Fedex Ground Package Sys. v. Dept. of Revenue, Tc 4923 (or.tax 4-7-2010) ( 2010 )

ORDER DENYING DEFENDANT'S MOTION TO REQUIRE PAYMENT OF PERSONAL WITHHOLDING TAX This matter is before the court on the motion of Defendant Department of Revenue (department) to require Plaintiff to pay the assessment before proceeding in this court. That question had been covered by the order of the court, dated November 30, 2009, staying any requirement to pay the amount pending further proceedings.

The position of the department is that the decision of this court inZamani v. Department of Revenue, 19 OTR 318 (2007) was wrongly decided. The court has reviewed the matter and its prior decision inZamani in light of the arguments made in this case.

The court sees no reason to depart from the reasoning or result found in the Zamani case. In addition to the analysis found there, the court notes that ORS 305.419(1) requires that pre-hearing payment of tax be made in cases where some action of the department involves a "deficiency of taxes."¹ Assuming the department is correct in its position on the merits of this case, what is involved, viewed from the standpoint of Plaintiff here, is not a deficiency of taxes, but rather a deficiency in making a payment designed to secure payment by a worker of the worker's potential tax liability. Viewed from the standpoint of that other person, at the time that any liability to withhold and pay over accrues, it is simply not possible to determine if there exists or ever will exist a "deficiency of taxes."

As recognized in Realty Group v. Dept. of Rev.,299 Or 377, 702 P2d 1075 (1985), the withholding requirement does not relate to determination of taxable income or eventual tax liability. Therefore, defaults in withholding do not involve deficiencies in taxes on or measured by net income.

The motion of the department is denied. Now, therefore,

IT IS ORDERED that Defendant's motion is denied; and

IT IS FURTHER ORDERED that no fees or costs are awarded to either party.

Dated this ___ day of April, 2010.

¹ All references to the Oregon Revised Statutes (ORS) are to the 2009 edition.