OR Taxpayer Association Tax/Capitol Update 4/3

By Jim Welsh,
Taxpayer Association of Oregon Tax Update
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Items reviewed:
1. Tax Credit Changes and Eliminations
2. Tax Increases Proposed for 1031 Like-Kind Exchanges
3. Repeal of Tax Credit for Farmworker Housing Proposed
4. Ag. and Natural Resources Inheritance Tax Corrections

Tax Credit Changes and Eliminations

The House Revenue Committee heard HB 2066 which changes percentage of federal earned income credit allowable as credit against Oregon personal income tax and applies to tax years beginning on or after January 1, 2010. The Committee also heard HB 2067 which eliminates many tax credits by creating or adjusting sunset provision for certain personal income or corporate excise tax credits that are not required under federal law or Oregon Constitution.

Tax Increases Proposed for 1031 Like-Kind Exchanges

The House Revenue Committee scheduled a hearing for HB 2696 which requires addition to taxable income for Oregon tax purposes of amounts attributable to1031 like-kind exchanges and excluded from federal taxable income because of operation of certain federal law. Before the committee had a chance to hear proponents and opponents of this legislation the sponsor of the bill asked for it to not be heard. There was considerable action in the way of e-mails and phone calls generated by the opponents which will most likely send this legislation to the round file.

Repeal of Tax Credit for Farmworker Housing Proposed

The House Revenue Committee scheduled a hearing for HB 2769 which repeals the tax credit allowable to owner or operator of farmworker housing but the hearing was cancelled due to lack of support.

Ag. and Natural Resources Inheritance Tax Corrections

The Senate Finance and Revenue committee held a hearing on SB 347 which modifies provisions for estates claiming natural resource property or commercial fishing property tax credit on inheritance tax return. The Cattlemen believe SB 347 will correct the unintended consequences of HB 3618 (2008). It was not intended that the 13 or 14 families caught up in the legislative adjustment to HB 3201 (2007) would encounter the problems they did and the only recourse would be another legislative fix. These families have previously met all the requirements issued them from the Department of Revenue and have since then been required, due to retroactivity, to submit an amended tax return and pay an increased inheritance tax, and to burden the cost of filing again. It is not known at this time whether or not the Chair will allow this bill to pass out of committee.