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Governor calls for OR tax bill

SALEM — Gov. Kate Brown on Wednesday issued a proclamation calling for a special legislative session May 21 and released a draft of the bill she wants lawmakers to consider.

The proposed law would expand to sole proprietors state tax breaks available to owners of certain businesses whose business income "passes through" to their personal income tax returns instead of paying corporate rates.

In 2013 the Legislature extended lower rates for owners of other types of pass-through businesses, such as S-corporations and partnerships, provided they meet certain employment and other requirements. Those state tax breaks weren't extended to sole proprietors.

If passed, the rates would apply to the 2018 tax year.

"I'm calling a special session to stop this unfairness and create a level playing field for Oregon's smallest businesses," Brown said in a prepared statement Wednesday. "It's imperative that the Legislature take action now so that many more Oregon small businesses can take advantage of this economic incentive."

The special session is expected to last one day. It is scheduled to precede several days of previously scheduled legislative committee meetings at the state capitol.

Some legislators have expressed concerns that their colleagues will try to do more than expand the tax break to sole proprietors during the session.

Legislators are not limited either in scope or length of the session by Brown's proclamation. Once in session, they can consider any legislation brought up for a vote and can remain in Salem until they vote to adjourn.

A spokesman for the House Republicans said in a statement that "Democrats do not appear to have a clear consensus on the scope of the session, nor the exact details of the tax cut bill," and that the special session "charade" wouldn't be necessary if the governor had vetoed the bill disconnecting the state from the new federal deduction.

State Sen. Herman Baertschiger, R-Grants Pass, a member of the Senate Finance and Revenue Committee, indicated earlier this week he would prefer making any changes to the state's tax policy in the 2019 legislative session, scheduled to begin in January.

House Speaker Tina Kotek, D-Portland, did not suggest a wider agenda in her response to the proclamation.

"The House stands ready to work collaboratively to consider reasonable improvements to our existing small business tax break," she said in a statement. "President Courtney and I plan to appoint a special joint committee that will meet prior to the special session to begin to hear proposed legislation."


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