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Bill

HB 2113

Relating to connection to federal tax allowing business deductions; prescribing an effective date.

2025 Regular Session Introduced by Werner Reschke

Oregon HB 2113 would allow businesses to deduct federal income tax payments from state taxable income, reducing state tax liability for corporations.

In committee upon adjournment.
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WeVote Research Nonpartisan
Bill Summary · HB 2113

Legislative bill overview

HB 2113 proposes to allow Oregon businesses to deduct federal income tax payments when calculating state taxable income. Currently, Oregon does not permit this deduction, meaning businesses pay federal taxes and then pay Oregon state taxes on income that includes those federal tax payments, creating a form of "tax on tax."

Why is this important

This would reduce the effective state tax burden on Oregon businesses by allowing them to exclude federal taxes from their state tax base. The fiscal impact depends on how many businesses would benefit and the total revenue reduction to the state, which could affect funding for state services if not offset elsewhere.

Potential points of contention

  • Revenue impact: Allowing federal tax deductions will reduce state tax collections; opponents may argue this diverts funds from education, infrastructure, and services without a revenue replacement plan
  • Fairness concerns: Critics may contend this primarily benefits higher-income businesses while individual taxpayers cannot deduct federal income taxes from state taxes, creating unequal treatment
  • Competitiveness claims: Supporters argue the deduction is necessary to keep Oregon businesses competitive with neighboring states that allow similar deductions, while skeptics may dispute whether this actually influences business location decisions

Compiled from official sources — confirm details with the bill’s official record.

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