Court Opinion

ID: 6911388
Source: CourtListenerOpinion
Date Created: 2022-07-23 22:23:30.405478+00
Date Added: 2024-06-11T16:06:31.281781
License: Public Domain

O’CONNELL, J.,
dissenting.
I dissent. The majority construe ORS 314.410 read together Avith ORS 314.405 (under the 1959 amendment) to mean that the three-year statute of limita*442tions will bar the state from recovering a corporate excise tax deficiency even though the state did not know and could not have discovered that a deficiency existed so as to give the required notice of a deficiency within the three-year period. I think that this is an erroneous construction of the statute.
I am willing to begin with the assumption that within the meaning of the statute the term “deficiency” includes an amount owing under the corporate excise tax because the taxpayer has taken a personal property tax offset and thereafter has received a credit or refund for an overpayment of that tax.① But the statute does not begin to run unless “a deficiency exists.” There was no deficiency in the present ease until the ■taxpayer had received its refund for overpayment of the personal property tax.
Moreover, when a deficiency exists the -statute of limitations runs only “if the commission discovers from the audit of a return or otherwise” the existence of the deficiency. It was impossible for the commission to discover the deficiency in the present case until the personal property tax refund had been made to the taxpayer. Until that time there was only the possibility of a deficiency. The statute was not intended to run from the time the commission discovered only a possible deficiency based upon a possible refund. The statute itself makes this clear in providing that after discovering that a deficiency exists the commission “shall compute the tax” and then “give notice to the taxpayer of its proposal to assess the deficiency.” The *443commission would not be able to “compute the tax” unless it knew the amount of the property tax refund.
The majority apparently finds a legislative intent to enact a statute of repose barring the state from collecting any deficiency no matter how it arises and even though it cannot be discovered by the state until after the statute has run. There is nothing in the wording of the statute nor in its legislative history indicating that the legislature so intended. Quite to the contrary, the legislative history shows that the 1959 amendment was introduced by the Tax Commission as a “housekeeping” amendment.
Benecke and Holman, JJ., join in this dissent.

 Tax Regulation 314.405 provides in part: “Ii the previous determination resulted in a credit or refund to the taxpayer, the deficiency upon the second determination is the excess of the correct amount of the tax over the tax reported by the taxpayer decreased by the credit or refund.”