Preview:

IN THE OREGON TAX COURT
REGULAR DIVISION
Philip SHERMAN
and Vivian Sherman,
Plaintiffs,
v.
DEPARTMENT OF REVENUE,
Defendant.
(TC 4547, 4556)

Plaintiffs sought refunds of their 1997, 1998, 1999, and 2000 state income taxes, arguing that the taxation of New York State pension benefits is a violation of the Oregon and federal constitutions. Plaintiffs' arguments were based on recent judicial and legislative actions regarding the unconstitutionality of exempting Oregon state pension benefits while taxing federal pension benefits. Defendant maintained that the legislature designed the pension benefit system to provide benefits to employees of the State of Oregon without infringing on requirements of intergovernmental tax immunity. The court agreed and granted Defendant's motion for summary judgment.
Income taxation-Public employees
1. Vogl v. Dept. Of Rev., 327 Or 193, 960 P2d 373 (1998) found that the increased pension benefits paid to Oregon retirees is the monetary equivalent of tax rebates.
Income taxation-Public employees-Intergovernmental immunity
2. The strict rules relating to intergovernmental immunity do not extend to state taxation of retirement benefits paid by
another state.
Submitted on cross-motions for summary judgment.

Philip Sherman filed the motion for Plaintiffs (taxpayers).
James C. Wallace, Assistant Attorney General, Department of Justice, Salem, filed the motion for Defendant (the
department).

Decision for Defendant rendered August 6, 2002.
HENRY C. BREITHAUPT, Judge.
These consolidated cases are before the court on Plaintiffs' (taxpayers) Notice of Motion for Summary Judgment and Defendant Department of Revenue's (the department) Motion for Summary Judgment.
FACTS
The parties have stipulated that the facts of these cases are as stated in the decision of the Magistrate Division, which may be summarized as follows:
Since 1992, taxpayers have been retired from employment with New York State. Since 1997, taxpayers have been full

Download TC4547.pdf

Oregon Law