New Income Tax Credit Designed to Fund Oregon Public Universities

Earlier this month, Oregon’s University Venture Development Fund began operations, which will allow the state’s taxpayers to receive a 60 percent income tax credit on contributions that will be applied toward commercialization and entrepreneurial programs at Oregon’s eight public universities. Authorized by the state legislature, the fund will enable $14 million to be provided to the universities in aggregate, with each institution’s allocation formulated by its annual income from research grants and contracts.

The program allows individuals or corporate donors to make unrestricted gifts of cash or publicly traded stock to one or more of the selected universities. Upon university receipt of the contribution, the donor will receive a tax credit for Oregon income tax equal to 60 percent of the original donation. The credit that can be claimed by the donor in a year is 20 percent of the original contribution or $50,000 – whichever is less and does not exceed the donor’s tax liability. Any remaining income tax credits will rollover to subsequent years.

The full University Venture Development Fund program comes after the passage of Senate Bill 853 in 2005 and SB 582 in 2007. As specified in the legislation, each university may designate the funds for a variety of uses, including capital for entrepreneurial programs, proof-of-concept funding for turning R&D into commercially viable products, and opportunities for students to gain experience in applying research to commercial activities.

As currently constructed under this program, Oregon State University will be eligible to receive $5.35 million, Oregon Health and Science University $4 million, the University of Oregon $3.2 million, and Portland State University $880,000. The Oregon Institute of Technology, Eastern Oregon University, Southern Oregon University, and Western Oregon University may share $500,000. The program is designed such that the universities will repay the state for claimed tax credits from royalty incomes and licensing fees. Once repaid, the state will reissue additional tax credits.

Additional information about Oregon’s University Venture Development Fund is available at:
http://www.ous.edu/about/campcent/uvdf.php

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