LINCOLN CITY, Ore. — A Republican state lawmaker has drafted a bill that would reimburse Oregonians for the state taxes levied on federal stimulus payments.
Senator Dick Anderson of Lincoln City says that Senate Bill 842 will return the taxes that many Oregonians are paying on the Economic Impact Payments.
“There is no reason to be ‘nickel and diming’ Oregonians by taking part of their stimulus check.” Senator Anderson said. “The State of Oregon is doing better than expected with tax revenues.”
Oregon state economists released a revenue forecast last week that showed the state is relatively well positioned with tax revenue in spite of the economic squeeze brought on by the pandemic. The Office of Economic Analysis even said that tax revenue may be high enough to trigger Oregon's "kicker" rebate next year.
Stimulus payments have not been taxed by the federal government, but a quirk of Oregon's tax code means that some 870,000 Oregonians will be paying state taxes on those checks. The Oregonian/OregonLive reports that those taxes amount to roughly $112 million in tax revenue for the Oregon government.
Senator Anderson's office previously considered having people amend their tax filings, or get a credit on 2021 taxes. But SB 842 would result in a more direct solution — requiring the Oregon Department of Revenue to send checks for tax on stimulus checks back to affected Oregonians, similar to the way that the kicker rebate works.
“We realized that making working people jump through hoops to get their money wasn’t the right approach,” Senator Anderson continued. “To ensure that the most Oregonians get their money back, we opted to go for a system that proactively sends checks to those affected.”
Anderson's office said that SB 842 received its first reading on the Senate floor Wednesday, and will head to the Senate President's desk for committee referral.