U.S. Rep. Peter DeFazio, D-Springfield, is calling on state lawmakers to pass legislation to eliminate the state tax liability owed by Oregonians on federal stimulus payments.
Congress approved two rounds of direct payments to Americans last year as a way to help ease the economic hardships related to the coronavirus. Those payments aren’t taxable on the federal level.
But many Oregonians will see their state income tax bill increase by hundreds of dollars this year as a result of the stimulus. All told, the Legislative Revenue Office estimates the payments will yield more than $100 million in state tax revenue.
DeFazio said he’s written to Oregon Gov. Kate Brown and legislative leaders to ask them to take Oregon taxpayers off the hook for the extra tax burden. “We did not in Congress intend for these benefits to be taxed, directly or indirectly," he told KLCC Thursday.
DeFazio said he’s hopeful a new federal stimulus package will include money for state governments that would offset any tax revenue lost by the proposal.
One Oregon lawmaker said this week he's drafting legislation to eliminate state income tax liabilities for the two recent stimulus payments, as well as any future ones. “The sole purpose of federal stimulus checks was to give people help when they needed it the most,” said Sen. Dick Anderson, R-Lincoln City. “There is no justification for the state to be taking some off the top.”
A spokesperson for House Speaker Tina Kotek, D-Portland, said Kotek "supports the (Oregon) House Revenue Chair evaluating this issue."
Senate President Peter Courtney, D-Salem, had no comment according to his communications director. And the office of Gov. Kate Brown did not respond to a request for comment.