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Bill to refund Oregon taxes on federal stimulus payments stalls in the legislature

An estimated 870,000 Oregonians owed more in state taxes because of the two Economic Impact Payments (EIP) issued in 2020, with more to come next year due to the third payment that came in 2021.

Posted: Jun 24, 2021 4:56 PM
Updated: Jun 24, 2021 5:09 PM

SALEM, Ore. — When the federal government began offering stimulus payments to Americans during the COVID-19 pandemic, they were not intended to be taxed at either the federal or state level. Due to a quirk of Oregon's particular tax code, however, many of them were.

An estimated 870,000 Oregonians owed more in state taxes because of the two Economic Impact Payments (EIP) issued in 2020, with more to come next year due to the third payment that came in 2021. According to Senate Republicans, those additional taxes amounted to roughly $300 million.

Earlier this year, lawmakers designed a bill that would refund these additional taxes back to Oregonians who were penalized by the stimulus payments, Senate Bill 842. Despite widespread support for the bill, however, it has remained stalled in the Senate committee on Finance and Revenue.

Republican Senator Dick Anderson, who introduced the bill in March, attempted to bring the bill up for debate on Thursday and was rebuffed by Democrats.

“I am a former mayor,” Senator Anderson said. “I am used to passing common-sense, bipartisan ideas that fix unintended consequences. It's extremely disappointing that partisanship got in the way of this bill. There is no defensible reason to be taking part of Oregonians’ stimulus checks, especially given Oregon’s current financial position.”

Senate Republicans cited a letter that U.S. Representative Peter DeFazio, a Democrat, penned in February, urging Governor Kate Brown and Democratic leaders in the legislature to return the taxes on stimulus checks.

When lawmakers heard comment on SB 842 in April, one of the only speakers to express significant concerns about the bill was Betsy Imholt, director of the Oregon Department of Revenue.

Imholt explained the major pressure her department was under due to ongoing COVID-19 impacts; an ongoing tax season with the deadline pushed back to mid-May, in addition to the sudden project of quickly refunding taxes levied on unemployment checks during the pandemic. Imholt said that Revenue staff were already working overtime to meet these crucial deadlines.

"The most practical path to implement Senate Bill 842 would be for this reduction — to build it into next tax season," Imholt said. "By making the correction next tax season, we can build the forms, instructions into our planning right now, and work with the e-filing vendors to automatically calculate the correction. We can do the correction both for 2020 and 2021 at the same time . . . this would be simple for taxpayers, and it would be most efficient on our end as well."

While the reasoning for Democrats' decision to oppose advancing the bill is unclear, Imholt's arguments may have prevailed, opening up the possibility that refunds for the 2020 payments will appear when taxpayers file in 2022.

“Democrats blocking this legislation shows Oregonians exactly where their priorities are,” Senate Republican Leader Fred Girod said. “This money belongs in the pockets of Oregonians. It is only right to return it to them. I hope that Democrats will find it in their hearts to move this legislation during the next session.”

Oregon Coronavirus Cases

Data is updated nightly.

Cases: 218689

Reported Deaths: 2855
CountyCasesDeaths
Multnomah41723618
Washington27764258
Marion24459332
Clackamas19888241
Lane14804174
Jackson12522155
Deschutes1052887
Umatilla950594
Linn624882
Yamhill506281
Klamath494179
Douglas446188
Polk429357
Josephine413675
Malheur366467
Benton345322
Jefferson249342
Coos230439
Columbia208132
Union167124
Wasco154631
Lincoln153522
Crook139224
Hood River125934
Morrow122317
Clatsop116310
Baker109317
Curry77912
Tillamook7495
Grant5627
Lake4878
Harney45811
Wallowa2286
Gilliam871
Sherman862
Wheeler421
Unassigned00

California Coronavirus Cases

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Cases: 3944933

Reported Deaths: 64386
CountyCasesDeaths
Los Angeles129358324677
Riverside3079224659
San Bernardino3062735236
San Diego2950543798
Orange2817905143
Santa Clara1230832099
Sacramento1152001777
Kern1130711425
Fresno1044581746
Alameda958261282
Ventura835231043
San Joaquin769151460
Contra Costa75842832
Stanislaus657091091
Tulare50363854
Monterey44484528
San Mateo44477588
San Francisco40144561
Solano35703262
Santa Barbara35647467
Merced32961484
Sonoma32665330
Imperial29096745
Placer25146307
Kings23611250
San Luis Obispo21970265
Madera17024249
Santa Cruz16616207
Marin14825239
Yolo14801215
Butte13184205
Shasta12963242
El Dorado11063120
Napa1042082
Sutter10159126
Yuba698551
San Benito627463
Lassen588127
Tehama586466
Nevada535075
Humboldt504553
Mendocino468351
Tuolumne449573
Lake423865
Amador387048
Siskiyou256140
Glenn246427
Colusa235718
Calaveras230758
Del Norte16438
Inyo145338
Mono13255
Plumas7656
Modoc5737
Mariposa4987
Trinity4626
Sierra1290
Alpine890
Unassigned510
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