Oregon’s governor recently signed into law HB 4052, establishing a new tax credit for de novo banks chartered in the state effective June 5. The law defines a “de novo bank” as a depository institution under 12 U.S.C. 1813(c) that: (i) is chartered in Oregon; and (ii) was first issued a state charter or certificate of authority to conduct banking business, and that commenced business operations in Oregon during the current tax year or in either of the two immediately preceding tax years. The definition excludes any bank formed through mergers, conversions, or affiliations with taxpayers that filed returns under the chapter in any preceding tax year.

Under the law, eligible de novo banks may claim a credit against excise taxes of up to $1 million per year for three consecutive tax years, beginning with the tax year in which the bank commences business. Before claiming the credit, a taxpayer must demonstrate that it has obtained a bank charter and a certificate of authority to conduct banking business in the state. The credit may not exceed a taxpayer’s tax liability for a given year, but unused credits may be carried forward for up to three succeeding tax years. The law also incorporates the new de novo bank credit into the existing framework of business tax credits available to C corporations and S corporation shareholders. The provisions apply to Oregon-chartered banks that commence business in tax years beginning on or after January 1, 2027, and before January 1, 2033.