitan area, which includes parts of Multnomah, Washington, and Clackamas counties. For information on TriMet boundaries, call 503-962-6466 or access the TriMet website at www.trimet.org.

ZIP codes completely in TriMet Transit District

Due date. Form TM is due the same day as your federal and Oregon income tax returns. For a calendar year return, this is April 16, 2007.

Interest. Are you paying your tax after the due date? If you are, include interest on any unpaid tax.

If you do not pay the tax by the due date, interest will be charged on the unpaid tax. Interest periods generally begin on the 16th day of the month the return is due. Returns are due on the 15th unless the 15th falls on a Saturday, Sunday,

97005

97006

97008

97024

97027

97030

97034

97035

97036

97068

97201

97202

97203

97204

97205

97206

97209

97210

97211

97212

97213

97214

97215

97216

97217

97218

97219

97220

97221

97222

97223

97225

97227

97229

97230

97232

97233

97236

97239

97258

97266

97267

97268

or legal holiday. Interest is figured daily for periods of less than a month. A month, for example, is May 16 to June 15. Interest rates may change once a calendar year.

To calculate interest due:

•Tax × Annual interest rate × Number of full years.

•Tax × Monthly interest rate × Number of months.

•Tax × Daily interest rate × Number of days.

Interest rates and effective dates:

For periods beginning	Annual	Monthly	Daily
January 1, 2006	7%	0.5833%	0.0192%
January 1, 2007	9%	0.75%	0.0247%

Interest accrues on any unpaid tax during an extension of time to file. Learn more about Computing Interest on Tax You Owe at www.oregon.gov/DOR.

Additional interest on deficiencies and delinquencies. Interest will increase by one-third of 1 percent per month on unpaid tax. If the tax is not paid within 60 days of our bill, the interest rate increases by 4 percent per year.

Penalty. Include a penalty payment if you:

•Mail your payment of tax due after the due date (even if you have an extension), or

•File your return showing tax due after the due date, in- cluding any extension.

Penalty is 5 percent of the unpaid balance of your tax.

If you file your return more than three months after the original or extended due date, add an additional penalty of 20 percent of the unpaid tax.

If you do not file required returns for three consecutive years by the due date of the third year’s return, you will be

ZIP codes partially in TriMet Transit District

97007	97019	97055	97080	97116	97224
97009	97022	97060	97086	97123	97231
97013	97023	97062	97089	97124
97015	97045	97070	97113	97140

Taxpayer assistance

Oregon Department of Revenue

General tax information	www.oregon.gov/DOR
Salem	503-378-4988
Toll-free from Oregon prefix	1-800-356-4222
E-mail	tse.help.dor@state.or.us

This e-mail address is not secure and confidentiality cannot be ensured. General tax and policy questions only.

Asistencia en español:
Salem	503-945-8618
Gratis de prefijo de Oregon	1-800-356-4222
TTY (hearing or speech impaired; machine only):
Salem	503-945-8617
Toll-free from Oregon prefix	1-800-886-7204

Americans with Disabilities Act (ADA): Call one of the help numbers for information in alternative formats.

TriMet Transit District boundary information

Telephone	............................................................ 503-962-6466
Internet	www.trimet.org

1.	Total self-employment earnings from federal Schedule SE	• 1
2.	Apportionment percentage	2
3.	Net self-employment earnings. Multiply line 1 by line 2	• 3
4.	Less: Exclusion	• 4
5.	Net earnings subject to transit district tax. Line 3 minus line 4	• 5
6.	Net tax. Multiply the amount on line 5 by 0.006418	• 6
7.	Prepayments	• 7
8.	TAX TO PAY. Is line 6 more than line 7? If so, line 6 minus line 7	TAX TO PAY • 8
9.	Penalty and interest for filing or paying late	9
10.	Total amount due. Line 8 plus line 9	10
11.	REFUND. Is line 7 more than line 6? If so, line 7 minus line 6	REFUND •11

%

Make check or money order payable to:

Oregon Department of Revenue

150-555-001 (Rev. 12-06)

Mail your return to: TMSE

Oregon Department of Revenue

PO Box 14003

Salem OR 97309-2502