Lights, camera, auction.
It’s nearly time for the Oregon Production Investment Fund (OPIF) tax credit auction, a great way for Oregon taxpayers to save on state taxes.
And that’s not all, folks.
The auction also helps boost Oregon’s economy, a side benefit worth considering.
What is OPIF?
OPIF is a state incentive program that supports continued growth of Oregon’s creative film, television, and interactive industry.
Funded by the sale of discounted Oregon income tax credits at auction, OPIF helps create jobs, economic activity, and promotion for Oregon.
Case in point: In 2018, Oregon productions accounted for $117 million in spending on labor and $60 million on goods and services.
The Auction at a Glance
OPIF’s tax credit auction is open to all Oregon individual and business taxpayers.
This year, $20 million in state tax credits—as determined by the Oregon legislature—will be available for purchase in $500 increments at a minimum bid of 90% of face value.
Bidding begins at 9 am on Monday, September 27 and ends at 5 pm on Friday, October 1.
Bidders can bid on as many increments as they like. By bidding on (and winning) a $50,000 tax credit (100 x $500 increments) for $45,000, a taxpayer could save $5,000.
Credits can be used up to three years from the year in which they are purchased. Unused credit can be rolled over into subsequent years during that three-year period.
How the Auction Works
The bidding process is straightforward.
Bidders submit a bid on the auction website once the auction opens. They must complete Form OR-TCA for each bid submitted.
Bidders then mail or hand-deliver full payment in the form of a certified check, cashier’s check, or money order to the Oregon Department of Revenue by a specified date.
Auction results are available in 2 to 4 weeks. Winning bidders receive a tax credit certificate, which can be sent to the winner’s tax preparer.
If a bidder is unsuccessful, payment is returned.
Those with a significant Oregon tax liability should consult with Vista and their CPA prior to the auction date to discuss strategy. Bidding in increments and staggering bids may be beneficial.
To increase chances of winning, bidders should bid online as soon as the auction opens. Winning bids are determined based on bid amount (highest to lowest) and then timing (when the bid is submitted), with tied bids going to the earliest bidder.
Not a Meet-Cute?
While the OPIF auction gives taxpayers the opportunity to save up to 10% on state taxes, it’s not right for everyone.
The program is generally best for taxpayers who have a total Oregon tax liability of $10,000 or more. Those who owe less might not find the auction process worth the effort, especially knowing not every bid is successful.
There’s also a potential opportunity cost, as bidders must tie up funds in October not technically due until the following April.
A Smile Next April
Taxpayers interested in a unique way to reduce their Oregon taxes might find the OPIF auction just the ticket to save a bundle of cash.
For best results, you may want to strategize with your Vista team while keeping a close eye on auction dates and deadlines.
It’s your best chance of achieving a picture perfect finish: That smile on your face come April when you realize you’ve already paid your state taxes.