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Keywords

plaintiffdefendantstatutemotionsummary judgmentmotion for summary judgment
plaintiffdefendantstatuteappealmotionsummary judgmenttrustmotion for summary judgment

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Fisher v. Department of Revenue, 2024 WL 3572358

Facts

The Plaintiff worked as a special education teacher in Massachusetts for approximately 30 years and retired in 2008. She contributed to the Massachusetts Teachers Retirement System, which she described as a 401A annuity that becomes a state pension upon retirement. After moving to Oregon in November 2021, she filed an Oregon tax return for 2022, claiming a subtraction for distributions from her retirement plan. The Oregon Department of Revenue initially adjusted her taxable income to include these distributions, later stating that the plan did not qualify under Oregon law.

Plaintiff was a resident of Massachusetts until moving to Oregon in November 2021. She filed an Oregon resident return in 2022 and subtracted distributions from her retirement plan using an OR-ASC Schedule. Defendant initially adjusted Plaintiff's taxable income for the 2022 tax year to include retirement plan distributions because her 'contributions were not included in [her] federal adjusted gross income.'

Issue

Whether for the 2022 tax year Plaintiff may claim a subtraction from taxable income for distributions from her IRC 401(a) plan under ORS 316.159.

The issue presented is whether for the 2022 tax year Plaintiff may claim a subtraction from taxable income for distributions from her IRC 401(a) plan under ORS 316.159.

Rule

ORS 316.159 provides for certain subtractions from taxable income for retirement plan distributions, but only for specific types of plans listed in subsection 2 of the statute.

Oregon defines taxable income by reference to federal taxable income, subject to certain modifications, additions, and subtractions. ORS 316.048. One such subtraction provided to a resident is for certain retirement plan or trust distributions. ORS 316.159.

Analysis

The court analyzed whether the Plaintiff's retirement plan qualified for subtraction under ORS 316.159. It noted that IRC section 401(a) plans are not included in the list of accepted plans under the statute. The court referenced a previous case, Glick, which established that the plain language of the statute does not allow for a subtraction for plans not explicitly listed. The court concluded that the absence of 401(a) plans from the statute meant that the Plaintiff's distributions could not be subtracted.

Notwithstanding the omission of section 401(a) retirement plans from ORS 316.159(2), the question becomes whether such plans could nevertheless qualify. The court addressed a similar question in Glick. 13 OTR 288. In Glick, the taxpayers were previously public-school teachers in Pennsylvania who had 'contributed to the purchase of tax-sheltered annuities under IRC [section 403(b)].' The court held that the taxpayer was not entitled to a subtraction because the plain language of the statute did not allow for a subtraction and the statute was unambiguous.

Conclusion

The court concluded that Plaintiff's retirement plan does not qualify under ORS 316.159(2) and therefore denied her motion for summary judgment while granting the Defendant's motion.

Accordingly, the court denies Plaintiff's Motion for Summary Judgment and grants Defendant's Motion for Summary Judgment. Now, therefore, IT IS DECIDED that Plaintiff's appeal for the 2022 tax year is denied.

Who won?

Defendant prevailed in the case because the court found that the Plaintiff's retirement plan did not meet the criteria for subtraction under Oregon law.

Defendant argues that Plaintiff does not qualify for a subtraction under ORS 316.159 because a 401(a) plan is not one of the 'accepted plans' under subsection 2 of the statute.

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