Some small businesses in Oregon may still see a tax break from the state legislature despite Gov. Kate Brown’s signature on a bill that disconnected the state’s income tax code from the new 20 percent deduction for qualifying pass-through entities last month.
Senate Bill 1528 took away state-level tax relief for every pass-through entity in the state which directly affected Oregon’s small businesses.
According to the Bend Bulletin, Brown announced her intention to bring lawmakers back to Salem for a special legislative session in order to add sole proprietors to the list of business-entity types that can access Oregon’s current pass-through entity tax policy. The special session will begin on May 21, when legislators were already scheduled to be at the Capitol for “Legislative Days.”
“When Governor Brown announced her intention to sign the bill, she surprised many by also
calling for a special session. It would be Oregon’s first since 2013, when, coincidentally, the subject of small-business taxes was also front-and-center,” said NFIB Oregon State Director Anthony K. Smith. “The 2013 special session included a new tax policy for pass-through businesses—the Small Business Tax Cut. It created a structure of lower rates for individual business owners meeting certain requirements.”
According to Smith, the governor’s proposal would add an estimated 9,000 sole proprietorships to the Oregon Small Business Tax Cut policy, out of more than 200,000 statewide. All of these businesses, in addition to every S corp, partnership, and LLC, were denied a tax break when SB 1528 was signed.
Senate Republican Leader Jackie Winters, issued a statement indicating the Senate Republicans’ readiness to work with the governor so long as the focus of the special session remains narrowly focused on this one subject, according to the Bend Bulletin.
“While the governor’s proposed fix doesn’t help nearly enough Oregon small businesses, we are committed to working to expand these tax cuts so that all small businesses in Oregon receive tax equity and fairness, just as they would have had the governor vetoed Senate Bill 1528,” she said.
Smith echoed Sen. Winters’ comments, “Why not improve the Small Business Tax Cut policy in a way that makes it comparable to the new 20 percent deduction that was blocked by SB 1528 and simply allow taxpayers to choose one or the other?”