LIC-6.05 - Short Periods Count as Tax Year

Administrative Rules Adopted by Bureaus Pursuant to Rule Making Authority (ARB)
Policy category
Policy number
Administrative Rule Adopted by Revenue Division Pursuant to Rule-Making Authority

Any short period return required to be filed under federal and state tax laws requires a short period return for business license and business income tax purposes. This short year shall count as one tax year.

When counting the five (5) years in the carryforward period for a net operating loss, a short period will count as one full year, in accordance with Treasury Regulation Section 1.172-4(a)(2).

When calculating the compensation allowance deduction during a short period, the maximum deduction allowance is allowed to be deducted (to the extent otherwise allowed for the tax year). No proration is required since the short period is considered one full tax year.

For a short period, the tax year is considered the year in which the period begins, e.g., if a short period begins 2/23/09, the short period will be considered a 2009 tax year. However, if the short period was the beginning of a 52-53 week year, the period shall be construed as starting on the 1st day of the relevant month, e.g., if a 52-53 week year began on 12/29/08 and closed as a short period on 7/29/09, the short period shall be construed as a 2009 tax year.

Note: For tax years beginning on or after 1/1/99, the compensation allowance deduction maximum is adjusted for inflation. To determine the correct maximum deduction, refer to the instructions on the Combined Tax Return or the Division’s website at for the year in question.

Portland City Code Section 7.02.600 A, B, C, D, I.
Multnomah County Code Section 12.600 A, B, C, D, I.

Originally adopted as Bureau of Licenses Administrative Rule 600.93-8 November 23, 1993 and amended as 600.93-8A December 26, 2000. 
Submitted for inclusion in PPD September 17, 2002.

Amended by Director of Revenue Bureau August 10, 2009.

Amended by Director of Revenue Division October 1, 2015.

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