Today [Monday, Feb. 9], the Senate Committee on Finance and Revenue advanced legislation to the Senate floor that cuts taxes for more than 200,000 low-to-moderate income Oregon households, spurs job growth in Oregon businesses, and protects $291 million in needed funding for education, health care, and public safety.
Senate Bill 1507 achieves these benefits for working Oregonians by closing tax loopholes overwhelmingly used by the wealthy and big corporations.
“Democrats are laser-focused on putting more money in the pockets of everyday Oregonians,” Senator Anthony Broadman (D-Bend) said. “At a time when the cost of living is too high and rising, we need to take urgent action this legislative session to invest in affordability and support local businesses.”
Last summer, the Trump tax package blew a $900 million hole in Oregon’s budget with tax cuts largely going toward the wealthy and big corporations. Those tax cuts were automatically adopted by Oregon’s tax code.
This proposal makes targeted changes to re-align Oregon’s tax code to benefit working Oregonians.
It expands the Earned Income Tax Credit by the largest amount in Oregon history, which lowers taxes for more than 200,000 low-to-moderate income households. The credit is increased from 9% for individual filers and 12% for filers with a child under 3, to 14% and 17%, respectively.
The proposal also creates the new $25 million Jobs Tax Credit to lower taxes on Oregon businesses that create good-paying jobs in Oregon. The tax credit is available regardless of industry, but is only available if the business has net job increases in the state.
The proposal also reaffirms that neither tips nor overtime pay will be taxed.
To pay for these credits and to preserve $291 million for health care, education, and public safety, the proposal removes from Oregon’s tax code three provisions that would have unfairly benefited the wealthy and corporations while not supporting job growth in Oregon.
Removed are deductions on auto loan interest for new cars, deductions on profits from corporate equity sales, and bonus depreciation for machinery and equipment.
From the Oregon Center for Public Policy:
One of the most important votes the Oregon legislature will take during the current short legislative session is Senate Bill 1507.
In this short video, OCPP Deputy Director Daniel Hauser breaks down the components of SB 1507, and explain why this legislation protects working families.
Republican response:
Senate Democrats are sending a bill to the Senate floor that would strip
$311 million in tax relief from local businesses and working Oregonians in the rest of
the 2025-27 biennium, following the party-line passage of Senate Bill 1507 -7 out of the
Senate Committee on Finance and Revenue. Committee staff confirmed the bill is a
revenue-positive tax increase, despite Democrats’ attempts to frame it as “not revenue
generating.”
“Small businesses and working Oregonians could lose out on hundreds of millions of
dollars in needed tax relief in the next few years because Democrats are creating a
loophole to funnel it into the state’s already-bloated budget instead. That’s a tax increase,
plain and simple,” said Senate Republican Leader Bruce Starr (R-Dundee).
“Democrats can’t have it both ways. You can’t claim to be focused on affordability while
taking away tax relief from the very people who need it most. If the goal is truly to end the
doom loop and improve Oregon’s economy, this is the wrong approach.”
“We’re in competition with other states. Idaho is competing for our businesses, Arizona
has already plucked some of our best, and Texas and others would love to lure away our
remaining manufacturers,” said Senator Mike McLane (R-Powell Butte), vice-chair of
the Senate Committee on Finance and Revenue. “Senate Bill 1507 sends yet another
signal to businesses and investors that Oregon isn’t willing to cooperate and encourage
growth the way other states are. We have a governor who has said making Oregon more
business friendly is a top priority. We’ll see if her actions match her words if this bill
reaches her desk.”
“These aren’t loopholes for the rich—they’re lifelines for working Oregonians and small
businesses. Taking them away now is reckless, especially when other states are rolling
out a red carpet for our jobs,” added Senator Dick Anderson (R-Lincoln City), who also
sits on the committee.
Senate Bill 1507 removes Oregonians’ tax deductions on expensive machinery and
equipment purchases, car loan interest, and gains from small business stocks.
This story is based on submitted information and has not been verified by our news team.
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