Brant is a Shareholder and the Chair of the Tax & Benefits practice group at Foster Garvey, a law firm based out of the Pacific Northwest, with offices in Seattle, Washington Portland, Oregon Washington, D.C. So, it appears a three-fifths vote in favor of a corporate receipts tax in each the house and the senate is not currently attainable. Article IV, Section 25 of the Oregon Constitution requires a three-fifths majority of all members elected to each house of the legislative assembly to pass bills for raising revenue and that the presiding officer of each respective house sign the bill or resolution. Late yesterday, Oregon Democrats announced that they are abandoning any efforts to enact a corporate gross receipts tax this year as they have been unable to garner adequate legislative support to pass such a measure. Maybe that is not the case – at least for now. In fact, the passage of it certainly appeared to be gaining steam in the legislature. On May 26, 2017, we discussed recent events that would lead a reasonable person to believe that the dream of a corporate gross receipts tax was definitely alive and well in Oregon. Additionally, taxpayers may still have the ability to initiate or continue Tax Court proceedings if they missed the time period for doing so originally, including appealing adverse determinations to the magistrate division, regular division, or even the Oregon Supreme Court.įor more than a year, I have been discussing the potential that Oregon lawmakers will pass a corporate gross receipts tax. Taxpayers with cases pending in either the magistrate or regular division of the Tax Court may be able to utilize these extended time periods.
In this post, we address the impact that HB 4212 and the Order may have on Tax Court cases. 20-027 (the “Order”) to facilitate the implementation of HB 4212. On July 21, 2020, the Chief Justice of the Oregon Supreme Court (the “Chief Justice”) issued Order No. HB 4212 extends the time periods that apply to court proceedings, including those in the Oregon Tax Court (“Tax Court”), to provide relief to litigants who may be impacted by the COVID-19 pandemic. Governor Kate Brown (the “Governor”) signed HB 4212 into law on June 30, 2020. However, it gets even better-SB 727 includes a refundable credit feature that may result in further tax savings for some owners of pass-through entities.ĭuring the first special session of 2020, the Oregon legislature passed House Bill 4212 (“HB 4212”). For pass-through entities that make the election, their owners will potentially be able to deduct more than $10,000 of Oregon state and local taxes on the federal income tax return. In relevant part, SB 727 allows pass-through entities to make an annual election to pay Oregon state and local taxes at the entity level. Interestingly, SB 727 sunsets at the end of 2023. In general, it applies to tax years beginning on or after January 1, 2022. On June 19, 2021, Oregon Governor Kate Brown signed SB 727 into law, effective September 25, 2021. Nine days later, the House passed the legislation without changes. On June 17, 2021, after some amendments, SB 727 was passed by the Senate and referred to the House. SB 727 is Oregon’s response to the IRS announcement (see discussion below). On February 4, 2021, Senate Bill 727 (“SB 727”) was introduced in the Oregon Legislature. Last fall, the IRS announced, with respect to pass-through entities (LLCs or other entities taxed as partnerships or S corporations), that, if state law allows or requires the entity itself to pay state and local taxes (which normally pass through and are paid by the ultimate owners of the entity), the entity will not be subject to the $10,000 state and local taxes deductibility cap (the “SALT Cap”).
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